The so-called 'Delivering Value' programme implemented by Kingfisher's newly installed executive team lived up to its name last year. The seven-step, self-help initiative saw a 250 basis point improvement in returns on capital over the year, to 8.3 per cent, and drove retail profits 29 per cent higher to £664m.
A key focus has been on improving profitability in the group's core UK and Irish retail business, and a major shake-up of its distribution helped the division's margins climb from 2.8 per cent to 4.9 per cent. It also benefited from group-wide initiatives to reduce shrinkage across the business, directly source more ranges common to its global operations, and lower stock levels. The tough focus on working capital generated free cash flow of £761m, up from £387m, enabling a similar level of debt reduction.
With the business now on a firm financial footing, Kingfisher is aiming to double capital expenditure this year to around £400m, including store revamps in the UK and a raft of openings in Eastern Europe. It will continue to rationalise its Chinese business, though, where reducing store numbers by a third has underpinned a swing back towards profits.
Broker Seymour Pierce expects underlying full-year pre-tax profits of £610m and EPS of 18.2p (£547m and 16.4p).
| ORD PRICE: | 226p | MARKET VALUE: | £5.33bn | |
| TOUCH: | 225-226p | 12-MONTH HIGH: | 249p | LOW: 134p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 209p* | NET DEBT: | 5% | |
| Year to 30 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 8.0 | 232 | 6.0 | 10.65 |
| 2007 | 8.7 | 450 | 14.4 | 10.65 |
| 2008 | 9.1 | 366 | 10.9 | 7.25 |
| 2009 | 10.0 | 90 | 0.2 | 5.33 |
| 2010 | 10.5 | 566 | 16.5 | 5.50 |
| % change | +5 | - | - | +3 |
Ex-div: 5 May Payment:18 Jun *Includes intangible assets of £2.4bn, or 104p a share | ||||
