Brokers are calling home-improvement retailer Kingfisher a ‘hold’ after the business reported a 0.8% rise in like-for-like sales and an increase in retail profit of 1.4% to £150m during its first quarter.
The company, which owns B&Q and Screwfix, operates over 1,200 stores in 11 countries based in the UK and Asia. UK and Ireland sales rose 1.6% on a like-for-like basis, whilst the company’s second biggest region, France, saw sales fall 1.2%.
Commenting on the results Graham Spooner, investment research analyst at The Share Centre, said: “Within this mixed bag of news, investors should note that there are plans to improve the group. New CEO Veronique Laury has initiated the One Kingfisher program, which focuses on creating a new, internal leadership team whilst closing excess stores as more customers chose to shop online. These changes may hopefully be reflected in future figures for the company.”
Brewin Dolphin equity analyst Nicla Di Palma noted in the group’s announcement there was very little commentary in the statement, aside from the CEO’s words on the One programme. Di Palma added: “This is based on a significant increase in products commonality amongst regions. Potentially, this could drive a significant increase in margins, although there are implementation risks. The balance sheet is solid and we believe there is the potential of an increase in the buyback programme – from £200m to about £300m.”
Kingfisher’s shares rose 2.8% in early trading, but are 12% down on 12 months ago. In line with the market consensus, Spooner is calling Kingfisher a ‘hold’.
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