The shares of Kingfisher (LSE: KGF) slumped 5% to 376p this morning after the owner of Screwfix posted a mild increase in underlying third-quarter sales and profits.
Kingfisher, the world’s third largest home-improvement retail group, revealed its third-quarter sales had climbed just 1.4% on a like-for-like basis to £3bn. Similarly, the group’s total operating profits grew by only 1.7% at constant currency to £271m for the quarter.
Operating profits slipped by 6% in Euro terms in France, which represents Kingfisher’s biggest market in terms of both sales and profits. In the UK meanwhile, Screwfix enjoyed an 11% boost in like-for-like sales, helping to drive an 8% increase in operating profits for the region.
Commenting on the results, chief executive Ian Cheshire summarised:
“Following a mixed first half, we have seen growth in both sales and profits in our third quarter, one of our most significant trading periods in the year. Whilst we have delivered sales growth in each of our geographies our markets remain challenging, especially in France where consumer confidence is still weak and with no obvious signs of an imminent improvement.”
With a market cap of £9bn, Kingfisher is valued at 16 times its expected earnings, and offers a prospective dividend yield of 2.7%.
Of course, whether that valuation, today’s news and the prospects for the home-improvement industry combine to make Kingfisher a ‘buy’, is something only you can decide.
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> Mark owns no shares mentioned in this article.