A refund driven beat, but there''s more going on Earlier this week, Kingfisher H1 Adj. PBT comfortably beat consensus, driven in part by a one-off business rates refund and the timing of cost saving initiatives. Management raised the bottom end of its full year profit guidance, and here we increase FY Jan-25e Adj. PBT by c.2% to the mid-point of the new guide. Kingfisher also upgraded its free cash flow forecast, accelerated its share buybacks and said that the macroeconomic environment is improving incrementally. France is likely to remain the key debate and we continue to think it will take time to fix, but we had underestimated the short squeeze and benefit from the thematic of falling rates. We remain Neutral but lift our target price. FY Jan-25e profits guided higher Management raised the lower end of its FY Jan-25e Adj. PBT range to GBP 510-550m (previously GBP 490-550m). Moving parts include a GBP 25m one-off repayment of UK business rates for BandQ but also greater losses in its Turkey JV. We raise our forecast to GBP 531m (was GBP 519m). Reasons to be a bit more optimistic Kingfisher reported solid Q3 current trading figures (Aug/Sep LFL group sales -0.3%) with a sequential improvement in France and UK. Management said it expects a gradual improvement in Poland, with markets remaining rational. We leave our Q3 sales expectations unchanged. Online marketplace is growing, and trade initiatives are developing. There''s not much evidence that the turnaround in France is yet gaining traction, but there''s more evidence that it can be capital light. Reiterate Neutral The outlook for rates and home improvement point to more optimistic assumptions and our DCF-derived target price rises to reflect these. There is still a material short interest base in the stock which could further unwind. Yet proof is still required about whether France can meaningfully recover over the next couple of years. We maintain our Neutral rating.