Investors maul Kingfisher's chiefs over pay directors on

BY NIGEL COPE

Directors of Kingfisher, the troubled Woolworths and Comet retailer, came under fire from disgruntled shareholders yesterday as small investors expressed anger over handsome pay in the boardroom while the company delivered poor results.

At the company's annual meeting at the Dorchester Hotel in London, one shareholder said it was investors who suffered. "Look at the 25 per cent pay increase the directors got. What do I get? A dividend increase of 2 per cent."

Another shareholder complained that the directors had been paid pounds 6m plus share options last year. Chairman Sir Nigel Mobbs pointed out that Sir Geoff Mulcahy, the chief executive, had received a pay cut from pounds 1.3m to pounds 949,000 last year. This was greeted by roars of laughter from the floor.

Sir Nigel was also called upon to justify the pounds 2.7m in compensation paid to four directors who left the company as a result of a restructuring earlier this year. Sir Nigel said the four directors, including the chief executive Alan Smith and finance director James Kerr Muir, had been under contract. The four left after Kingfisher issued a profits warning in January.

There were shareholder questions on Comet, which made a loss of pounds 2m last year, and the difficulties at Woolworths.

Kingfisher admitted that losses at Comet in the first six months of the year would be more than the pounds 1.7m recorded last year, but said the initial aim was to recapture lost market share. Total sales had increased 10.5 per cent in the first three months, with like-for-like sales up by 5.1 per cent. The board restated its aim to return the electricals chain to profit by the end of the year.

Trading at Woolworths has been more encouraging, with like-for-like sales up 4.8 per cent. Customer traffic in its high street stores is up by 7.5 per cent, in contrast with recent results from WH Smith, which blamed lower traffic for the poor performance of its main high street chain. Woolworths' toys have performed particularly strongly, Kingfisher said.

Like-for-like sales at DIY chain B &Q were up by 3.2 per cent, while Darty, the French electricals business, saw sales rise by only 0.2 per cent. The market was unsettled leading up to the French presidential election.

Like-for-like sales at Superdrug were up by 2.3 per cent, with the repositioning towards health and beauty ranges continuing.

The company echoed recent cautious trading statements from high-street groups such as Marks & Spencer, Storehouse and Burton, saying trading has been erratic. February and March were strong, Kingfisher said, but April and May had been more subdued.