3rd Quarter Results

RNS Number:0708T
Kingfisher PLC
10 December 2003


EMBARGOED UNTIL 0700 HOURS
Wednesday 10 December 2003




                                  Third Quarter to 1 November 2003

                              Kingfisher reports third quarter retail profit ahead 21%

                                                                     2003                2002                  Change
                                                                       #m                  #m                       %

Continuing operations (1) (2)

Retail sales                                                      1,789.7             1,579.4                    13.3
Like for Like sales growth                                           3.6%                5.9%                     n/a
Retail profit                                                       179.1               147.6                    21.3
Capital expenditure                                                  68.3                59.8                    14.2

*           Reported sales up 13.3%, 9.2% in constant currencies, 3.6% LFL

*           Reported retail profit up 21.3%, 17.2% in constant currencies, 
            reflecting the impact of new ranges,
            general cost control and progress in all major markets

*           UK & Ireland sales up 8.2% (2.7% LFL), profit up 13%

*           Constant currency sales in France up 7.5% (4.0% LFL), profit up 18%

*           Constant currency International sales up 23% (7.8% LFL), profit 
            up 39%

*           Group net debt more than halved year on year from #1.8 billion to 
            #684 million

Kingfisher Chief Executive, Gerry Murphy said:

"This is a good performance in a more difficult period.  The growth in Group
retail profit demonstrates the benefit of our Strategic Supplier Management
programme, general cost control and the introduction of new ranges in stores."

(1)       Continuing home improvement business only, excludes Dubois Materiaux, 
          Reno Depot in Canada and Castorama in Belgium, which have been sold, 
          Nomi in Poland and Castorama in Brazil which are contracted for sale 
          and Castorama Germany, which has been closed.  Also excludes 
          Kingfisher's former Electricals businesses, including Promarkt, sold 
          in February 2003 and Kesa Electricals plc, demerged in July 2003.

(2)       Retail sectors only, excludes property, acquisition goodwill 
          amortisation, exceptional items and other operating costs.




Kingfisher plc, Europe's leading home improvement retailer, today announced
trading results for the third quarter to 1 November 2003 and an agreement to
sell its last remaining non-core business, in Brazil.  As previously announced,
Group reported retail sales were ahead 13.3%, up 9.2% in constant currencies. 
On a Like for Like (LFL) basis sales grew 3.6%.

Reported retail profit grew just over 21% to #179 million and by 17.2% after
adjusting for currency translation gains on restating euro denominated profits
into sterling.

Despite the adverse impact of the prolonged heatwave across Western Europe in
the early weeks of the quarter and the aftermath of the SARS outbreak in Asia,
retail profit grew in every country.

Kingfisher continued to make progress on its five key strategic initiatives:

*          Working with suppliers to deliver supply-side scale economies: 
           Strategic Supplier Management programmes have now been established 
           across the Group.

*          Driving B&Q: New ranges, such as bedroom furniture and services 
           performed well with three new stores opened in the period.  Eight 
           Supercentres were converted to mini-Warehouses making a total of 20 
           trading at the end of the quarter.

*          Revitalising Castorama in France: New ranges have been introduced 
           with more competitive pricing on key products.  Three new format 
           stores were launched during the quarter.

*          Roll out of Brico Depot: The format was launched in Spain, trading as 
           Brico Stock, and is performing well.

*          International growth: Eight new stores were opened and profits 
           improved as operations approach critical mass.

Outlook

With an uncertain outlook for consumer spending, combined with strong prior year
comparative sales growth figures, the fourth quarter is likely to be
challenging.  However, Group-wide initiatives such as the Strategic Supplier
Management programme, cost control and the introduction of new ranges in stores
should largely mitigate the profit impact of slower sales growth.  The Board
continues to expect satisfactory progress for the year as a whole.

A more detailed operating review appears on the following pages.


UK



                          Retail Sales #m              % Total       % LFL           Retail profit #m            %Total
                          Q3 2003       Q3 2002         Change      Change           Q3 2003      Q3 2002        Change
B&Q (1)                     953.1         885.5            7.6               1.9          90.9       79.7          14.1
Screwfix Direct              56.9          47.9           18.8              18.8           5.8        5.9         (1.7)

Total UK (1)              1,010.0         933.4            8.2               2.7          96.7       85.6          13.0


(1)    Includes e-commerce costs in both years - 2003: #0.1m, (2002: #2.0m)

As previously reported, B&Q's sales in the quarter were adversely affected by
the prolonged heatwave.  Sales of interior paint, tiles and flooring suffered as
customers avoided interior projects.  However, Showroom, with new bedroom,
bathroom and kitchen ranges, performed well.  Kitchens and associated
installation sales continued to benefit from the roll out of the "it" ranges
across the Supercentre estate.  As well as introducing new, competitively priced
aspirational ranges, B&Q continued with its Price Reverse campaign to reinforce
its Every Day Low Price leadership.

In the quarter, one new Warehouse store and two new mini-Warehouses were opened.
 A further eight Supercentres were converted into the mini-Warehouse format
following early successes of previous conversions.  Twenty mini-Warehouses were
trading at the end of the quarter.

Retail margin improved in the quarter, reflecting the continuing Strategic
Supplier Management programme, further reduction in shrinkage and an increased
contribution from new ranges.  Revenue costs associated with the Supercentre
conversion programme were offset by currency gains on US dollar denominated
purchases from Asia.

Active customers of Screwfix Direct reached a million for the first time during
the quarter and average sales order value continued to grow.  Internet sales
were up over 60% and now account for a quarter of total sales.  Enhanced product
ranges boosted sales in the Plumbing and Electrical categories.

A new 30,000 square metre semi-automated fulfilment centre at Trentham,
Staffordshire is nearing completion.  This facility will come on stream in 2004
and, together with a major systems upgrade, will support continuing future
growth. The associated development costs contributed to year on year reduction
in retail margin in the quarter.

France



Retail sales #m                    Q3 2003         Q3 2002          % Change                % Change         % LFL
                                                                  (Reported)              (Constant)        change
Castorama                            398.1           356.7              11.6                     1.0           0.7
Brico Depot                          219.1           162.8              34.6                    21.8          11.6
Total France (2) (3)                 617.2           519.5              18.8                     7.5           4.0


Retail profit #m                          Q3 2003           Q3 2002          % Change          % Change
                                                                           (Reported)        (Constant)
Castorama (1)                                40.5              33.7              20.2               8.8
Brico Depot                                  20.5              13.1              56.5              41.6
Total France (2) (3)                         61.0              46.8              30.3              18.0


(1)      Costs of the French corporate head office in Lille have been 
         re-allocated to other operating costs in both years - 2003 #2.1m 
         (2002 #3.2m).  Also restated to include e-commerce costs in both 
         years - 2003: #1.2m (2002: #1.4m).
(2)      Excludes Dubois Materiaux
(3)      2003 #1 = Euro 1.43, 2002 #1 = Euro 1.59

Sales in France were also impacted by the hot weather.  According to the Banque
de France the DIY market declined by 6.4% in August, although it returned to
growth in September and October.

Castorama's sales performance reflected this backdrop with most non-seasonal
categories badly affected in August. Across the quarter, sales were strongest
where ranges had been improved and prices reduced. Building performed well along
with lighting, showers and tiles.  Some outdoor products benefited from the hot
weather including garden furniture and watering equipment.  Air conditioning
also sold well.

Retail margin improved as a result of continued Strategic Supplier Management
gains and productivity initiatives. These more than offset investment in price
competitiveness and the sales mix shift away from higher margin interior
decorative ranges to lower margin building and seasonal ranges in the quarter.

Three relocated stores were opened in the period trialling new ranges,
merchandising techniques and store layout. These new stores have performed ahead
of expectations and are likely to form a blueprint for upgrading the whole
estate.

Brico Depot achieved strong sales growth well ahead of the market, despite also 
suffering from a weak August.

All main product categories performed well across the period, with building
ranges, kitchens and flooring the strongest.  No new stores were opened in
France in the quarter but the first Brico Stock opened in Logrono, Spain in
October and is trading well (reported in International).

Brico Depot's retail margin improved as rapid sales growth enabled scale and 
cost efficiencies.


International


Retail sales #m                      Q3 2003        Q3 2002              % Change            % Change             % LFL
                                                                       (Reported)          (Constant)            Change
Poland                                  81.6           66.8                  22.2                22.8              14.0
Italy                                   45.0           34.8                  29.3                17.0               4.2
China                                   35.5           24.9                  42.6                30.9             (3.1)
Taiwan (1)                                 -              -                     -                   -                 -
Other Int'l (2)                          0.4              -                     -                   -                 -
Total International                    162.5          126.5                  28.5                22.8               7.8


Retail profit #m                      Q3 2003        Q3 2002              % Change            % Change
                                                                        (Reported)          (Constant)
Poland                                   13.9           10.0                  39.0                40.3
Italy                                     3.9            3.4                  14.7                 3.8
China                                     0.8          (0.2)                   n/a                 n/a
Taiwan (1)                                1.5            1.4                   7.1                10.0
Other Int'l (2)                           1.3            0.6                   n/a                 n/a
Total International                      21.4           15.2                  40.8                38.7

(1)      Joint venture (sales not consolidated)
(2)      Includes Hornbach, Koctas, B&Q Korea, Brico Stock Spain

Castorama Poland benefited from favourable weather conditions in the key project
season and strong overall demand ahead of next year's VAT changes on EU
accession.  Sales in Building and flooring were particularly strong.  Margins
continued to improve as economies from increased buying scale and the newly
introduced Strategic Supply Management programme were achieved.  One new store
was opened in the period.

Castorama Italy suffered from extreme August weather, affecting decorative
products in particular, but sales recovered over the balance of the quarter. 
All categories saw growth, in particular Showroom and Garden.  The retail margin
declined reflecting the sales mix shift from higher margin decorative ranges.
Two new stores opened in the period.

B&Q China continued to be affected by the aftermath of the SARS epidemic with
sales momentum returning only gradually. Year on year sales growth comparison
also reflected aggressive promotional activity in the same period last year. 
B&Q China was profitable in the quarter even after the costs of opening three
new stores.  Installation and decorative contract sales continued to grow
rapidly. B&Q had 14 stores in China at the end of the period, including the
largest B& Q in the world which opened in Beijing in October.  In total, three
new stores were opened in the quarter.

B&Q Taiwan saw more favourable trading conditions following the lifting of the
SARS restrictions imposed in the previous quarter.  Sales performed well with
air conditioning particularly buoyant.  One new store opened in the period.

Profits in Other International were ahead mainly due to an improved performance
at Hornbach in which Kingfisher has a 21% interest.  The first Brico Depot
format store in Logrono, Spain opened in October under the Brico Stock name.

Since the end of the quarter Kingfisher has reached agreement to sell the three
store Castorama Brazil business to local home improvement retailer Casa e
Construcao (CeC).  The sale is expected to complete in January 2004.

CeC will pay approximately #4 million in cash for the retail assets, which is in
line with existing book value.  The proceeds will be used to reduce Group debt
and the sale will be earnings neutral.



Year to Date results for the nine months to 1 November 2003


                            Retail Sales #m         % Total         % LFL          Retail profit #m             % Total
                               2003         2002     change         Change          2003            2002         Change
B&Q (1)                     3,010.2      2,736.2           10.0            3.9        277.5        242.2           14.6
Screwfix Direct               164.0        137.5           19.3           19.3         15.8         12.5           26.4

Total UK (1)                3,174.2      2,873.7           10.5            4.7        293.3        254.7           15.2

Castorama (2)               1,191.7      1,054.1           13.1            1.6        103.5         81.5           27.0
Brico Depot                   599.3        422.2           41.9           13.1         53.4         31.3           70.6

Total France (3)            1,791.0      1,476.3           21.3            4.9        156.9        112.8           39.1

Poland                        215.5        176.1           22.4           11.0         31.3         22.8           37.3
Italy                         128.6         95.1           35.2           10.2         10.0          7.7           29.9
China                          85.2         53.4           59.6            4.6        (1.8)        (3.4)            n/a
Taiwan (4)                        -            -              -              -          3.8          3.8              -
Other Int'l (5)                 0.4            -              -              -          3.1        (1.1)            n/a

Total International           429.7        324.6           32.4            9.7         46.4         29.8           55.7

Ongoing Home                5,394.9      4,674.6           15.4            5.1        496.6        397.3           25.0
Improvement

Discontinued Home             425.4        478.3                                       21.6         13.2
Improvement (6)

Total                       5,820.3      5,152.9                                      518.2        410.5


(1)    Includes e-commerce profits/(losses) in both years - 2003: #0.1m 
       (2002: #(6.0)m)
(2)    Costs of the French corporate head office in Lille have been re-allocated 
       to other operating costs in both years - 2003 #5.6m (2002 #10.5m). Also 
       restated to include e-commerce costs in both years.
(3)    2003 #1 = Euro 1.44, 2002 #1 = Euro 1.59
(4)    Joint venture (sales not consolidated)
(5)    Includes Hornbach, Koctas, B&Q Korea, Brico Stock Spain
(6)    Includes Dubois Materiaux, Reno Depot in Canada and Castorama in Belgium, 
       Nomi in Poland, Castorama in Brazil, and Castorama in Germany


Data by Country at 1 November 2003


Home Improvement                                  Store Nos                 Selling Space                     Employees

                                                                              (000s sq.m)                         (FTE)

B&Q                                                     326                         2,099                        26,012
Screwfix Direct                                           -                             -                         1,581

Total UK                                                326                         2,099                        27,593

Castorama                                               105                           961                        13,110
Brico Depot                                              57                           275                         3,417

Total France                                            162                         1,236                        16,527

Poland                                                   18                           171                         3,690
Italy                                                    17                           110                         1,688
China                                                    14                           177                         3,615
Taiwan                                                   16                            74                         1,545
Other International                                       6                            28                           506

Total International                                      71                           560                        11,044

Discontinued Businesses                                  42                           171                         2,328

Total                                                   601                         4,066                        57,492

Company profile

Kingfisher is Europe's leading home improvement retailer with leading market
positions in the UK, France, Poland, Italy, China and Taiwan. Sales for the
ongoing Home Improvement business (1) for the year ended 1 February 2003 were
#6.1 billion of which #2.4 billion or 39% was generated outside the UK.  Retail
profits for the year were #523 million of which #170 million or 33% was earned
outside the UK.

Kingfisher operates over 550 stores in nine countries in Europe and Asia.  The
Group also has a strategic alliance with Hornbach, Germany's leading DIY
Warehouse retailer, which operates more than 100 stores across Germany, Austria,
Netherlands, Luxembourg, Switzerland, Sweden and the Czech Republic.

(1) Ongoing Home Improvement business excludes Dubois Materiaux, Reno Depot, 
Nomi, Castorama Belgium, Castorama Germany and Castorama Brazil.

Enquiries:
Ian Harding                                          020 7644 1029
Director of Communications

Nigel Cope                                           020 7644 1030
Head of External Communications

Loraine Woodhouse                                    020 7644 1032
Head of Investor Relations

Further copies of this announcement can be downloaded from www.kingfisher.com





                      This information is provided by RNS
            The company news service from the London Stock Exchange
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