Kingfisher update due on Thursday

On Thursday, Do it yourself retailer Kingfisher will be giving a sales update covering the fourth quarter, and, unlike in the third quarter, Matrix Group is not expecting any heroics from the group, but does “believe that Kingfisher has held the line in what has been a tricky market.”

Weather issues are likely to have hit Kingfisher in the fourth quarter, as they did many other retailers, and this may have led to delays in kitchen installations and the like.

“In the UK, consensus expects LFL [like for like] sales growth of just +0.1%, but it is worth remembering that the UK is just a third of group sales and profits and that UK weakness has likely been offset by a better performance in Poland. The Tradepoint rollout in the UK continues, and the company is seeing very encouraging performance from this new initiative,” Matrix Group analyst Tom Gadsby said.

Matrix is forecasting LFL sales in France will be up 1.8% on a year earlier, in line with the third quarter performance.

“We also expect decent performances from the group’s immature markets – Spain, Poland and Russia. China is still on target to break even by 2012, in our view, although LFLs will probably be down against very tough comparatives of +29% in Q4 last year, reflecting a big rebound in the housing market at that point. We do not expect an imminent decision on whether Kingfisher will remain in China, but if it does decide to withdraw, there is some £300m of freehold property that could boost an already healthy balance sheet,” Matrix notes.

Source : Sharecast