Thought I'd start my first ever moneyam.com thread:

Talk that Asda or Lowes might be considering a bid for the company.

KD.

if only mate. been in this stock for 12 mths. could do with a lift

Buy Kingfisher at 266.25p (16/11/2006)

Says Robert Sutherland-Smith of UK350.com
(Watch Robert Sutherland-Smith on telly this morning at 11am only on www.stockmarket-channel.tv)

Kingfisher (KGF) has under-performed many other shares over the last two years. The dramatic nature of this underperformance by Kingfisher is reflected in the extent to which it has done badly against FTSE 350 Index. Over the last two years that index has risen 30%. During the same time, Kingfisher has fallen 20%. That adds up to a relative under performance of some 50%. The major part of this absolute and relative underperformance of Kingfisher shares was from late 2004 to autumn 2005. The price has come up from a low of 196p last October, reaching its recent high point at 258p in March. Basically, for most of this year, the shares have done little more than trade between 220p and 260p or thereabouts. So this is a good time to examine its operations and investment fundamentals.

Having had a look at the company, I have come to the conclusion that the shares are a buy for a couple of reasons. First, because inevitably and understandably, the management is part way through a plan to improve things. Second, because the shares just look very good value in terms of asset and sales values. It is a company which seems ripe for acquisition by a private equity operator looking for a gap between the Groups present and potential value, and its current market capitalization.

But first, I remind you that Kingfisher is big commercial operation. Apart from the 323 B&Q stores it has in the UK, it has other businesses worldwide. It is in short, the UKs leading home improvement retailer and claims to be number three worldwide. It has 181 stores in France, 34 in Poland, 27 in Italy and 24 in other parts of Europe. Beyond the lands of the Euro it has 51 B&Q stores in the Republic of China and a further 21 in off shore Taiwan, making a total of 684 retail outlets worldwide and growing. So although the UK is still a large part of its activities, it is misleading to think of the company solely in terms of the current grim and gloomy conditions of our own dear home, do it yourself, market.

In fact, as the most recent published results (for the twenty nine weeks to the last 29 July) show that whilst the UK did poorly, other places were doing remarkably well in contrast. In that first half, sales rose 6.6% to 4.4 billion pounds. Underlying earnings per share declined 28% to 5.1p after making financial adjustments to show the true operating performance.

But that hides the contrast between the UK and other territories. In the UK retail sales rose 0.4% in absolute terms and fell 1.3% in like for like terms. In the rest of Europe excluding the UK and France, absolute sales rose 29.9% and like for like sales increased 8.4%. Even in France, actual reported sales improved 9% with a positive 1.2% rise in like for like turnover. In Asia sales jumped 85.9% which translates into a 10.4% leap in like for likes.

If the UK is the problem then the companys management has been working to put things right since 2005. That must obviously include becoming more price competitive. But is also includes other challenges: making store staff more serviceable by helping where help is needed most.; making sure that the range of products keep pace with changing demands and that they are readily available. In the first six months of the current year, the company had 28 product range reviews. Finally, there is a rolling programme of store refurbishment at a cost of 3.5 million pounds per store. The company judged it right to close 15 super stores. The aim of all this is to increase total turnover by 25%. On the business reform front in the UK there is already progress as evidenced by positive research conclusions about B&Q customer reaction to the changes.

For the current year it is estimated that will see a year on year decline in pre tax profits and underlying adjusted, earnings per share of around 8%. For the current year, earnings per share are estimated to be 11p (down from 11.9p last year) and dividend payout of 10.65p. Next year earnings per share are estimated to increase by 10% to 12.1p, with the dividend held at 10.65p, increasing dividend cover to 1.13 times.

Those estimates put Kingfisher shares on a forward estimated price to earnings multiples of 22 times and 20 times. The estimated prospective dividend yield is 4.4%. That, plus the slim dividend cover indicates the scope for earnings recovery potential.

But that is not my main basis for tipping the shares now. That is based on solidly embedded commercial and balance sheet value. The equity value of Kingfisher is capitalised by the market at 5.7 billion pounds. Sale revenue for this year is probably going to be in the region of 8.0 billion pounds rising to an estimated 8.6 billion pounds next year. The most recent balance sheet reveals equity assets of 6.1 billion pounds, of which, property and plant are shown as being worth 3.3 billion pounds. Any predator persuaded that this company has a more profitable future, would be tempted to buy it when it has sales worth 363p a share and shareholder funds worth 184p per share; particularly when most of that is in the shape of property and other tangible fixed assets worth a solid looking 135p a share. If you strip the tangible assets from the market capitalization, the estimated forwarded price earnings multiples given above, fall to an adjusted 12.2 and 11.1.

Kingfisher is what they call and asset play, with longer term recovery prospects in the UK, growth overseas and a good dividend yield of 4.4%. Those who suggest that Kingfisher is a takeover target have got a strong case for thinking that. In my opinion, bargain basement value. BUY.

Key Data

EPIC: KGF
Market: Main
Spread: 265 - 266.25p

Kingfisher downgraded
MoneyAM
Shares in Kingfisher have today been downgraded to 'sell' from 'hold' by Deutsche Bank.

This comes ahead of the retailer's third quarter results, due November 30th, which the broker thinks could lead to consensus estimate cuts.

In a research note to clients published this morning, Deutsche Bank noted that the shares have risen 13% in the last three months primarily due to hopes of a rapid recovery at its B&Q business, driven by re-formatting the B&Q Warehouses to deliver higher sales per square foot.

However, Deutsche Bank said that even if the reformats work and the UK DIY market recovers quicker than expected, the broker does not think B&Q's profits are likely to rebound as fast as the market expects.

It added that, due to around 20m of heavy pre-opening costs at B&Q that is not in its or market forecasts, the broker has cut its profit forecast for 2007-2008 to 470m from $494m.

The broker said Kingfisher's shares are ahead of events and it expects them to fall towards Deutsche Bank's new increased price target of 220p versus 215p previously as market profit forecasts are cut.

http://www.timesonline.co.uk/newspaper/0,,176-2471506,00.html

Kingfisher (LSE: KGF.L - news) closed 8.9 lower at 122.2 as JP Morgan cut the group to 'neutral' from 'overweight'.

JP Morgan said Kingfisher's B&Q unit faces major challenges in the first two quarters of 2008/2009 from the impact of the slowing housing market and adverse competition for showroom and seasonal, its two largest categories.

Kingfisher downgraded - Moneyam

HSBC has downgraded Kingfisher to neutral from overweight, cutting its price target to 145p from 200p.

In a note, the broker says that the retailer has had a UK overstocking problem and it said it has now also taken a more negative view on the speed of its upturn in China.

It leads the broker to cut its 2009-2010 forecasts by 14%, which it says drives its rating downgrade to 'neutral'.

Its lower price target of 145p reflects the peer group valuation, HSBC adds.

B&Q growth a boost for Kingfisher

Kingfisher gives a trading update on Thursday which could be the cue for another set of headlines about hard times on the High Street or it could prompt press articles about the stark difference in fortunes between the winners and the losers in the retail space; judging by its September update, Kingfisher is more likely to fall into the "winners" category, but a lot can change in two months

Kingfisher basks in autumn sunshine



{ 7:47, Thursday 1 December 2011

LONDON (Reuters) - Mild weather, market share gains and a drive to boost profit margins helped Kingfisher (Euronext: KFR.NX - news) , Europe (Chicago Options: ^REURUSD - news) 's biggest home improvements retailer, beat third-quarter earnings forecasts despite a tough economic backdrop.

The group, which runs B&Q in Britain as well as Castorama and Brico Depot in France, said on Thursday the short-term outlook for consumers in those markets remained challenging.

It was confident of coping, helped by a drive to improve profitability by buying more goods centrally, and directly, from cheaper manufacturing centres like China.

Many European retailers are struggling as disposable incomes are squeezed by rising prices, muted wages growth and austerity measures, and amid fears a euro zone debt crisis could plunge the region back into recession.

Kingfisher, which makes about 40 percent of its sales in both Britain and France, said retail profit rose 14 percent to 273 million pounds in the 13 weeks to October 29.

That compared with a forecast for 263 million pounds in a Reuters poll, and marked a slowdown from 18 percent growth in the first half.

Sales at stores open over a year rose 1.9 percent in France, broadly in line with expectations and down from 4.6 percent in the first half. Mild weather drove a strong rise in sales of outdoor products, with lawnmower sales up 17 percent.

Like-for-like sales on the same basis in Britain were down 0.9 percent, improving on a 1.8 percent decline in a first half disrupted by the closure of rival Focus DIY.

Garden furniture sales leapt 68 percent as Britons took advantage of autumn sunshine to make up for a wet summer.

Shares in Kingfisher, which runs around 900 stores in eight countries, have outperformed the STOXX Europe 600 retail index by 6 percent this year, They closed at 255.6 pence on Wednesday, valuing the business at about 6 billion pounds

We should have some trading news coming our way too, with Kingfisher the owner of B&Q and Screwfix -- giving us a fourth-quarter update on Thursday. Despite the retail hardships we've been experiencing, Kingfisher has been doing well, and rising profits for this year and next are expected.

On Thursday. Kingfisher is expected by broker Jefferies to give a solid second quarter update, despite the lousy weather recently. "A c.1% LFL [like-for-like] gain in both France and the UK should be taken well," the broker suggests. "We model for a broadly unchanged gross margin (reflecting range reviews and seasonal promotions in the UK, but sourcing progress in France) and strong cost control to allow for a broadly unchanged Q2 EBIT [second quarter earnings before interest and tax],"

Thursday has a retail theme with Kingfisher (Euronext: KFR.NX - news) , Halfords, Sports Direct (Frankfurt: A0MK5S - news) and Mothercare (LSE: MTC.L - news) all set to update the market. Do-it-yourself retailer Kingfisher is expected by broker Jefferies to give a solid second quarter update, despite the lousy weather recently. "A c.1% LFL [like-for-like] gain in both France and the UK should be taken well," the broker suggests. "We model for a broadly unchanged gross margin (reflecting range reviews and seasonal promotions in the UK, but sourcing progress in France) and strong cost control to allow for a broadly unchanged Q2 EBIT [second quarter earnings before interest and tax]," Jefferies says. The B&Q operations in the UK are tipped by Jefferies to show LFL growth of 0.7%, while Screwfix is seen increasing sales by 8%. In France, the broker is anticipating LFL gains of 1% at both Castorama and Brico. "Elsewhere internationally we expect softness in Poland (-2% LFL) and a tough China (-8% LFL given a shrinking property market), but strong progress in Russia and Turkey," the broker added.

Q1 Trading Update

Bank of America Merrill Lynch Neutral 355.10 355.10 290.00 375.00 Upgrades

Long KGF. Chart looks oversold and volume of buys to sells is convincing for the bull case. Fundys solid, plenty of cash. Self help scheme.

Q1 Trading Statement

European home improvement retailer Kingfisher on Wednesday said third quarter total sales rose 1.2% to £3.04bn in constant currency, while like-for-like sales were down 1.3% reflecting continued weak sales in its French Castorama business. The B&Q owner said it expected to grow gross margin after clearance in the UK, Poland and its Brico Dépôt unit France. "However the outlook for Castorama France is more uncertain given difficult trading and the ongoing impact of recent national demonstrations," the company said, adding that it was exiting Russia, Spain & Portugal to focus on markets "where we have, or can reach, a market leading position".