Saturday 12 June 2010

B&Q owner Kingfisher expects World Cup bounce

Kingfisher, the owner of B&Q, rose 2.2% to 228.7p on hopes that the World Cup will spur a wave of consumption in Britain and France, where it also runs the Castorama DIY chain.

The company said it has almost sold out of a garden gnome dressed in the England team kit ahead of the World cup 2010. It is also selling garden furniture and equipment stamped with the England flag.

The group reported quarterly figures in line with expectations, with retail profits up by 15% to £146m in the 13 weeks to 1 May, although like-for-like sales in the UK were down by 2.8%.

"In view of the company's success with its improvement of gross margins in all its divisions, we believe the stock, which is trading at the low end of its trading range, is beginning to look good value," said Seymour Pierce in a note to investors.

Also hoping for a World Cup boost is pubs group Young's, up 29p to 549p, which said it has made a good start to the current year.

Chief executive Stephen Goodyear said he was "cautiously optimistic" despite the risk of more restrained consumer expenditure in the near term.

Underlying profits for the year to end March edged ahead by 1.4% to £19.4m, but this was at the top end of analysts' expectations.

"These are a good set of results, considering the current environment," Seymour Pierce said in a note. "This leaves the group in an excellent position to take advantage of acquisition opportunities. We believe it also allows the group to trade better and make longer term investment decisions without a Damocles sword of debt hanging over it, as with so many pub groups."

http://www.guardian.co.uk/business/marketforceslive/2010/jun/03/kingfisher-b-and-q-youngs-world-cup-bounce

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