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UK DIY News

Kingfisher sings amid the gloom

Punch-drunk dealers rubbed their eyes in disbelief on seeing a retailer sitting pretty near the top of the Footsie charts.

It had been a terrible week for the sector with disastrous profit warnings from Mothercare and Supergroup casting a dark cloud over the High Street, but B&Q do-it-yourself group Kingfisher yesterday shrugged off all the doom and gloom with a gain of 7.4p to 254.95p.

Kingfisher reported a better-than-expected 24 per cent rise in interim pre-tax profits to £439million last month and loyal shareholders enjoyed a 28.3 per cent increase in the dividend.

A strong performance by its French businesses, Darty and Castorama, more than offset a weak B&Q in the UK which suffered a worse-than-expected 6.7 per cent like-for-like sales decline.

Analysts at Espirito Santo are big fans and have a fair value price of 330p. Following the impressive half-year figures they told clients that profits growth of 24 per cent and five to ten-year growth plans are not things that many retail companies have been able to discuss in the current environment.

Chief executive Ian Cheshire has made top-line growth a key element of the next five-year growth plan. With no dominant global DIY player or brand, there is a feeling in the business that Kingfisher can deliver top-line growth even in mature countries through more innovative and affordable products.

Source : Geoff Foster – This Is Money.co.uk
www.thisismoney.co.uk/money/markets/article-2046640/MARKET-REPORT-Kingfisher-sings-amid-gloom.html#ixzz1aB6AuOoy

07 October 2011
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