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Jason

Sharp Uk Downturn Hits Kingfisher

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http://news.bbc.co.uk/1/hi/business/4827890.stm

Profits at B&Q owner Kingfisher have more than halved amid a "sharp downturn" in UK spending.
Pre-tax profits sank 64.2% to £231.8m ($406m) for the year to 28 January, from £647.7m the year before.
The company said B&Q experienced its weakest UK market in years, prompting a 3.7% drop in reported sales to £3.9bn.

Reuters: http://today.reuters.co.uk/investing/finan...SHER-URGENT.XML

Edited by Jason

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Yep, this is very, very significant news. EAs can spin the news anyway they like, but companies will tell the market how it is, and profits here speak volumes.

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This was on the Radio Five main news segments this morning. The line was, "Profits down blah blah, the group are blaming high household debt and uncertainty about the housing market."

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A colleague in the process of a house purchase told me this news this morning - he knows my stance on HPC and was saying he was 'wondering whether to phone the EA and cancel the deal' :o:D How many others are thinking along similar lines over news like this... ;)

Edited by Badger

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This was on the Radio Five main news segments this morning. The line was, "Profits down blah blah, the group are blaming high household debt and uncertainty about the housing market."

Blah, Blah.... spot on though.

Over indebtedness and economic uncertainty are causing the current retail slowdown.

I thought that the retail slowdown would have started earlier than it did, but I suppose I gave the general public a bit more credit than they were due (not to self: People is stupid :blink: )

My predictions were always that:

  • big tick items would be hit first (new car sales, sofas, high value electricals).

  • Followed by other discretionary goods.

  • Followed by movement downmarket (ie Tesco shoppers going to Aldi)

I think we are now somewhere between the first two.

New cars sales have suffered.

High value electrical goods are seeing some problems.

Some evidence of lower discretionary spending.

Not sure about people going downmarket yet.... I think people are spooked at the moment, they didn't expect to see news about economic problems, rising unemployment or house price falls so they're just sitting back.

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Notice how -3.7% drop in sales hits profits hard.

Does this also indicate squeezed margins, remember all those discount weekends at B&Q.

Then, as we know, operating costs are increasing for businesses but probably with little chance of increasing margins in the current climate.

Not a pretty picture for the future.

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OMFG, they can't afford Waitrose anymore.... how will the poor little darlings survive?

I can't stand Waitrose. The products are ok, but the prices are bordering on criminal.

I've recently been trying to buy mainly from small businesses in my local area. Luckily I've just had a row of shops near me all change ownership (last year or two) and there is now:

An organic greengrocer

A quality butchers

A good bakery (Excellent fresh bread)

A pharmacy

A small co-op supermarket (for baby food & washing powder etc.)

When I manage to shop there the food is always better than the supermarkets, and generally seems to be cheaper.

And I'd rather be supporting local businesses than supporting Tesco's runaway profits.

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OMFG, they can't afford Waitrose anymore.... how will the poor little darlings survive?

I can't stand Waitrose. The products are ok, but the prices are bordering on criminal.

I've recently been trying to buy mainly from small businesses in my local area. Luckily I've just had a row of shops near me all change ownership (last year or two) and there is now:

An organic greengrocer

A quality butchers

A good bakery (Excellent fresh bread)

A pharmacy

A small co-op supermarket (for baby food & washing powder etc.)

When I manage to shop there the food is always better than the supermarkets, and generally seems to be cheaper.

And I'd rather be supporting local businesses than supporting Tesco's runaway profits.

I'm just going through price changes for Waitrose. Increase for Grocery = 6.3% for 6 months!!! (Although, alot of the prices are going up after xmas discounts)

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Remember remember though that B&Q have their own Vested Interests too.

They've lost 60% of revenue..."lets blame the house-market rather than blame ourselves for being crap at our jobs!"

I'd take it with a pinch of salt but its interesting to see how different sectors play tug-of-war with interest-rate pleas.

Retail: "please lower rates...noone can afford our stuff."

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It's ok everyone:

Kingfisher dives but revalues property in an attempt to keep predators at bay
KINGFISHER, the owner of B&Q, yesterday sought to defend a grim performance and deter possible predators as it revalued its property portfolio at £3 billion.
Its shares rose 5p to 248p to reflect the £600 million increase in the value of the group's property. The rise came despite a 64.2 per cent slump in pre-tax profits to £231.8 million after £215.4 million of exceptional items, in line with expectations.

More: http://business.timesonline.co.uk/article/...2097306,00.html

Edited by Jason

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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