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Kingfisher under pressure to return 200m to shareholders


Kingfisher, owner of the UK's largest DIY Chain B&Q is under significant pressure to pay a £200m dividend shareholders following the failed attempt to acquire French competitor Mr Bricolage earlier this year.

The deal collapsed in March 2015 and Deutsche Bank believe this has left the company with enough available cash to give investors a one-off 8 pence-a-share payout.

The issue is expected to be raised with the board at Kingfisher’s interim results on Tuesday and a final decision is expected in the coming months.

On the up: Kingfisher has seen improving sales trends at its B&Q and Screwfix chains in the UK

If it goes ahead it would almost double the dividend payments expected to be paid this financial year. It follows a separate £100million special dividend paid last year.

The purchase was blocked after Mr Bricolage’s franchise partners refused to extend a deadline for the deal. The franchisees, who control more than 40 per cent of the business, feared that too many stores would close.

One analyst said Kingfisher might decide against returning cash to investors if it feels this ‘gives off a defensive signal’ about the possibly of future growth through acquisition.

Kingfisher is currently investing in a number of foreign markets including Germany, Romania and Portugal. The company is also repurchasing shares to help buoy the price of its stock and it is already more than halfway to its target of £200 million this year.

It is expected to give an update on its current share buy-back programme on Tuesday.

The company is also expected to say that underlying profit in the first-half increased 4 per cent to £380 million.

Kingfisher has seen improving sales trends at its B&Q and Screwfix chains in the UK.


Read more here

13 September 2015

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