Shareholders: they're a fickle bunch. Do badly and they'll be off like a shot. Do well and they're still not impressed. This morning B&Q and Screwfix parent company Kingfisher posted first quarter results showing a 10% rise in like-for-like sales in the UK and Ireland, while retail profits rose 19% to £142m. Total group sales rose by 6% to £2.78bn.
Investors, though, were having none of it: they'd expected that figure to be closer to £145m. According Jefferies analysts, they're also not happy with its 'over-egged' promotions (Kingfisher itself admitted there had been 'more promotionally-led [kitchen, bathroom and bedroom] sales' than last year), which have dented profit margins by 2%.
And even chief executive Sir Ian Cheshire admitted on this morning’s Today programme that things across the Channel aren’t entirely as he’d hope. ‘If I were running a UK-only business, I’d be happy,’ he said. Those figures are, admittedly, not enamouring: sales in France dropped 0.2% to £1.07bn, although in Poland that figure leapt 12.9% to £260m.
The other problem is that the company was coming from a low base: remember last spring, when it snowed half the time and rained for the rest? Investors had presumably hoped for a more spectacular recovery, particularly given the glorious sunshine we’ve experienced over the past few weeks.
Cheshire chose to see the brighter side of the situation: ‘we have made a strong start to the year,’ he said, before adding that ‘we will annualise stronger figures in our second quarter and so, as ever, we will look to the first half results to properly assess our underlying performance’. As Robert De Niro once said: annualise that.