IF Screwfix France does not work out as planned,
it's arguably going to be hideously expensive experience. |
"Market share wins and cyclical upside appeal" - new note available here:
Kingfisher is primed, ready for a recovery in “big-ticket” spending. However, management’s understandably cautious guidance range for FY26E Adj. PBT has led the stock to give up its YTD gains. We believe this enhances Kingfisher’s value attractions.
Kingfisher’s FY25 results illustrated that management’s strategy to grow trade penetration and e-commerce sales is driving market share gains in the UK & Ireland, France and Poland.
Over the next three years we forecast c.36% growth in Adj. PBT and our upside scenario suggests c.90% potential growth. Whilst investors wait for this, we forecast a 10.5% FCF yield and substantial cash returns.
Hence, trading on under 9 x cal 2026 PER, we see scope for a significant re-rating. We reiterate our 340p Fair Value, equal to c.12.5x cal 2026 PER and c.3.5% dividend yield. |
None, except valuation on properties owned or leased, and businesses for sale. This company has been in transition so long it would be better off being taken over by Home Depot or something akin. |
Could someone explain the motive for making "asset impairment" and "goodwill impairment" charges. |
Edmonda do you ever anticipate a drop before the event? |
 "Home attraction; cyclical upside; cash rewards" - initiation of coverage, freely accessible research report here:
Kingfisher is an industry-leading home improvement retailer that is primed, ready for a recovery in “big-ticket” spending.
We review management’s strategy to grow sales and profit margins in the medium term. We believe that Kingfisher’s resilience in the UK is due to the successful execution of its expansion strategy into trade, online and smaller stores (among other things). By serving more customers, in more convenient ways, Kingfisher has grown UK market share and we anticipate the roll out of these initiatives will drive market share gains in France and Poland too.
Over the next three years we forecast c.40% growth in Adj. PBT and our upside scenario analysis suggests 90% potential growth. Whilst investors wait for this, we forecast a 10%+ FCF yield and substantial cash returns. Hence, trading on only c.10x cal 2026 PER, we see scope for a significant re-rating from this point in the economic cycle.
We initiate coverage with a 340p Fair Value based on 12.5x cal 2026 PER and c.3.5% dividend yield. |
is this not a good time to bid for a few Homebase stores
WHY the buybacks ???
dyor |
They were making more on pre tax (annually) well over a decade ago.
Add in inflation since and that's arguably ugly.
Every update appears to bring a new set of excuses for performance in one country or another. |
I've always found TP to be much dearer than B&Q even with my TP trade discount. |
My local B&Q (smaller branch in a smallish town), has 3 competitors within wheelbarrow range (a good well established local builders merchant, a Travis Perkins, and a Jewsons). Plus a 7-days branch of regional hardware J-Mart. And a full-size B&Q 11 miles away. This summer they dug up and relaid their carpark, which might suggest they hadn't planned on quitting anytime soon - but footfall is dire. If this is at all typical of their second-tier branches, I don't see them pulling in enough trade to survive the increased energy and labour costs. (Like so many big-shed outlets they haven't utilised the solar panels option; is that usually due to short-term lease arrangements countering the outlay?) |
"AJ Bell investment director Russ Mould observed that Kingfisher has a growth problem and until the backdrop radically improves, the company is ‘stuck in quicksand, slowing sinking. The home improvement retailer continues to keep its chin up and offer reasons to be optimistic, but in reality, there is always something holding it back.’
Mould added: ‘Consumers have tightened their belts amid uncertainties around policy changes from new governments in the UK and France – two of its major operating regions. That’s caused a wobble to sales.
‘It also faces significant headwinds from various tax changes and there is only so much these can be offset by finding new cost efficiencies. Consumer sentiment remains patchy and economic growth lacklustre, which suggests darker days ahead for Kingfisher.’" |
Yes.
Watching from the sidelines but definitely not buying yet |
I think what wealthoracle is missing is that Kingfisher goes into 2025 with sales declining in real terms, costs rising and increasing tax burden in France. The forward PE of 12.4 which it had on Friday was way too high. |
3*
Kingfisher posted a fairly average Q3 trading update for the period to 31st October this morning and the share price has sold off sharply by over 12%. The numbers were nothing special, but the share price reaction also looks a little overdone. Q3 sales were £3.2bn with total sales flat (in constant currency) and down -0.6% (reported). LFL sales were down -1.1% which was in line or ahead of the market for all key banners. So underwhelming performance, but this was more or less expected given the ongoing struggles of the housing market. The company also reported that October performance was impacted by the weak market...from WealthOracle
wealthoracle.co.uk/detailed-result-full/KGF/1009 |
This does not surprise me, K's after sales service is rubbish. If you have an issue with a kitchen. Buyers only get as far as a manager. K's firewall prevents you getting through to the CEO. Outlets are tatty, (Streatham) staff are as helpful as a wet fish. This fall has been coming, I would wait another quarter before investing. |
Results less bad than expected imo.Supports divi levels and value 300-350 range |
The results were good; worth c.350p imo |
A nice rise today, but why? |
Ed, they've been trying to fix France for about 8 years under different management teams.
France was once their most profitable country, a long time ago now. |
Yes, point taken re CNA EssentialInvestor- bad example (but I timed my buys and sells there very well FWIW, buying at 33p in early lockdown and selling a bit too early at 140p last September).
Point also taken re KGF not being a utility RB1206- but I did say that it isn't and faces stiff competition, but I'm also aware that Screwfix, B&Q and Brico Depot and Castorama in France are often 'default' options for so many people for all the bits and pieces we need in life to keep our homes OK. They also do well in the bad times as DIY goes up - and are OK in the good times as bigger ticket items get sold (as reflected by very steady sales over the years).
So whilst I bow to your undoubted sector expertise, I still stand by my estimate of valuation of c.350p of not being overly demanding - but that's what makes a market.
For the record, I bought in at 204p in October. |
Register for streaming realtime charts, analysis tools, and prices.
Hot Features
Premium
