The briefest of rises at the start of the year, with the stock climbing from an opening price of £3.38 to a 9 month high of £3.64 towards the end of February, was quickly erased by March’s poorly-received full year results.
Since then it has been almost all one-way traffic for the B&Q-owner, the company tumbling to near 7 year lows of £2.40 in late October and early November. Kingfisher (LON:KGF) PLC now sits at a current trading price of £2.42.
Mid-September’s interim update only served to make things worse for the firm. Though reported sales rose 1.2% to £6.08 billion, total like-for-likes were down 1.1%; this as LFLs fell 0.5% in the UK and Ireland and 2.4% in France, countering the overall 0.5% increase seen in its Poland-driven Other International division.
More importantly, its profit-picture was bad. From every angle it looked ugly: retail profit fell 13.5% to £404 million, underlying pre-tax profit dropped 14.8% to £375 million, while adjusted pre-tax profit plunged 18% to £323 million. The nastiest figure? A 30% collapse in statutory pre-tax profit to £281 million, the brunt of the decline coming from France thanks to a severe decline in sales at Castorama and marketing investment at Brico Depot.
It also announced that supply chain chief Arja Taaveniku was stepping down half way through its One Kingfisher transformation plan, to be replaced by company veteran Henri Solere.
In terms of the third quarter statement, any improvement in France, even the tiniest sign of progress, will be welcome, given that the region is arguably the company’s biggest headache. Not that the UK can be let off the hook; the Brexit-hit trading environment is one of the issues making Kingfisher’s transformation ‘more difficult than expected’, so a better showing there is also important. Whether any of that is achievable...well, we will find out on Wednesday!
Kingfisher PLC has a consensus rating of ‘Hold’ alongside an average target price of £3.35.
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