Kingfisher Flies 19% Higher As Profits Estimates Hiked

Core Viewpoint - Kingfisher's shares increased significantly following a strong first-half trading update, leading to an upgrade in full-year profit forecasts [2][8] Financial Performance - Total sales reached £6.8 billion for the six months ending in July, reflecting a year-on-year increase of 0.8% and a like-for-like growth of 1.3% [2] - Gross margins improved by 100 basis points to 37.7%, resulting in a 2.1% increase in operating profit to £383 million [3] - Pre-tax profit rose by 4.1% year-on-year to £338 million [3] - Free cash flow increased by 13.5% to £478 million, contributing to a reduction in net debt from £2 billion to £1.7 billion [3] Regional Performance - In the UK and Ireland, sales grew by 4.5% to £3.5 billion, with like-for-like sales up by 3.9% [4] - B&Q outlets saw a 4.4% increase in like-for-like revenues to £2.2 billion, while Screwfix sales improved by 3% [5] - France experienced a decline in first-half sales by 2.4% to £2 billion, with like-for-like sales down by 2.1% [5] - In Poland, reported sales rose by 0.5% to £946 million, but like-for-like sales fell by 2.1% [6] - Combined sales in Spain and Portugal increased by 9.6% to £219 million [6] Strategic Outlook - The company raised its full-year profit estimates, now projecting pre-tax profit at the upper end of £480 million to £540 million [8] - Free cash flow expectations were also increased to £480 million to £520 million, up from previous estimates [8] - Kingfisher plans to accelerate its £300 million share buyback program, expected to be completed by March [8] Management Commentary - CEO Thierry Garnier highlighted strong first-half performance driven by increased volumes and transactions, with positive quarter-on-quarter growth in core categories [7] - Despite mixed consumer confidence and political uncertainty, the market outlook remains unchanged [7] - Analyst Adam Vettese noted commendable operational execution in a challenging retail environment, with solid progress at B&Q and Screwfix [9]