B&Q owner builds up profit base

B&Q opened 18 new stores in the UK last year

The owner of the B&Q home improvement chain has reported increased profits in 2004 but warned of a slow start to 2005 because of cold weather in Europe.

Kingfisher said a strong performance from B&Q had helped lift annual pre-tax profits 17.5% to £670.9m ($1.3bn) as total sales rose 8.7% to £7.7m.

B&Q benefited from the expansion of several of its UK stores, while like-for-like sales rose 1.3%.

During the year, it opened its largest store to date in Manchester.

Weak start

Kingfisher made solid progress in the year Gerry Murphy, Kingfisher chief executive Check Kingfisher's share price

Having enjoyed a strong start to 2004, growth slowed towards the end of the year as the impact of higher UK interest rates began to be felt on consumer spending.

For the year as a whole, B&Q made a profit on retail activities of £400.5m, 7.7% higher than last year.

"Overall, Kingfisher made solid progress in the year," said chief executive Gerry Murphy.

However, he warned about prospects for B&Q and Castorama - its French retail chain - in the first quarter of 2005.

"The colder than average weather across Northern Europe has meant B&Q and Castorama have had a weak start to the new financial year."

Kingfisher's shares were up 5 pence at 295.5p at the close of trade on Thursday.