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Kingfisher says profit will beat forecasts

Kingfisher says profit will beat forecasts
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First Published: Tue, Sep 08 2009. 02 29 PM IST
Updated: Tue, Sep 08 2009. 02 29 PM IST
London: Europe’s biggest home improvement retailer, Kingfisher, forecast better-than-expected first-half profit, sending its shares to a two-year high.
The group, which trades as B&Q in Britain and Castorama in France, said on Tuesday it expected to report an underlying pretax profit of 285-290 million pounds ($468-$476 million) for the six months to 1 August.
That compared to analysts’ consensus forecast of 268 million pounds, and 214 million pounds made in the 2008 period.
Kingfisher forecast a retail profit of 345-350 million pounds, made up to 148 million in Britain and Ireland, 146 million in France and 53 million in its Other International division. The results will be published on 17 September.
“We expect market consensus profit estimates for 2009-10 to move into the 460-470 million pounds range, an increase of around 8%,” said analysts at Credit Suisse, Kingfisher’s joint house broker.
They said the firm was benefiting from favourable weather patterns, capacity withdrawal and cost containment in Britain, better-than-expected margins in France and the continued resilience of the Polish market.
“Continuing favourable trading conditions suggest we may not be at the end of the upgrades,” they said.
After earlier hitting a high of 230 pence, shares in Kingfisher were up 6.5 pence, or 3%, at 223.1 pence at 0754 GMT, valuing the business at 5.14 billion pounds.
The stock has risen nearly 60% over the past year, outperforming the DJ Stoxx European retail index by 48%.
Kingfisher’s performance may increase hopes of a rapid recovery from recession. These have risen over the last month as a raft of retailers have reported better-than-expected trading.
However, the company’s trading statement was published as the British Retail Consortium said sales fell on the year last month for the first time since May.
The group, which trades from over 820 stores in eight countries, released first-half numbers nine days ahead of schedule after the inadvertent release of some figures on Monday.
“It has come to our attention that, due to an administrative error, some draft figures were circulated externally on the afternoon of 7 September,” it said.
“Whilst the numbers have not yet been formally approved, Kingfisher recognises its regulatory responsibilities.”
Analysts said information relating to the first-half results was buried in material e-mailed to them by the firm on Monday.
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First Published: Tue, Sep 08 2009. 02 29 PM IST