Barclays has maintained a positive view of Kingfisher PLC (LSE:KGF) shares despite the B&Q owner posting substantially lower revenues and earnings in the 2023 financial year.
The FTSE 100 group’s pre-tax profit fell 22.3% to £475 million with like-for-like sales decreasing 3.1% year-over-year to just under £13 billion.
Barclays analysts said today's results were broadly in line with consensus, while management’s plan to improve French profitability is “welcome, but may take some time”.
France was an especially lacklustre segment for Kingfisher, with potential job cuts on the way under a new plan to “simplify French organisation and significantly improve performance and profitability of Castorama”.
French EBIT margins were just 3.3% compared to 8.7% in the UK and Ireland, but Kingfisher is guiding to somewhere between 5-7% over three to five years.
Kingfisher hopes a plan to franchise some Castorama stores will help with margin recovery.
Alongside an 'overweight' rating, Barclays has a 300p price target on the stock, suggesting a 29% upside to the current price of 232p, having dipped half a percentage point this morning.