Like a shoddy bit of DIY, Kingfisher shares fell apart as 2018 went on. Starting at £3.40, they eventually ended the year at £2.07, the lowest seen since September 2010, and a 39% slump across the 12 months.
2019 has seen a mild rebound, though one partially undone in early March. Kingfisher shares now sit at a current trading price of £2.40.
The company hasn’t updated since November’s third quarter results. There it revealed that, while it had eked out a 0.2% increase in group revenue on a reported basis, Q3 like-for-likes were actually down 1.3% due to a 0.7% drop in the UK and Ireland, and a 3.4% slide in its persistently troubled French division.
Break it down further, and B&Q and Castorama were the main problems, falling 2.9% and 7.3% respectively; in contrast, Screwfix was up 4.1%, with like-for-likes at Brico Depot rising 1.1%. Kingfisher did, however, increase its Q3 gross margin after clearance by 40 basis points.
Arguably the most significant part of the statement was the announcement that the next part of the company’s ONE Kingfisher transformation involves exiting Russia and Iberia (i.e. Spain and Portugal) despite like-for-like growth in both regions.
As for the full year, Kingfisher said that it expects to ‘grow gross margin after clearance in the UK, Poland and Brico Depot France’, but that the outlook for Castorama was ‘more uncertain given difficult trading’ and the impact of the ‘gilets jaunes’ demonstrations. The performance of the UK in the fourth quarter will be carefully eyed, as will the firm’s forecasts for a Brexit-dominated financial 2019.
Kingfisher shares have a consensus rating of ‘Hold’ alongside an average target price of £2.61.
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