Kingfisher, owner of the B&Q retail chain, today blamed a revamp of its UK stores for a near 12 per cent fall in third-quarter profits which dragged down the rest of the group despite strong overseas trading.

There has been widespread speculation that Kingfisher's performance could force a cut in the dividend.

Mr Duncan Tatton-Brown Kingfisher's group finance director and the man fielding today's questions, refused to comment and said that the company will review its dividend policy in March.

He said he expected the City consensus on full-year pre-tax profit to fall from £395 million to between £380 million and £390 million following today's third-quarter update.

The shares rose 3.38 per cent to 165.4p, a shade off their ten-year low. The shares have fallen from 284p this year.

The group, currently searching for a new chief executive after Gerry Murphy announced earlier this month he is stepping down, said UK profits dropped 11.9 per cent to £45.3 million while like-for-like sales fell by 0.5 per cent.

During the three months to November 3, total UK sales including gains from new stores opened, rose 3.5 per cent.

Group profits fell 1.9 per cent to £171.7 million on like-for-like sales up 1.9 per cent and total trading up 6.4 per cent at £2.4 billion.

Kingfisher is refurbishing its UK stores at a cost of £2.5 million. It is losing £1 million per store during the work. Introducing new stock has meant the company has been forced to discount £12 million worth of old products.

On the UK market and its revamp programme, Mr Tatton-Brown, said: "Unfortunately, we are doing this in a weak market, which is widely expected to get worse."

Elsewhere, Kingfisher's French operations, where it trades as Castorama and Brico Depot, reported sales were up 5.6 per cent with like-for-like trading increasing by 2.3 per cent.

Profits rose 16.6 per cent to £89.3 million, as the group increased the amount of directly sourced products and its own branded products.

Poland performed strongly, helping to lift third-quarter sales in Kingfisher's European division by 18.6 per cent in total, while like-for-like trading increased by 10.1 per cent despite a poor performance in Italy and Germany.

Asia lost £4.6 million despite a slight increase in sales after attempts by China to take the heat from its property market cut the number of new build apartments.

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