Kingfisher shares spike as results beat forecast
Kingfisher shares leapt by more than 5pc yesterday after the DIY group posted better than expected profits and signalled its intention to continue returning cash to shareholders despite a persistently challenging trading environment.
The owner of B&Q and Screwfix chalked up 0.9pc year-on-year rise in underlying pre-tax profits to £440m. Retail profits increased by 0.5pc to £467m on the previous period - outstripping market forecasts.
Davy analyst Michael Mitchell had pencilled in £453m and attributed the stronger performance to the "more resilient than expected" margin.
Kingfisher provided a quarterly update in August and while top-line growth showed a technical increase of 4.5pc, underlying sales growth fell 1.3pc.
Mr Mitchell cautioned against excessive investor ebullience at the jump in the stock price - by mid-morning the shares had spiked by 7.9pc - and stressed the investment case centres on "the group's top line performance going forward including in its struggling French businesses and how effectively it can implement its strategy over the coming period".
Kingfisher is in the midst of a five-year revamp that will result in greater integration of its DIY chains in the UK and Europe.
Despite this investment outlay and the difficult trading conditions, Mr Mitchell pointed out that Kingfisher's share buyback scheme remains ahead of schedule while net cash sits at £650m.