Kingfisher shares dive 22% as European stores face closures

Kingfisher PLC (LON:KGF) have told the market that the coronavirus has not affected its’ trading in January – however the firm could see a bruising from ongoing restrictions in France and Spain.

Shares in Kingfisher trade at 106p (-22.20%). 16/3/20 11:19BST.

The firm commented: “We are committed to supporting local authorities and governments to limit the spread of the virus, and the health and safety of our colleagues and customers remains our top priority.

We have implemented a series of actions to protect the health and safety of our employees, including restricting travel and meetings, the adoption of flexible working arrangements for colleagues, and the recommendation to colleagues and customers to follow specific health protection protocols. Contingency plans have been drawn up to ensure continuity of customer service in stores and in head offices, including encouraging work from home where appropriate.”

Across February trading, the owner of B&Q said that like-for-like sales were 7.6% higher, which will please shareholders at a time where the macroeconomic environment has presented challenges.

In the first two weeks of March, the firm also noted that trading had been positive – with sales still maintaining their pace.

However, the firm said that all 221 of the company’s Castorama and Brico Depot stores were closed on France, starting Sunday, with this restriction expecting to last until April 14.

The former FTSE 100 listed firm also said that all stores in Spain had closed until March 29, following the government’s declaration of a two-week state of emergency.

Kingfisher said that their stores across the UK, Ireland, Poland, Romania, Portugal and Russia will remain open – unless these governments make a decision to put the state into a lockdown position.

The firm said that it is not able to fully assess the impact of the coronavirus, however its’ final results will be released on March 24.

Kingfisher concluded by adding: “There is significant uncertainty on sales and demand as the outbreak spreads, and as central governments and businesses take action to contain and delay its impact.

We are working to mitigate the implications of these closures, including via alternative routes to continue serving customers (e.g. via click & collect or home delivery).

Given recent government actions and the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19, we are not yet able to predict the impact of COVID-19 on our 2020/21 full year results.

Further updates will be given as soon as we have greater visibility on external developments and the impact on our trading.”

Kingfisher give disappointing November update

In November, the firm saw its’ shares in red following a disappointing trading update from the firm.

The former FTSE 100 listed firm said trading in the three months to October was “disappointing”, with sales falling 3.7% to £2.96 billion.

Like-for-like revenue slipped 3.7%. Kingfisher said this “reflects continuing disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in our main markets”.

B&Q sales sank 3.5% year on year to £820 million, slightly offset by an eight per cent rise in Screwfix sales to £477 million.

Last week, it was also noted that Kingfisher had slipped out of the FTSE 100 elite rankings. This reflects a tough time of trading for the firm, however Kingfisher will have to fully assess the impact of coronavirus on trading before making a statement to shareholders.

Previous articleRio Tinto’s progress in Mongolia slows down due to COVID-19 restrictions
Next articleTUI suspend ‘majority’ of operations