Source: Sharecast
The company on Tuesday said it now expected adjusted pre-tax profit of £510-550m, up from £490-550m. Reported pre-tax profit for the six months to July 31 rose 2.3% to £324m. Shares in the company were up 6% in London trade.
Like-for-like sales fell 2.4%, while total sales were down 1.8% to £6.75bn. Kingfisher also upgraded its free cash flow range to £410-460m from £350-£410m and said in the weeks since the end of the reporting period, like for like sales overall were down by 0.3%, as a wet UK summer impacted home DIY projects.
"Trading overall in the first half was in line with our expectations. This was underpinned by customers continuing to repair, maintain and renovate their existing homes, driving resilient volume trends in our core product categories, said chief executive Thierry Garnier.
“As expected, demand for 'big-ticket' categories has remained weak, in line with the broader market, while seasonal category sales trends have improved since early July. Against this backdrop we maintained a strong focus on effectively managing our costs and inventory.”
The company, which owns Brico Depot and Castorama in France along with Screwfix in the UK, said French sales fell 7.2% year on year, citing a soft consumer backdrop, with sales of big-ticket items down 6.8%.
Interactive Investor analyst Richard Hunter said the results "reveal once more that it is fairly clear where the repair work needs to be done".
"France accounts for 31% of group sales yet only 16% of profits, following a drop of 34% compared to the previous year...although the pressure on Castorama has been in evidence for some time."
"The warm reaction to the numbers represents something of a round of applause and adds to a share price which had already seen an increase of 23% over the last year, as compared to a hike of 7.4% for the wider FTSE100. Even so, the shares remain down by 21% over the last three years which reflects that the company remains a work in progress despite the advances it has made."
"In terms of the market consensus, the general view of the shares as a hold could conceivably come under some positive pressure should investors recognise an improving direction of travel.”
Reporting by Frank Prenesti for Sharecast.com