• Kingfisher said higher profits came as a result of UK and Poland sales growth whilst adjusted earnings also rose over full year period
• The company remains cautious on French operations and highlighted a continued element of uncertainty as a result of the Brexit vote
• The Share Centre recommends Kingfisher as a 'hold' and prefers Marks & Spencer for those interested in the General Retailer sector
As Kingfisher reports its full year results, Graham Spooner, investment research analyst at The Share Centre, explains what it could mean for investors.
"In its full year results released this morning, home improvement retailer Kingfisher reported full year adjusted pre-tax profits of £743m beating consensus estimates, which were driven by UK and Poland like-for-like sales growth. The company also said sales and adjusted earnings also rose over the period.
"Interested investors may want to note that there was an element of caution coming from the owner of B&Q and Screwfix this morning, particularly in regards to its French operations. Profits and sales continue to slip at its operations in the region and it highlighted that it remains cautious ahead of the country's elections.
"Kingfisher has proposed a final dividend of 7.15 pence per share, giving a full year dividend of 10.4 pence per share which is up 3% on the same period last year. The dividend coverage range remains between 2 and 2.5 times adjusted basic earnings.
"We continue to recommend Kingfisher as a 'hold' due to the good level of cash flow and the potential for the new strategy. However, progress may be held back by the slowdown in France and its worries over the uncertainty it expects in the UK economy.
"For those interested in the general retailer sector, our preference is Marks & Spencer as a result of the significant programme of change to alter the balance of its stores between food and clothing, and the healthy dividend."