Shares digital

Kingfisher (KGF) - Finals PTP: £386m (£397m) Divi: 7.2p (10.6p)

Full-year figures were predictably poor and the final divi was also halved. This was the third year of falling profitability. It is unlikely to be the last.

These results bore a £22 million restructuring charge for the Chinese operations. There will be a further £11 million charge in 2008/09. The Chinese business is now entering a 'period of consolidation' which may involve store closures.

The international star is the Polish company which, enjoyed 'strong growth' and opened seven new stores. Nick Bubb of Pali International believes that soon the group will make more money in Poland than it does through B&Q.

Last year the group exited Taiwan. The new CEO Ian Cheshire has indicated there are no sacred cows. This may presage a withdrawal from Italy and Germany where the market is 'weak'.

In France profits increased by 15% to £237 million. while profits in the UK fell by 16%. The decline in the UK mainly reflected two one-offs, which cost £29 million. However, analysts are not expecting an early recovery in the UK.

The group has indicated that it will halve the interim dividend to 1.9p. The rebased dividend provides a yield of 4.1% at 128p.

Historically the group was regarded as a potential target for Home Depot of the US. That is unlikely in the short term.

Shares says: A PE of just over 11 makes the shares still vulnerable to further weakness.

The writer holds shares in this company

by: John Marshall