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Kingfisher cautious on macro backdrop in UK, France

Kingfisher, Europe’s largest home improvement retailer, on Wednesday reported a better-than-expected 1 percent rise in first-half profit but said it was cautious on the second-half economic backdrop in both the UK and France.

The firm, which runs B&Q and Screwfix in Britain and Castorama and Brico Depot in France and elsewhere, said it remained “comfortable” with analysts’ consensus earnings expectations for its full 2017-18 year. Earnings per share (EPS) are seen at 26 pence versus 25.9 pence in 2016-17.

Kingfisher made an underlying pretax profit of 440 million pounds ($595 million) in the six months to July 31 – ahead of analysts’ average forecast of 426 million pounds and 436 million pounds made in the same period last year.

Total sales rose 4.5 percent to 6.0 billion pounds and the interim dividend was raised 2.5 percent to 3.33 pence.

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The outcome reflected solid growth at Screwfix and the Polish business, offset by weak French markets and disruption from the group’s restructuring.

“We are aware of and are acting on the causes of this disruption, which we are confident will ease,” said Chief Executive Véronique Laury.

“We have self-help plans in place to support our overall performance and remain comfortable with full year profit expectations,” she said.

Kingfisher is in the second year of a plan to boost annual profit by 500 million pounds from 2021. The plan, costing 800 million pounds over five years to deliver, includes unifying product ranges and improving e-commerce capabilities.

“We remain confident in our ability to deliver our five year plan and in the benefits it will generate,” said Laury. (Reuters)

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