Kingfisher Shares Surge: Upgrades Full-Year Profit Guidance After Strong First Half

Kingfisher (LON: KGF), the parent company of B&Q and Screwfix, reported robust half-year results, leading to an upgraded full-year profit and free cash flow guidance.

The company’s performance reflects effective strategic execution and resilient consumer demand in key markets, sending its shares more than 18% higher on Tuesday.

Sales reached £6.81 billion, a 0.8% increase compared to £6.76 billion in the prior year. Gross profit rose by 3.6% to £2.57 billion, with a gross margin improvement of 100 basis points to 37.7%. Adjusted pre-tax profit (PBT) surged by 10.2% to £368 million, translating to an adjusted basic EPS of 15.3p, a 16.5% increase.

Kingfisher's strong cash generation is evident in the £478 million of free cash flow, a 13.5% increase year-over-year. The company's net debt position improved to £(1.73) billion, compared to £(1.95) billion in the previous year, providing increased financial flexibility. The interim dividend remains unchanged at 3.80p per share.

The company's strategic initiatives, particularly in trade and e-commerce, drove market share gains in the UK, France, and Spain. Trade sales grew by 11.9%, now representing 28.0% of group sales, while e-commerce sales increased by 11.1%, reaching 20.0% penetration.

Driver Breakdown:

• Trade Focus: Enhanced trade propositions across banners driving significant sales growth.
• E-commerce Expansion: Marketplace growth and app enhancements boosting digital sales.
• Margin Improvement: Leveraging scale and cost initiatives contributing to higher profitability.

Thierry Garnier, Chief Executive Officer, stated, “We delivered a strong first half with high quality underlying like-for-like sales growth of 1.9%, driven by increased volumes and transactions… Combined with our H1 performance, this gives us the confidence to upgrade our full year profit and free cash flow guidance and to accelerate our share buyback programme.”

Kingfisher now anticipates full-year adjusted PBT at the upper end of its previously guided range of approximately £480 million to £540 million and has raised its free cash flow guidance to between £480 million and £520 million, up from the previous range of £420 million to £480 million. The company is also accelerating its share buyback program, aiming to complete the current £300 million program by March 2026.