Despite a truly troublesome set of full year results in March – a report that sent it 5% lower on the day of the update – Kingfisher shares are actually having a pretty decent 2019 market-wise.
Opening at £2.25, the stock hit a near 8-month peak of £2.67 at the end of April, before admittedly pulling back to a current trading price of £2.55.
Still, that’s a solid 13% increase since the start of the year.
There was a lot going on in that aforementioned full year statement. Though it managed to eke out a 0.3% increase in total sales to £11.7 billion, like-for-like sales tumbled 1.6%. This as a 4.1% LFL rise from Screwfix, a 0.4% jump from Brico Depot and a 1.7% increase in Poland were countered by a 3% slide from B&Q and a 7.1% tumble by Castorama in France.
All this led to a 13% plunge in underlying pre-tax profit to £693 million, one that was pinned on the problems at Castorama France and losses in Russia and Romania.
However, the report was really notable for the changes to the firm’s long-running ONE Kingfisher transformation plan. Forced to abandon the target of a sustainable £500 million annual profit uplift by FY 2020/21, stating that it ‘no longer reflects’ how the business is managed, CEO Veronique Laury was given the boot, though her leaving date wasn’t announced.
Any word on her successor may be the most sought-after piece of news on Wednesday.
Beyond that, investors will specifically be looking for signs of improvement in Castorama given Kingfisher said it was ‘implementing a clear plan’ to turnaround the ailing brand. The progress of the extended rollout of Screwfix outlets in the UK and abroad will also be under the spotlight.
Kingfisher shares have a consensus rating of ‘Hold’ alongside an average target price of £2.41.
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