DAVY VIEW

Kingfisher’s interim results highlight, not that this is in any way needed, the challenges facing incoming CEO Thierry Garnier (H1 underlying pre-tax profits down 6% year-on-year (yoy)). He will inherit a business that is attempting a complex transformation at a time when the DIY industry is grappling with massive structural upheaval. It is clear that the job to reboot Kingfisher remains a huge task. While first-half profits were better than forecast, our initial reaction is that we are likely to trim our underlying full year pre-tax profit forecast by 2-3%. We believe the uncertain outlook for the group will continue to weigh on a share price that has been anchored around the 200p level.