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Good post Bbrink. Sums it up neatly. I wonder would anyone buy this? It is certainly unloved but the SP reflects this and has fallen a long way. Deep pockets would be required. Looks a cert to go in the December Ftse 100 shuffle but my limited understanding of these scenarios suggests that a drop to the Fste250 while iinitially triggering selling can actually be beneficial over time.
In my opinion the ex CEO has ruined the company and the directors should bow their heads in shame for allowing it to happen.
The good people started to leave years ago when wages were decreased and staff bonuses taken away. The final kick in the teeth (to shareholders & staff) was the removal of all design consultants; who were accepted by the competition with open arms. Yes, amateurish short term money saving schemes which removes company stability and growth (and helps your competitors).
for investing in these,. Ok I am on the hook only for a small amount but after every update the SP gets hammered. I should have known the drill by now but I am not pouring any more money into these retail giants and will shop around around for a better investment. Today's horrible update is the final nail in the coffin for me. The chairman hasn't been there long but if he keeps this up I am sure he will be shown the door. At best it is one for the bottom drawer!
Just reached 90 on the Stockopedia rank list.
Given the share price AND currency movement since this original comment, KGF is becoming a potential bargain for a US vulture fund...
Josephine, the last sentence in your June Post was very encouraging !
I believe we should avoid rumours, of any type. Sometimes will ead to heartbreak when unfulfilled OR dismay when proved right and are thought of as a lost opportunity !
Looking forward to your next analysis or general comment. ----- Yours, Max.
The company is ripe for acquisition. Sum-of-the-part analysis shows that the firm is worth at least 2x current price. Private Equity investor rumoured to buy this firm at current cheap valuation with at least 30% premium. Currently trading at 5x EBITDA multiple, no debt and property value that is almost equal to market cap
Will Kingfisher announce a new CEO alongside its Q1 results next Wednesday?
Though it saw a 13% plunge in underlying pre-tax profit to £693 million, March’s full year report was really notable for the changes to the firm’s long-running ONE Kingfisher transformation plan. Forced to abandon the target of a sustainable £500 million annual profit uplift by FY 2020/21, stating that it ‘no longer reflects’ how the business is managed, CEO Veronique Laury was given the boot, though her leaving date wasn’t announced.
Any word on her successor may be the most sought-after piece of news on Wednesday. Beyond that, investors will specifically be looking for signs of improvement in Castorama given Kingfisher said it was ‘implementing a clear plan’ to turnaround the ailing brand. The progress of the extended rollout of Screwfix outlets in the UK and abroad will also be under the spotlight.
Read what Spreadex analysts have to say, or watch a 60 second preview, here: https://spreadex.com/?tid=391504
Actually to compare over 10 years is not a very useful thing to do because in 2009 most share prices were only just above rock bottom, after suffering large value losses due to the financial crisis in 2008/09.
However the general trends are fairly clear, a loss in equity value for many of the large UK retailers - this despite a relative fall in the value of Sterling, which from a bigger perspective, is the same as a currency devaluation (only a gradual one).
Also the fact the Bank of England switched interests rates to 0.5% and kept them that low for ten years has in effect devalued people's savings and transferred some of this value to people who had taken on irresponsibly high levels of debt ...seems rather unfair if you were planning to invest your savings but didn't think you should have to overpay for something just because someone else had borrowed an irresponsibly large amount to buy it before you could.
Trying to create a sense of balance to my posts as I try to be middle-of-the-road - hence why I think interest rates should be about 5% to create a level playing field between savers and borrowers. After all you shouldn't really be borrowing unless you are creating something which is definitely in demand by the economy...and therefore you should easily be able to pay back you debts plus interest at between 5-8%. If borrowers can't afford to pay down their borrowings after ten years of being able to borrow at 0.5% interest then really, over most of history, they would be looked upon as insolvent ... as if their products were really in demand by the economy they would have no trouble paying down their debts plus 5-8% interest per year.
Anyway, I suppose there hasn't been hyperinflation like in Argentina or Venezuela - something positive at least for people in the UK as hyperinflation generally leads to rioting and a great deal of chaos
https://www.bbc.co.uk/news/business-47636156
Carney said that 0.5% interest rates for ten years have done the economy a power of good (well also doubling the national debt, plus £430 billion in newly created money, QE).
Well all that creation of new money (at the expense of savers/pensioners/gilts) might have done the economy a power of good - except most share prices are now lower than ten years ago if you exclude companies which earn a portion of their revenues in foreign currencies (any company earning in dollars and paying dividends in pounds has seen a rising share price).
However, it is not Carney's brilliance or intellect which has boosted the economy - it is simply he has taken money from the gilt market, from savers, and from people holding Sterling and transferred some of that wealth to people holding bonds, to debtors, and to people holding foreign currency.
Seems strange to praise the Bank of England for making the UK poorer. Yet Carney has received a lot of praise in the media and very little criticism - just shows how corrupt and self-serving the 1% (who are already the richest) have become in my opinion.
Personally I think Carney should set out a public vision for the UK economy and the two political parties should debate it and say how they would adjust/modify that vision if they won the next election. Than at least at the next election people would know what they were voting on...they would know the direction of travel that the policy-makers had in mind for the UK. Under the current system everything is secret and very little of what is spouted in the manifestos of political parties is ever enacted at an economic level.
Zero surprises in the results today.
Positive dividend and CEO change at last.
Surely at some point they have to explicitly communicate to shareholders that the +£500 Million set out in their 5 year plan simply isn't going to happen!?
Will Kingfisher be screwed following Wednesday’s full year results?
The company hasn’t updated since November’s third quarter results. There it revealed that, while it had eked out a 0.2% increase in group revenue on a reported basis, Q3 like-for-likes were actually down1.3% due to a 0.7% drop in the UK and Ireland, and a 3.4% slide in its persistently troubled French division.
As for the full year, Kingfisher said that it expects to ‘grow gross margin after clearance in the UK, Poland and Brico Depot France’, but that the outlook for Castorama was ‘more uncertain given difficult trading’ and the impact of the ‘gilets jaunes’ demonstrations.
Read what Spreadex analysts have to say, or watch a 60 second earnings preview video, here: https://spreadex.com/?tid=388558
Final results should be out in just over a months time. Assuming performance is already built in to the current price, it will be interesting to see any directional movement between now and then indicating future plans.
Good to see a nice rise today. Hopefully this indicates oversold and the price will settle back around 240 for consolidation.
oldveryold,
as it happens I needed some cement today, B&Q were the only place open so they got my £5 instead of the local builders merch (£4). To be fair, there were quite a few trades there, maybe for the burger van though. The shares, although low are still a swerve for me; I got out at £3.60, which was one of my better moves this year. Possibly oversold now, these must be historical lows - something has to change
jam2morrow,
In the age of the internet, as far as product purchase is concerned, it's "if at first you don't succeed, go elsewhere". Immediacy is how you compete, especially on commodity products. If a firm is not visibly competitive, why would you invest?
On "The stores always seem to be overstaffed to me"... You must be better looking than me.
Can't comment on the state of affairs in other countries but I agree with what you say about uk. I am trade/diy and find Screwfix to be efficient and popular. B&Q are ok if you can get what you want at the store- but I will never order anything from them again. Lead times for delivery of 14 days are from last century. The stores always seem to be overstaffed to me. If the group can bring the SF efficiencies to the B&Q stores then the current share price will seem low. This is a cash rich company. If they sort out their distribution system instead of buying back their own shares then I will invest, but not before
`Sirious,
The reason I wanted to discuss this with shoppers was to avoid confusion about the criteria for judgement. I have a large portion of my capital invested in enterprises just like KGF and would be a shareholder if they got their act together. But Ive been waiting for a long time now. Shareholders have been told of the spreading effectiveness of rationalisation, but I have seen no evidence of that effect, whatsoever, except for some new branding of, frankly, rubbishy products. There is no distinction between B&Q, Bunnings, Homebase, Wickes or Bricomarche.
Where there IS a distinction is with Screwfix. All evidence is that Screwfix should be the model for rationalisation. The figures clearly speak for themselves. Try them out! Visit them!
And yet KGF perseveres with the B&Q/BricoDepot model, a model that should have boomed following the Westfarmers retreat. Clearly, after that, the writing is now on the wall for that pattern, and slim hopes for any form of satisfactory disposal of the KGF stores as a going concern. Drug on the Market or what?
I can't help noticing that your opinion finishes with the resounding uncertainty of a "might"
The Stock Market has many, many better opportunities. Trading costs are low and monitoring is easy. If there really is a turn-around, jump back on - a day or two will make little difference!
Thanks for your point of view, although your last comment made me smile as to respond, we have to qualify as customers yet you don't have to qualify as a shareholder!
You make some valid points about customer experience and quality assurance. However, B&Q has been around for a long time and I think customers are wise enough to know what we're getting when we visit a store.
On the plus side, rationalising the global organisation might hurt in the short term, but should realise benefits in a few years time. Investing decisions are entirely personal as are your goals and this is definitely a long term investment, not an income earner.
You may be right that we have not reached the bottom, Brexit uncertainty is affecting the whole market, but DIY might become a very relevant sector come April.
Time will tell.
I am not a KGF shareholder but I rely on the Market for my income. Neither am I a spoiler but you may find interest in my point of view. I live between homes in France and England and I am an avid DIYer. When I look for investments, I want to see, naturally, all the right numbers but also clear evidence of a strong, well-run, ethical business with no hint of trip-wires - so no on-line betting, gold mines, tobacco, miracle cures etc.
The four major parts of KGF impress me as follows: BricoDepot is omnipresent in France and widely detested. The staff are sullen, unavailable and unknowledgeable. I have seen 80 year old customers struggling with dangerous loads and fork-lift trucks driven through un-cordoned public access areas. The quality of goods is frequently appalling. Despite online stock figures, items prove impossible to find. Check-outs are impossibly slow by UK standards. The stores are generally uninviting.(subjectively) The upside is that where items are from reputable manufacturers, the prices are excellent.
B&Q is broadly the same in terms of quality of goods; whole categories bought from low-grade manufacturers with absolutely no evidence of quality-control or, indeed product knowledge on the part of KGF. Staff are friendlier but sometimes hard to find.
Screwfix have friendly, knowledgeable, helpful, cheerful staff. Service is prompt. There is a wider choice of products from the cheap to the luxury. Pre- ordering has never let me down. Communication is 100%. Access to the branches is not always convenient but the delivery service is as fast as humanly possible.
Castorama has nothing to attract me or my wife, who is French, or her family. It's just dull.
I follow the KGF market reports fairly consistently. The roll-out of X-year plans and so forth, over the, now, 20 years that I have shopped on both sides of The Channel, has had no impact on my impression as a purchaser.
Summary: 3/4 of this firm sucks. Screwfix rocks. Year to year there is no change. Put these factors against the charts, the outcome is clear. BOTTOM OUT?? YOU WISH!
Please, if you respond to this post, qualify yourself as a KGF customer as well as a shareholder.
i second that sirious it does look like it's nearing the bottom...
Spoke too soon!
Just joined KGF at what I hope to be the bottom!
Morning Luke. You seem to be proving right today on the early evidence. We shall see though. The french results were very disappointing and he retail environment is pretty poor. Today might only be a temporary up. I do hold these and may average down at some stage but would prefer to see some evidence it has bottomed out first.
I think you'll be waiting for a while. If you haven't bought in already I'd do so quickly, that chart today looks bottomed out. The SP will recover. Just the big boys making some big bucks. Annoyingly I short sold and bought back in last night, wish I had waited a day. As a tradesperson who uses Screwfix and see's how busy the stores are I have no worries. If B&Q and Homebase are failing its only because Kingfisher is tempting its own buyers into Screwfix instead. It was only a slump in profits, they are still turning a big profit :) Don't sit on the fence too long.