Kingfisher Share Discussion Threads

[ed 123] 18/7/2017 12:08

Trading at 304p after a double bottom at 294p. Close to a 4 year low. The 4 year performance is, in part, a reflection of the tougher retail environment, but also France has disappointed.

Fwiw, following other clues, I think the trading update may be slightly weaker. However, I don't see the shares falling hard from here. Guessing, maybe 285p after the update?

(It feels like the Brexit effect is chipping away at UK retail confidence.)

[ed 123] 18/7/2017 08:35

Safestyle trading update today.

... uncertain market conditions and weaker consumer confidence ...



Will Kingfisher's UK market be softening?

[essentialinvestor] 17/7/2017 22:37

17 August is the Q2 update Joe.

[contrarian joe] 17/7/2017 22:20

Okay thanks Ei/Ed,,you both make valid points,have noticed they have ramp ted up advertising of late which might tie in with house sales decline.Reading their latest results they have a considerable land portfolio valued at £3.4bn,cash&cash equivalents of £795m,nav £6.78bn,cash flow positive,small amount of debt,Ev/Evitda 5.76,pts 0.59,i'me half expecting a cautious TS.

[essentialinvestor] 17/7/2017 06:40

Market expectations are already low which is bullish,
however they may not be low enough imv.

With KGF there is always the outside possibility of a bid.

Listened to the Q&A on the last conference call and was not overly impressed,
just my take.

At some point this may be a cracking contrarian play,
from what share price level is the interesting and more challenging call.
Perhaps it's a great buy here, if so that would surprise me.
Longer term the buying case may be stronger which is why I hold some.
All imv only.

[ed 123] 16/7/2017 23:37

Hi Contarian Joe.

The shareprice may be saying eps to be below previous expectations?

House sales are one of the drivers for KGF's UK businesses. However, UK house sales have fallen.



Also, the performance for KGF's French businesses was poor at the last update. Will there be any improvement in the next update?

KGF to fall to 250p by the end of 2017? I don't know .... but it's possible.

The second quarter trading update will be released on 17th August. I want to read that update before deciding anything.

[contrarian joe] 16/7/2017 22:30

They spiked down to 285p in 2014, (market had already anticipated poor 2015 eps of 21.3).Likewise now markets are factoring in poor 2017/18 eps of 23.4p (that's 10% above 2015 figure) PE valuations are a lot higher than 2014 (FTSE).So Mr market not being very kind to poor old KGF at the moment deciding to award them a p/e of 10.7 for 2018/2019 eps forecast of 26.8.

[essentialinvestor] 14/7/2017 22:29

2.50 is possible on weaker than expected trading imv.

Added back a few before the close sold yesterday.

A MKS like reaction to the next update would not surprise me,
so do not have conviction to hold in any quantity atm.
My take may be too cautious.

[contrarian joe] 14/7/2017 21:52

You make some valid points Ed123.
sp Rev Margin EPS P/E/AV
275P £8.6BN 5.3% 12.5 17.5 2007
110P £9.5BN 4.7% 11.8 10.8 2008
200/250 £10.25BN 4.3% 12.9 14 2009
200/250 £10.5BN 5.46% 16.8 13.8 2010
280? £10.45BN 6 .34 21.8 12.1 2011
280? £10.8BN 7.77% 27.6 10.2 2012
375? £10.6BN 6.5% 25.1 13.0 2013
300/428 £11.12BN 7% 25.8 15.0 2014
320/370 £10.7BN 5.9% 21.3 17.0 2015
310/380 £10.45BN 5% 23.8 14.5 2016
293/350 £11.25BN 6.8% 28.4 10.5 2017 (Est)
? £11.6BN ? 23.4 12.8 2018 (Est)
? £11.96BN ? 26.8 10.0 2019 (Est).

Though that 250p looks a stretch to me,possible maybe?.

[ih_375993] 13/7/2017 12:25

Templeton buy wont do any harm

[essentialinvestor] 12/7/2017 20:10

At least they are cancelling chunks under £3 atm.

France performance is concerning, so hopefully they have invested in some
price positioning.

It wouldn't surprise me if the next update disappoints,
however unless very weak will look to add at lower levels, may not happen.
If something fundamentally has changed would need to reassess.

[dan_the_epic] 12/7/2017 20:00

It was downgraded, by UBS.

Morgan Stanley note argued fair value north of £4 on asset base alone

[ddubzy] 12/7/2017 12:56

So Morgan Stanley upgrades to overweight with a 380p target, from 290p....Stock drops 3%+ !! Glad it wasn't downgraded!

[ed 123] 12/7/2017 11:51

Fwiw, with very few exceptions, I don't like companies buying back their own shares.

There are big bets against UK consumer stocks. At some point they'll be a rewarding contarian play. Myself and fwiw, I think it's too early to go back into KGF. But that's just my opinion, could easily be wrong. Good luck.

[essentialinvestor] 12/7/2017 11:32

I'm back in, have traded in and out in small amounts to
reduce average holding price, very modest position.

[ddubzy] 12/7/2017 11:31

Buy backs continuing to do sod all then!

[ed 123] 12/7/2017 11:05

Well, after a strong start it's gone negative and broken down through 300p.

Fwiw, I think the short sellers are brave. I wouldn't rule out Home Depot interest.

I'll continue watching. 2nd quarter trading update is due in 5 weeks time (17 August). It'll give another clue, especially if there's any improvement in France. However, I think the sellers are playing longer term than this - looking for eventual UK decline, the financial impact of which would be magnified by Kingfisher's operational gearing.

Buy in 12 months time at 250p?

[ed 123] 12/7/2017 09:13

Interesting that one of the bears has turned bull this morning.

JP Morgan upgrade to 'overweight'. Target price up from 290p to 380p.

Anyone got the reasoning behind this?

It may be the strengthening of the French economy?

Countering this, shorts have increased from about 0.7% in June to 2.57% now.

UK consumer weakening, French economy is strengthening. Poland is going well.

I'm out atm. It would be a shame to be out if that Home Depot bid finally landed. Looking longer term, UK consumer should recover. Buying now would lock in the current dollar/sterling rate. I wonder if Home Depot are tempted?

[ed 123] 28/6/2017 11:01

Ta, ih_375993. :-)

Results look good but I wonder how much read across to Kingfisher? One is telecoms and electrical retailer the other is building materials and diy retailer. Also, only approximately 50% overlap in geographical areas. Still, it's good to see a retailer doing well.

[ih_375993] 28/6/2017 10:52

Dixons results?

[ed 123] 28/6/2017 10:04

Ta, EI. :-)

[essentialinvestor] 28/6/2017 10:02

Hi Ed, TPK and HWDN higher as well, not as much,
may be some broker comment.

[ed 123] 28/6/2017 09:58

FTSE100 down 38 points atm. KGF up 4p.

I don't know why. Has anyone got a suggestion?

[essentialinvestor] 07/6/2017 16:08

You need what's called a confidence and supply motion to form a UK government
when short of a majority, that is if you do not form a coalition.


It really depends on number of seats, as an example if CON fell just a few seats
short they could govern with support of the unionist MP's, if the two
combined gave them a majority.

If CON fall well short, then more likely an Labour minority government supported
by the SNP. Of course there would be a price to pay for this!.

I heard some activists on the ground are far more cautious on LAB prospects
than support shown in some of the published polling indicates.