Kingfisher, the owner of B&Q, saw profits slump 75% last year as it took huge writedowns on its loss-making Chinese operation, saying it plans to close stores there.

New chief executive Ian Cheshire said his plans to cut costs and deliver value were starting to work and that the group is capturing market share from rivals at B&Q and its French stores Castorama and Brico Dépôt.

As the recession bites, B&Q is benefiting from a shift away from DFY (Do It For You) back to traditional DIY and trading down by upmarket customers from posh kitchen and bathroom stores to DIY sheds.

In China, a faster-than-expected slowdown in the property market coupled with some poor choices of store locations led to trading losses of £52 million. The group will shut 22 of the 63 stores there with a one-off charge of £107 million and goodwill writedown of £124 million.

Group pre-tax profits were just £90 million but before the one-off charges Kingfisher said they rose 3% to £368 million. The first-half dividend was cut and the final is unchanged, making a total 27% lower at 5.32p.