Shares in Kingfisher were up on the FTSE 100 in morning trading after the retailer reported a rise in pre-tax profit of over twenty per cent in the half year ended 31 July.

Sales were reported as falling 0.9 per cent to £5.5 billion, while pre-tax profit increased 22.9 per cent to £354 million.

Despite the rise in profit Kingfisher said it would be holding its interim dividend at 1.925 pence per share.

Since the last interim results announced a year ago, Kingfisher said it had eliminated its net debt of £740 million and now had net cash of £19 million.

The group said that self-help initiatives had helped deliver a "robust growth in profit". In France, where Kingfisher runs stores such as Castorama, profits were up 13.7 per cent to £160 million. In Britain and Ireland, where the company is better known for its B&Q stores, profits were up 15.8 per cent to £171 million.

In the rest of the world profits increased 21 per cent to £71 million, thanks to strong growth in Spain and Turkey. In China the group halved its losses while in Poland profits fell slightly.

Ian Cheshire, Chief Executive of Kingfisher, said, "We have traded well with profit again strongly ahead and financial debt reduced. Our Delivering Value programme of self-help initiatives is working well, meaning Kingfisher now generates significantly higher profits and cash flow from its operations and a much better return on capital for its shareholders.

"As we have consistently said, the immediate outlook for consumer spending is fragile, particularly in the UK where it is likely to remain challenging for some time. Our continued profit growth will come from our well-established self-help initiatives, including sourcing more products through our global network and vigorously driving operating cost efficiencies. At the same time our strong balance sheet and cash flow enables us to continue to invest more this year to grow our business, refresh our stores and introduce new products and services to provide the inspiration and solutions our customers want to help them improve their homes."

Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "The creditable performance has been rewarded with a price hike in early trade, although the shares have underperformed of late.

"The group's continued focus on cost control and purchasing economies has resulted in a robust set of numbers. Looking further out, Kingfisher seems well placed in its various overseas markets, which in general are making strong contributions to overall profitability. The medium term outlook was highlighted as being challenging by management, particularly in the home UK market where the full force of the austerity age has yet to take hold. Even so, margin initiatives and the company's cash generative ability leave it positioned to benefit from any improvements in the economic environment.

"The vague bid speculation surrounding Kingfisher appears to have subsided for now, whilst the difficult UK situation has also contributed to a 5% fall in the share price over the last three months, during which time the wider FTSE100 has added 6%. Even so, prospects for future growth are moving into focus and the general market consensus remains that the shares are a buy."

By 10:10 shares in Kingfisher were up 2.56 per cent on the FTSE 100 to 224.50 pence per share.

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