ii view: Kingfisher uses self-help to battle economic headwinds

Full-year results to 31 December

• Revenues up 1.3% to £12.95 billion
• Adjusted pre-tax profit up 6% to £560 million
• Net debt including lease liabilities down 7% to £1.89 billion
• Final dividend of 8.6p per share
• Total dividend for the year unchanged at 12.4p per share

Guidance:

• Expects adjusted pre-tax profits for the current financial year of between £565 million and £625 million
• Plans a £300 million share buyback programme

Chief executive Thierry Garnier said:

"We have continued to execute our strategy at pace and delivered good margin and cost discipline. 

“With a mixed consumer environment across our markets, we continue to focus on delivering our strategic priorities, maintaining cost discipline and driving shareholder returns. This positions us well to capitalise on the attractive long-term structural growth opportunities within our markets."   

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ii round-up:

Kingfisher (LSE:KGF) is an international home improvement retailer operating across seven European countries including the UK, Ireland, France, and Poland.

The retailer operates almost 1,700 stores and excluding the group’s 50:50 joint venture in Turkey. Kingfisher brands include B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint and Koçtaş in Turkey.

For a round-up of these latest results announced on 24 March, please click here.

ii view:

Opening the first UK B&Q store in 1969, Kingfisher is today a constituent of the FTSE 100 index. Geographically, the UK and Ireland generated most sales in 2025 at 52%. That was followed by France at 30%, Poland 14%, and other countries the balance of 4%. The retailer’s rivals include Wickes Group (LSE:WIX), Howden Joinery Group (LSE:HWDN) even B&M European Value Retail (LSE:BME) and Dunelm Group (LSE:DNLM).

Management categorises product sales into three areas: Repair, Maintenance and Renovation, or core sales, accounted for 67% of revenues over past year; Big-Ticket sales including items such as kitchens at 15%; Seasonal sales encompassing products such as garden furniture the balance of 18%. Group strategic focus includes developing its trade business, speeding-up and increasing online sales, rolling out compact store formats, and expanding sales of higher profit margin Own Exclusive Brand products.   

For investors, a war in the Middle East and soaring energy prices now combine with inflation risk and higher for longer interest rates. Like-for-like French and Polish sales retreated over this latest financial year before latest events in the Middle East. Group operating costs, including staff wage increases and higher business rates, rose 7.3% year-over-year.  A forecast price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap, while big ticket and seasonal sales offer exposure to cyclical housing markets and unpredictable weather. 

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On the upside, management self-help initiatives have helped grow areas like trade and online sales. Market share gains have helped push UK like-for-like store sales up 3.3%. An ongoing pursuit of cost savings saw group finance costs decline over the past year, while more than one billion annual visits across Kingfisher’s digital channels are offering opportunity for AI enhancements such as product recommendations.   

In all, the tough economic outlook including elevated inflation and potentially higher for longer interest rates generate caution. That said, ongoing management initiatives and dividend yield of around 4% following the recent share price fall, may keep investors interested.  

Positives: 

• Diversity of geographical locations and brand names
• Attractive dividend yield (not guaranteed)

Negatives:

• Uncertain economic outlook
• The weather can impact performance

The average rating of stock market analysts:

Hold