Kingfisher lifts guidance on strong first half

(Sharecast News) - DIY retailer Kingfisher lifted its full-year profit guidance on Tuesday, despite weaker consumer sentiment, following strong interim trading. Sales at the owner of B&Q and Screwfix rose by 0.8%, or by 1.9% on a like-for-like basis, to £6.8bn in the six months to 31 July, driven by both increased volumes and transactions.

Operating profits rose by 2.1% to £383m, while pre-tax profits were 4.1% higher at £338m.

The blue chip flagged a "strong" performance in the UK, with like-for-like sales up 4.4% at B&Q and 3% at Screwfix.

That helped offset a weaker performance overseas. In France, where Kingfisher owns Castorama and Brico Depot, like-for-like sales fell 2.1% to £2bn.

However, Kingfisher said its medium-term profit margin target for the country - of between 5% to 7% - remained in on track.

Thierry Garnier, chief executive, said: "We were encouraged by underlying quarter-on-quarter growth in our core categories, and a third consecutive quarter of growth in big ticket sales.

"Our expectations for our markets for the year remain consistent with what we outlined in March, while mindful of mixed consumer sentiment and political uncertainty.

"Combined with our first-half performance, this gives us the confidence to upgrade our full-year profit and fresh cash flow guidance, and to accelerate our share buyback back programme."

The group is now forecasting adjusted pre-tax profits to come in at the upper end of guidance for between £480m and £540m.

Free cash flow guidance was boosted to between £480m and £520m, from a previous range of between £420m and £480m.