B&Q owner cautious on macro backdrop in UK and France

Company made £440m pretax profit in first half of this year

Kingfisher made an underlying pretax profit of £440 million (€495 million) in the six months to July 31st. Photograph: Paul Faith/PA Wire

Kingfisher made an underlying pretax profit of £440 million (€495 million) in the six months to July 31st. Photograph: Paul Faith/PA Wire

 

Kingfisher, Europe’s largest home improvement retailer, on Wednesday reported a better-than-expected 1 per cent 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 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 (€495 million) in the six months to July 31st - ahead of analysts’ average forecast of £426 million and £436 million made in the same period last year.

Total sales rose 4.5 per cent to £6.0 billion and the interim dividend was raised 2.5 per cent to 3.33 pence.

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 from 2021. The plan, costing £800 million 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 Ms Laury.

Shares in Kingfisher, down 15 per cent over the last year, closed on Tuesday at 296.4 pence, valuing the business at £6.5 billion.

-(Reuters)