Kingfisher (KGF) H1 26/27 earnings summary

Executive summary

• Sales including marketplace GMS grew 1.6% year-over-year, with strong momentum in trade, e-commerce, and Screwfix, and underlying LFL sales up 0.3% driven by higher customer transactions.

• Adjusted profit before tax rose 9.9% to £404m, supported by gross margin expansion and disciplined cost control.

• Upgraded full-year guidance for adjusted PBT to £595m–£635m and free cash flow to £480m–£520m, reflecting confidence in strategic execution.

• Strategic priorities in trade, digital, exclusive brands, and format growth are delivering tangible results and market share gains.

• Strong free cash flow generation and continued attractive shareholder returns.

Financial highlights

• Adjusted EPS increased 16% year-over-year to 17.8p, supported by profit growth and share buybacks.

• Free cash flow reached £339m; net leverage at 1.4x, maintaining a healthy balance sheet.

• Gross margin improved by 70bps to 38.4%, adding £40m, aided by buying scale, marketplace, FX, and Romania disposal.

• Structural cost reductions delivered £44m, offsetting £48m in operating cost inflation.

• Interim dividend of 3.8p per share announced; £333m returned to shareholders via dividends and buybacks.

Outlook and guidance

• Upgraded adjusted PBT guidance to £595m–£635m (previously £565m–£625m); free cash flow guidance raised to £480m–£520m (previously £450m–£510m).

• Capex expected at c.£400m; adjusted effective tax rate at c.26%.

• Ongoing £300m share buyback, with £125m completed and a third tranche of £50m commencing.

• Assumptions for H2 remain unchanged, with continued focus on margin and cost discipline.

• Guidance reflects confidence in continued delivery, barring unforeseen events.