Kingfisher (KGF) may have reported underlying pre-tax profits ahead of expectations, but the B&Q owner said ongoing pressures in France and a poor performance in the UK still led to an 11 per cent decline in adjusted earnings last year. Like-for-like sales also fell 0.7 per cent at constant currencies to £11.7bn.
The group reckons underlying revenue growth was hurt by “business disruptions” – specifically issues around the timing of clearance versus new product availability, volatility in France and softer demand for big-ticket items by UK customers in the fourth quarter. In fact, the reason the group’s net cash position looks radically different year on year is down to a higher level of inventory following changes made to the operating model.
Ultimately, it seems the ONE Kingfisher plan – designed to unify and streamline the business – is causing something of a short-term headache. Bosses also said the roll-out of a single IT platform had put “pressure” on “some business functions”, while other transitions to “new ways of working will take time”.
Analysts at Cantor Fitzgerald believe consensus pre-tax profit expectations still stand at £822m for the year ending January 2019, up from £797m in FY2018.
| KINGFISHER (KGF) | ||||
| ORD PRICE: | 309.7p | MARKET VALUE: | £6.69bn | |
| TOUCH: | 309.6-309.8p | 12-MONTH HIGH: | 370p | LOW: 285p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 312p* | NET CASH: | £68m | |
| Year to 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 11.1 | 759 | 30.0 | 9.9 |
| 2015 | 11.0 | 644 | 24.3 | 10.0 |
| 2016 | 10.4 | 512 | 17.8 | 10.1 |
| 2017 | 11.2 | 759 | 27.1 | 10.4 |
| 2018 | 11.7 | 682 | 22.1 | 10.8 |
| % change | +4 | -10 | -18 | +4 |
| Ex-div: | 03 May | |||
| Payment: | 18 Jun | |||
| *Includes intangible assets of £2.79bn, or 129p a share | ||||
