Kingfisher share price: DIY retailer reports strong start to year
iNVEZZ.com, Thursday, May 29: Kingfisher Plc (LON:KGF), Europe’s largest home improvement retailer, has released its first-quarter financial results. Favourable weather and a later-than-usual Easter helped the company report strong growth in both sales and profits.
Kingfisher, which runs market leader B&Q in Britain and trades as Castorama and Brico Depot in France, said in a statement this morning that retail profit for the 13 weeks to May 3, 2014 rose 20.3 percent to £142 million, just below the company compiled consensus forecast of £145 million.
Constant currency sales during the quarter were 9.2 percent higher at £2.78 billion, though reported growth was limited to just 6.1 percent, as foreign exchange movements pulled sales in France slightly lower.
Kingfisher also announced a special dividend of 4.2p per share, amounting to £100 million, as part of the previously-announced £200 million return of capital to shareholders this year.
Group CEO Sir Ian Cheshire commented on the results: “We have made a strong start to the year, capitalising on more favourable weather conditions right across Europe to achieve sales and profit growth in France, the UK and Poland, our three largest markets. Whilst this is encouraging, the first quarter is one of our smallest and the growth achieved largely reflects comparisons with the very difficult start to last year.” He added that, as usual, Kingfisher will look at the first half as a whole to “properly assess” its underlying performance.
“We have also made a good start with our key corporate priorities this year having completed the sale of our stake in Hornbach, entered exclusive negotiations to acquire Mr Bricolage in France, opened our first store in Portugal and started to return surplus capital to shareholders,” Cheshire remarked.
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Kingfisher received proceeds of €236 million following the disposal of its 21 percent stake in German DIY retailer Hornbach in March. The group revealed today that it was in “continued exclusive negotiations” to acquire French rival Mr Bricolage in France.
**Kingfisher share price plunges**
Despite the group’s upbeat quarterly update, Kingfisher’s share price opened more than four percent lower this morning. By 08:27 BST, the stock had fallen 5.63 percent to 393.60p.
Of the 16 analysts projecting 12 month price targets for Kingfisher for The Financial Times, the median target is 472.50p, with a high estimate of 510.00p and a low estimate of 300.00p.
**As of 08:10 BST, buy Kingfisher shares at 398.20p.**
**As of 08:10 BST, sell Kingfisher shares at 397.60p.**