Weak trading amidst grim UK summer weather significantly explains these underwhelming half-year figures from DIY retailer, Kingfisher - that sliced £30m from profits, while foreign exchange movements meant a £25m hit. Add that to weak consumer conditions and the shares, which aren't especially cheap for the sector, now look up with events.
At the UK & Ireland unit, B&Q's like-for-like sales tumbled 6 per cent - with outdoor seasonal product sales down 11 per cent and footfall down 20 per cent in the most severely weather affected weeks. Screwfix grew sales 8.9 per cent to £273m - but that business generates just 12 per cent of the division’s sales, and this was not enough to prevent the unit's profit tumbling 20 per cent to £145m. Business in France - the Castorama and Brico Dépôt operations - is hardly booming, either. Like-for-like sales there slipped 0.6 per cent and profits were down 4.9 per cent to £191m. The other international unit also struggled, posting a 1 per cent fall in like-for-like sales.
Accelerating the roll-out of commonly sourced own brands meant a £10m cost, too - not a great start to a five-year self-help plan, announced in March, to deliver £300m of annualised retail profit by the fifth year.
Deutsche Bank expects full-year pre-tax profit to fall from £797m to £740m, giving EPS of 22.5p (24.6p: 2012).
KINGFISHER (KGF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 272p | MARKET VALUE: | £6,445.0m | |
| TOUCH: | 271-272p | 12-MONTH HIGH: | 317p | LOW: 227p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 238p* | NET CASH: | £29m | |
| Half-year to 28 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 5.66 | 438 | 13.7 | 2.47 |
| 2012 | 5.48 | 364 | 11.1 | 3.09 |
| % change | -3 | -17 | -19 | +25 |
Ex-div: 10 Oct Payment: 16 Nov *Includes intangible assets of £2.54bn, or 107p a share | ||||
