* Kingfisher pretax profit down 11.4 pct to 715 mln stg
* Forex movements cost it 39 mln stg, weather 25 mln stg
* Wolseley H1 profit 199 mln stg, down 20 pct
* Bellway H1 profit 59.9 mln stg, up 47.5 pct
By James Davey
LONDON, March 26 Britain's Kingfisher
and Wolseley reported sharply lower profits as
cash-strapped consumers cut back on home improvements in the
Kingfisher, Europe's largest DIY retailer, and Wolseley, the
plumbing supplies group, are battling a prolonged squeeze in
disposable incomes in Europe that is particularly affecting
sellers of "big ticket" items such as kitchens and bathrooms.
British home improvement firms are also being hit by a
continuing low level of housing transactions, since moving house
is often associated with spending on home improvements.
Poor weather has also hit demand. In 2012 Britain had its
wettest summer in 100 years, while 2013 has got off to a cold
start with average March temperatures on course to be the lowest
for 40 years, according to the Meteorological Office.
Kingfisher, which runs market leader B&Q in Britain and
trades as Castorama and Brico Depot in France, on Tuesday
reported an 11.4 percent fall in underlying pretax profit to 715
million pounds ($1.09 billion) in the year to Feb. 2.
That was in line with analysts' consensus forecast but down
from 807 million pounds in 2011-12.
Group sales fell 2.4 percent to 10.57 billion pounds, with
weak consumer confidence resulting in like-for-like sales
declines in its three key markets of Britain, France and Poland.
Adverse foreign exchange movements when translating overseas
profits in euro and Polish zloty into sterling knocked 39
million pounds off profit, while rain in Britain cost it 25
million pounds as fewer customers visited its stores.
Chief Executive Ian Cheshire told reporters improvement in
UK employment data and measures to stimulate the housing market
in finance minister George Osborne's budget speech last week
were encouraging signs, though any recovery looked fragile.
"We're planning on markets not really giving us any help and
us having to go out and work harder. Equally it would be bad
luck if we got another 100 year summer," he said.
It was too early to say what impact a cold February and
March would have on first-quarter sales, said Cheshire, noting
April was the key month for horticultural trade.
Kingfisher, the world's No. 3 home improvements retailer
behind U.S. groups Lowe's and Home Depot <HD.N, is
partially offsetting weak demand with a drive to improve
profitability by buying more goods centrally from cheaper
manufacturing centres such as China.
Its shares, down 9 percent over the past year, were up 1.2
percent at 286.8 pence at 1312 GMT, supported by a net cash
position of 38 million pounds and a 7 percent dividend rise.
At Wolseley, exceptionals mostly consisting of
write-downs, disposals and staff redundancy costs amounted to 87
million pounds, which helped push pretax profit down 20 percent
for the six months to end-January to 199 million pounds.
Of the charges, 63 million pounds was related to France
where the firm is looking to dispose of and close up to 40
percent of its building materials business Reseau Pro. The group
has cut 990 jobs in Europe since August as homeowners and
businesses in the region put off repairs and maintenance to
Group revenue fell 8.1 percent to 6.28 billion pounds.
Wolseley shares were down 3 percent at 3,115 pence.
In sharp contrast to Kingfisher and Wolseley, British
housebuilder Bellway beat forecasts with a 47.5 percent
rise in pre-tax profit in the six months to end-January to 59.9
UK housebuilders have defied the economic downturn by
snapping up development land cheaply during the recession and
focusing on the south where house prices have stayed strong.
Bellway's revenue rose 9.6 percent to 502.5 million pounds,
helped by higher selling prices.
Its shares rose 2 percent to 1,217 pence.