The B&Q-owner had a rocky 2017. It managed to ascend to a 6 month, £3.70-grazing high in late May, only to plunge all the way to £2.90 by mid-September thanks to some value-sapping French woes. It mounted a decent comeback before the year was over, however, closing December at £3.41 to limit its annual market-decline to just 3%.
The stock has broadly moved higher in 2018, crossing £3.60 for the first time in 9 months in late February. However, it has pulled back slightly since then, with Kingfisher PLC now sitting at a current trading price of £3.49.
The last few updates from Kingfisher have been a mixed bag. Back in September the firm posted a 2% decline in interim like-for-like sales, but with a 4.3% jump in total sales, a forecast-beating 0.9% increase in underlying pre-tax profit to £440 million and the announcement of a £60 million share buyback. As for its one Kingfisher transformation, CEO Veronique Laury stated the company is ‘confident’ in its ability to deliver the benefits of its 5-year plan, namely the £500 million boost to annual profits from 2021.
The half year figures continued to show a split between certain sections of the business: comparable sales were down 4.6% in France but up 3.8% in Poland and 1.1% in the UK & Ireland; Screwfix, meanwhile, remained its best performing chain, with an 11.7% surge in LFLs against B&Q’s 2.3% slide.
These divisions remained just as present in November’s Q3 update. UK and Ireland like-for-likes rose 1.5%, with B&Q down 1.9% and Screwfix up 10.9%; in France, meanwhile, they fell 4.1%, countered by a 6.0% jump in Poland. All this led to a 0.5% drop in total group like-for-likes for the quarter ending 31st October.
In terms of Wednesday’s annual results, ideally Kingfisher will post another better than expected underlying pre-tax profit number. Investors will also want to see that the slight easing of French like-for-like losses between the half year and Q3 continued into the fourth quarter.
Kingfisher PLC (LON:KGF) has a consensus rating of ‘Hold’ alongside an average target price of £3.33.
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