What All You Need To Know About the Kingfisher PLC Stock (KGF)?

  • Feb 18, 2019 GMT
  • Team Kalkine
What All You Need To Know About the Kingfisher PLC Stock (KGF)?

Company Overview

Kingfisher Plc (LSE: KGF) incorporated in the year 1982; headquartered in London, the United Kingdom, is a well-known supplier of home improvement products and services through a network of retail stores and online channels. The company trades at the London Stock Exchange and a part of the FTSE 100 index.

The company’s business operations are spread across ten countries having a customer base of around 6 million users. Total established stores are around 1,302 with a total headcount of about 79,000 employees.

The company business operations spread across the United Kingdom, Ireland, France and Other International geographical segments. The other segment consists of Spain, Poland, Russia, Germany, Romania, Portugal, and Turkey.

 

Key Management Team

  • Andy Cosslett, Chairman
  • Véronique Laury, Chief Executive Officer
  • Karen Witts, Chief Financial Officer

 

Key Brands

  • B&Q: UK's largest home improvement & garden centre retailer; number of employees - 16,717; stores - 296; over 40,000 plus products available in store.
  • Castorama: It offers all the things which required in making a better home and garden; the number of employees – 12,433; stores – 101; around 50,000 products available in store.
  • Brico Dépôt: It operates a low-cost format, offering customers the best quality-price ratio; the number of employees – 7,808; Stores – 123; around 10,500 products in the store.
  • Screwfix: The brand is the largest multi-channel supplier of plumbing, trade tools, electrical, Kitchens, and bathrooms in the United Kingdom; the number of employees - 7,938; Stores - 598; Store Products - 11,500.
  • Koçtaş: In Turkey, the home improvement retailer is the leader.

 

Market Analysis

  • The total worth of the European home improvement market is around £235 billion with a large customer base. There are substantial potential growth opportunities in this sector as currently, the company has only 5 per cent market share.

(Source: Company Website)

  • The UK and France are the two largest retail markets in Europe. With increasing consumer wealth and growth in the number of homes, consumer retail expenditure is more on home improvement products. Consumer debt is significantly higher in the UK as compared to France.
  • Kingfisher’s market brands presence in the UK and Ireland – “B&Q and Screwfix”.

      (Source: Company Website)

 

  • Market brands presence in France – “Castorama and Brico Dépôt”.
  • Market brands presence in Other International regions:

(Source: Company Website)

 

Key Financial Metrics – Q3 to 31st October 2018 (£ million)

(Source: Quarterly Report, Company Website)

 

Financial Commentary - Q3 2018/19

  • In Q3 FY 2019, revenue from UK & Ireland market surged by 1.4 per cent to £1,292 million as compared to last year same period; revenue from France market decreased by 3.9 per cent to £1,107 million, and revenue from other international market increased by 5.4 per cent to £649 million.
  • In Q3 FY 2019, total sales surged by 0.2 per cent to £3,048 million as compared to Q3 FY 2018 reported revenue.

Key Ratios

(Source: TR)

Ratios Commentary

  • Gross margin reported was 36.9 per cent in FY 2018, reflecting a decrease of 0.8 per cent when compared with last year data.
  • EBITDA margin of 8.5% for FY18 stood considerably lower than the industry median of 12.1 per cent.
  • Return on equity stood at 7.2 per cent which was remarkably lower than the industry median of 12.5 per cent.
  • At liquidity front, Kingfisher liquidity position was higher than the industry median of 1.13.
  • On leverage front, the debt-equity ratio was significantly lower as compared to the industry median, reflecting limited debt financing option implemented by the company.

Recent News

On 23rd January 2019, the Kingfisher, a home improvement retailer, has decided to phase-out from its own branded products three possibly harmful groups by 2025. As part of the company's Road Map, it also intends to extend the ban across its supply chain. The company, which owns B&Q and Screwfix, said the decision to end the use of phthalates, Perfluorinated & Polyfluorinated Chemicals (PFCs), and halogenated flame retardants based on internal analysis suggesting the chemicals are harmful either to human health or the environment.

 

Stock Information

 (Source: London Stock Exchange)

Stock Performance

  • On 15th February 2019, Kingfisher share closed at GBp 225.5, down by 3.05 per cent against its previous day closing price.
  • Stock's 52 weeks High and Low is GBp 364.40/GBp 202.70. At the closing price, the share was trading 38.12 per cent lower than its 52w High and 11.25 per cent higher than its 52w low.
  • From the previous three months, Kingfisher share price declined significantly by 7.88 per cent; FTSE 100 index return dipped by 10.41 per cent and sector performance was down by 7.17 per cent.
  • Stock’s average traded volume for 5 days was 5,067,913.60; 30 days – 6,008,062.43 and 90 days – 7,613,849.21.
  • On the valuation front, the stock was trading at a trailing twelve months PE multiple of 10.3x as compared to the industry median of 10.4x.
  • The company stock beta was 0.50, reflecting less volatility as compared to the benchmark index.
  • Total outstanding market capitalization was around £4.73 billion.

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