24th November 2015
As Kingfisher reports its Q3 results, Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…
This morning, Europe’s largest home improvement retailer, Kingfisher, announced that stalling sales in its French operations combined with adverse foreign exchange movements resulted in Q3 earnings missing market estimates. Investors should also be aware that the company, which trades as B&Q and Screwfix in Britain and Castorama and Brico Depot in France, announced that profits declined by 6.6% to £233m which was slightly better than the £234m analysts’ expected.
Chief Executive, Veronique Laury, highlighted today that the encouraging economic backdrop of the UK is offsetting the softer conditions of the French economy. Furthermore, the company confirmed it had completed £200m of share buyback this year. However, at present, we continue to recommend Kingfisher as a ‘hold’. Despite a good level of cash flow and the potential for the new strategy to continue to make progress, the market in France remains challenging, as consumer confidence and spending power continue to be weak.