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1. Company Snapshot

1.a. Company Description

Kingfisher plc, together with its subsidiaries, supplies home improvement products and services primarily in the United Kingdom, Ireland, France, and internationally.The company also offers property investment, finance, digital, sourcing and franchising, and IT services.It operates approximately 1,470 stores in eight countries across Europe under the B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint, and Koctas brands.


The company provides its products through various channels, such as home improvement specialist stores and e-commerce.Kingfisher plc was incorporated in 1982 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on KGF

Kingfisher's recent performance has been driven by strong H1 growth, lifted guidance, and a solid financial position. The company now expects adjusted pretax profit to be at the upper end of its guided range. Free cash flow rose 13.5% to £478m, while net debt fell to £1.7bn from £2bn. Additionally, a dividend of £0.038 per share will be paid. Analysts have adjusted their narratives, with a consensus price target increase from £2.90 to £3.00, reflecting cautious optimism about the retailer's resilience.

1.c. Company Highlights

2. Kingfisher's Strong H1 Results Driven by Strategic Growth Initiatives

Kingfisher reported revenue of GBP6.8 billion, with like-for-like sales up 1.9%. Adjusted profit before tax increased 10.2% to GBP368 million, and adjusted earnings per share rose 16.5% to 15.3p. The actual EPS came out at 0.151, beating estimates of 0.1293. The strong performance was driven by growth across all categories, with core products delivering improving sequential growth trends.

Publication Date: Sep -23

📋 Highlights
  • Revenue Growth: Hit GBP 6.8 billion with like-for-like sales up 1.9%
  • Adjusted Profit Rise: Surged 10.2% to GBP 368 million, EPS increased 16.5% to 15.3p
  • Trade Segment Expansion: Now 28% of group sales, with TradePoint at 22.4% of B&Q sales
  • E-Commerce Momentum: 93% of 1P orders picked in stores, marketplace driving high-margin growth
  • Share Buyback Acceleration: GBP 300 million program to be completed by March 2026

Operational Highlights

The company's focus on trade is evident in dedicated trade space within stores, improved product ranges, loyalty programs tailored to trade customers, and enhanced service offerings. Trade now represents 28% of group sales, with significant growth in TradePoint at B&Q, which reached 22.4% of total B&Q sales. The e-commerce strategy is centered on leveraging store assets for speed and convenience, with 93% of 1P orders picked in stores and 88% delivered through click & collect.

Financial Performance

The company reported a 100 basis point improvement in gross margin, driven by better buying, a more favorable banner mix, and less stock loss. While marketing costs are slightly higher this year, they remain around 2% of sales. The free cash flow guidance has been raised by GBP40 million, primarily due to its earlier peak in sales and working capital needs in the first half.

Valuation and Outlook

With a P/E Ratio of 28.72 and a Dividend Yield of 4.29%, the market is pricing in a certain level of growth. The company's guidance for full-year profit before tax has been raised to the upper end of the GBP480 million to GBP540 million range. The market outlooks remain unchanged, with low single-digit growth expected in the U.K. & Ireland, a flat to low-single-digit decline in France, and low single-digit decline to low single-digit growth in Poland.

Segment Performance

B&Q's improved free cash flow is driven by profits, including a tax refund and historical prepayment adjustments, and a 6-day reduction in inventory days. Castorama France is delivering positive results on sales and productivity, with short-term cost impacts in logistics and head office. The full profit impact from network rightsizing will take longer to materialize.

3. NewsRoom

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What Does Kingfisher plc's (LON:KGF) Share Price Indicate?

Nov -24

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AI shopping gains ground as UK consumers test automated buying

Nov -14

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Is FIGS (FIGS) Outperforming Other Retail-Wholesale Stocks This Year?

Nov -10

Source: zacks.com

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Kingfisher Metals Reports 110 Meters of 0.47 g/t Gold in ~500 m step-out at Hank and Extends Gold in Soil Anomaly at Hank on the HWY 37 Project, Golden Triangle, British Columbia

Nov -10

Source:

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How the Story Behind Kingfisher Is Shifting Amid Analyst Updates and Market Changes

Nov -08

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How the Narrative Around Kingfisher Is Shifting Amid Analyst Revisions and Market Uncertainty

Oct -25

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Is The TJX Companies (TJX) Stock Outpacing Its Retail-Wholesale Peers This Year?

Oct -24

Source: zacks.com

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UK retailer Kingfisher appoints new chief commercial officer

Oct -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Home Improvement Products and Services

Expected Growth: 2.0%

Kingfisher plc's Home Improvement Products and Services segment growth of 2.0% is driven by increasing demand for DIY and home renovation projects, fueled by rising homeownership and aging population. Additionally, the company's omnichannel strategy, investments in e-commerce, and focus on sustainable products are contributing to the growth.

7. Detailed Products

Home Improvement Products

Kingfisher plc offers a wide range of home improvement products, including building materials, decorative materials, and DIY products.

Gardening Products

Kingfisher plc provides a variety of gardening products, including plants, gardening tools, and outdoor furniture.

Kitchen and Bathroom Products

Kingfisher plc offers a range of kitchen and bathroom products, including fixtures, fittings, and appliances.

Decorative Products

Kingfisher plc provides a variety of decorative products, including paint, wallpaper, and decorative accessories.

Building Materials

Kingfisher plc offers a range of building materials, including timber, roofing, and insulation products.

Services

Kingfisher plc provides a range of services, including kitchen and bathroom design, installation, and maintenance.

8. Kingfisher plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Kingfisher plc, as a home improvement retailer, faces a moderate threat of substitutes. While there are alternative products and services available, the company's strong brand presence and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

Kingfisher plc's customers have relatively low bargaining power due to the company's diversified product offerings and strong brand presence. This limits the ability of customers to negotiate prices or demand customized products.

Bargaining Power Of Suppliers

Kingfisher plc's suppliers have moderate bargaining power due to the company's dependence on a few large suppliers for certain products. However, the company's scale and purchasing power help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is relatively low for Kingfisher plc due to the high barriers to entry in the home improvement retail market. New entrants would need significant resources and scale to compete with established players like Kingfisher.

Intensity Of Rivalry

The home improvement retail market is highly competitive, with several established players competing for market share. Kingfisher plc faces intense rivalry from competitors like Homebase, Wickes, and online retailers like Amazon.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.71%
Debt Cost 7.39%
Equity Weight 93.29%
Equity Cost 8.88%
WACC 8.78%
Leverage 7.19%

11. Quality Control: Kingfisher plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Wickes

A-Score: 6.1/10

Value: 6.1

Growth: 4.1

Quality: 3.3

Yield: 8.8

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

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DS Smith

A-Score: 5.7/10

Value: 8.3

Growth: 3.7

Quality: 3.8

Yield: 4.4

Momentum: 8.0

Volatility: 6.0

1-Year Total Return ->

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NEXT

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Kingfisher

A-Score: 5.4/10

Value: 7.2

Growth: 4.7

Quality: 3.9

Yield: 7.5

Momentum: 4.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Taylor Wimpey

A-Score: 4.7/10

Value: 4.4

Growth: 1.6

Quality: 5.1

Yield: 8.8

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.12$

Current Price

3.12$

Potential

-0.00%

Expected Cash-Flows