Today I’m taking a look at cluster of Footsie-listed headline makers.
DIY darling?
Retail giant Kingfisher (LSE: KGF) greeted the market with promising trading numbers on Tuesday, the business enjoying a “solid start to the year” and cheering the results of its five-year restructuring scheme.
The DIY specialist saw like-for-like sales rise 3.6% during February-April, it advised, driven by the tearaway success of its Screwfix tradesmen outlets — underlying sales here galloped 16.2% higher in the quarter.
Kingfisher still has a lot of work in front of it as B&Q store closures continue, while previous challenges in its critical French market could also resurface.
But with an anticipated 3% earnings rise for the year to January 2017 creating a decent P/E rating of 15.9 times, many investors will be tempted in by Kingfisher’s improving momentum at current share prices.
Food favourite
Food manufacturer Cranswick (LSE: CWK) also pleased investors with perky financials on Tuesday, the business reporting an 11% pre-tax profit surge in the year to March 2016, to £58.7m.
This was underpinned by a 6.6% revenues rise in the period, Cranswick noted, to £1.07bn, with volumes increasing 12%. The business reported solid growth across all eight of its major divisions, bar Cooked Meats.
Cranswick is clearly benefitting from a steady stream of product rollouts across its product catalogue, and shrewd acquisitions like that of poultry specialist Benson Park should keep sales heading higher.
The City expects Cranswick to record an 11% bottom-line upswing in fiscal 2017, resulting in a heady P/E rating of 19.8 times. Still, I reckon the firm’s terrific earnings record and solid growth outlook merits such a premium.
Car star
Breakdown specialist AA (LSE: AA) also made the news on Tuesday after confirming that it’s “exploring options in regards to its Irish business.”
The statement follows a report from The Sunday Times that Carlyle Cardinal was poised to launch a €160m bid for AA’s assets there. The sale could prove a canny one as AA’s revenues from Ireland continue to disappoint — they fell 3%, to £38m, in the period to January 2016.
Regardless, I believe the fruits of restructuring elsewhere, and particularly improvements to its digital presence, make AA a great pick for long-term investors. And a 4% earnings rise for fiscal 2017 leaves the business dealing on a tasty P/E rating of just 11.6 times.
Bright spark
Emergency plumbing and electricity services play Homeserve (LSE: HSV) also furnished the market with strong financials on Tuesday, the company reporting an 8% pre-tax profit boost — to £82.6m — in the 12 months to March 2016.
As well as enjoying strong demand in the UK, Homeserve’s expansion scheme in the US is paying off handsomely, the company adding an extra 700,000 clients across the Pond. As a result, group revenues rose 8% in the period to £633.2m.
With the City expecting takings in North America to keep surging, Homeserve is predicted to deliver a 6% earnings rise in the current year, producing a P/E rating of 17.6 times. I believe this is great value given the firm’s terrific potential in the US and Europe.
