(Alliance News) - Moody's Investors Service on Friday affirmed retailer Kingfisher PLC's (P)Baa2 long term senior unsecured ratings, P-2 commercial paper and (P)P-2 other short term ratings.
The outlook has been changed to stable from negative.
Moody's said the rating action follows the publication last month of Kingfisher's preliminary results for the year to the end of January, which were "strong", and also reflects Moody's expectation that the company will maintain good trading momentum and sustain credit metrics commensurate with its Baa2 rating.
The stable outlook, meanwhile, reflects Moody's expectation that Kingfisher will maintain positive trading momentum, broadly stable profit margins, conservative financial policies, and strong liquidity.
"In contrast to our initial concerns just over a year ago that Kingfisher's credit quality could have been negatively impacted by coronavirus, the company performed strongly in 2020. It successfully met increased demand for do-it-yourself products driven by changes to consumers' lifestyles brought about by the pandemic, and its higher profitability has led to stronger credit metrics than seen before it," said David Beadle, a Moody's vice president.
"We expect the company to sustain solid financial performance over at least the next 18 months, so a stable rating outlook is now appropriate," Beadle added.
Kingfisher shares closed 1.3% higher in London on Friday at 342.62 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Kingfisher (KGF)