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Kingfisher – papering over the cracks

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Kingfisher shares fell 3.4% after second quarter results . The group confirmed a continued deterioration in sales in France, and while a solar powered performance from the UK helped lift reported numbers, underlying results were again weak.

George Salmon, Equity Analyst at Hargreaves Lansdown:

“Kingfisher’s results are yet more evidence that the nation’s obsession with DIY is on the wane.

At first glance, UK results represent a marked improvement. However, the strong sales figures are more a function of a scorching summer than any underlying progress. Strip out the impact of summer items like barbeques and garden furniture, and sales, which headed south over the winter, have continued to fall. That’s quashed any hopes that B&Q would benefit from the recent problems at Homebase.

With the French retail-facing business also selling less than this time last year, there’s not much encouragement from the other side of the Channel either.

There are a few crumbs of comfort though. Trade-focused operations Brico Dépôt and Screwfix continue to pull in more business, while management is confident margins will improve this year. But with profitability actually falling over the half, the pressure’s on the group to deliver from here on.”




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