DIY giant Kingfisher aims to grow by expanding internationally over the next five to 10 years.
The B&Q owner intends to increase its proportion of international sales from 17% to 24% in the next five years.
Group chief executive Ian Cheshire said: “We definitely want to look at growth opportunities and new markets.” He said there was a “long list of options”, including India, Brazil and eastern Europe. He ruled out the US, which is dominated by Home Depot and Lowes.
Kingfisher had suffered a “pretty torrid time” in Poland, due to bad weather and the death of the president in an air crash, which led to a 6% like-for-like fall there in the first half. But it plans to increase its store count in the country from 56 to “well over 100 stores”.
While he was cautious about UK prospects, Cheshire maintained there were still opportunities for domestic growth. “B&Q is a big beast we want to grow,” he said. But added: “We’re not expecting a lot of help from the market and 2011 will be difficult.” He said budget cuts, tax increases and the VAT rise were likely to affect spending.
But he said he was “beginning to feel a bit more positive about 2012”, now there was more clarity about Government plans.
Kingfisher’s group adjusted pre-tax profit surged 22.9% to £354m in the 26 weeks to July 31, when revenue slid 0.9% to £5.45bn. Like-for-like sales dropped 1.3%. At its UK arm, profits rose 15.8% to £171m although B&Q’s total sales in the UK and Ireland fell 3.1% to £2.1bn and were down 3.7% like-for-like.
Cheshire said a reduced level of promotions at B&Q contributed to improved profits but had affected like-for-likes.
“We turned down the promotional stance in the UK,” said Cheshire. “It doesn’t feel like a market that is responding.”
The French division posted etail profit up 13.7% to £160m and like-for-likes ahead 1.4%.
The rest of Kingfisher’s international business delivered a 21% surge in profits to £71m, led by Spain and Turkey. A halving of losses in China offset the profit decline in Poland.
Cheshire said that group sourcing would be a “big plank” in growth over the next five to 10 years. Kingfisher has developed 10 ‘super brands’, whittled down from 150 existing own brands.
Cheshire described that move as a “significant step in Kingfisher’s development”. The super brands will start to appear next year across the group, and include Cooke & Lewis kitchens.