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DIY and home improvement retailer, Kingfisher plc (LON:KGF), announced ion Monday that it would return all of the UK and Republic of Ireland business rates relief received as a result of the COVID crisis.
The news followed an earlier announcement by the company that it had repaid the full £23 million it received under the UK Government’s Job Retention Scheme. Kingfisher said it: “benefited from, and was thankful for, the financial support measures it received from the UK and Irish governments which, together with our own measures to reduce costs and preserve cash, helped us to protect jobs and limit the financial impact of COVID-19, in the face of significant uncertainty.”
Given the resilience of the company’s performance since lockdown, the company has since decided to return the UK and Republic of Ireland business rates relief. The company’s total business rates bill eligible for relief is around £130 million.
Following the announcement, the company now expects FY20/21 adjusted profit before tax will include around £85 million of non-recurring cost savings, net of any one-off COVID-related costs.
Kingfisher CEO, Thierry Garnier, said that government support had been invaluable. He added: “We also took swift action within our business in response to the pandemic to protect Kingfisher. We rapidly adapted our operations, both online and in-store, to fulfil the essential needs of our customers. We made significant investments to ensure the safety of our customers and teams, taking important steps to strengthen our balance sheet and limit the financial impact of COVID-19.”
“These actions, combined with the roll-out of our new strategy and the hard work of our colleagues and teams, have delivered growth throughout the Group and led to the hiring of 3,500 additional colleagues. Given this resilience, and our commitment to support our communities, we believe that returning the UK and Irish business rates relief in full is the right thing to do.”
Following the update, the company’s shares were relatively level, down by around 0.26%, to 268.10p per share 07/12/20 12:00 GMT. This price is around 2.36% ahead of analysts’ target price of 261.78p, but 18.55% ahead of its post-pandemic high of 321.40p.
Analysts currently have a Hold stance on Kingfisher stock, and a 59.97% ‘underperform’ rating from the Marketbeat community. The stock has a p/e ratio of 36.86, and a 6.33% dividend yield.