The City welcomed a better-than-expected third-quarter performance from DIY group Kingfisher despite a fall in retail profit and continuing problems in China.

Group retail profit slipped 4 per cent to£176 million in the period, on sales flat at£2.6 billion. The flagship UK business reported a 6.1 per cent sales decline – 9.2 per cent like for like – to just over£1 billion and retail profit fell by nearly 20 per cent to£36 million.

Kingfisher chief executive Ian Cheshire said shaken consumer confidence had hit business but maintained: “We enter this period of economic slowdown in a strong position with a robust balance sheet, international market leadership, retail brands with a strong value positioning and significant buying scale.”

Broker HSBC said Kingfisher’s attributes were becoming “more evident” under Cheshire’s leadership, but added: “Management is faced with the macroeconomic environment in which the group’s markets, particularly the UK, continue to fall away. Combined with increasing investor timidity, it is therefore too early to expect any share price recovery.”

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