Gross margins increase 40bps during the period Kingfisher has published interim results (Jan year-end) reporting an Adjusted PBT of £334m, a beat on our forecast of £261m and indeed consensus at £286m. We do however note, the Kingfisher outturn includes the impact of £25m of business rates refunds at B&Q. In terms of the key highlights: i) Lfl sales at a Group level in H1 came in at-2.4% (-0.9% Q1/-3.8% in Q2) broadly in line with consensus at -2% but a touch below our forecast of -1.1%. Management notes that the sales performance was in line with expectations supported by market share gains in the UK and Poland whilst France performed broadly in line with the market. It is noted that lfl sales in Q3 thus far (July 28th to date) have improved to -0.3%; ii) Kingfisher managed gross margins well during the period, +40bps yoy (consensus at +10bps), with “good management of product costs & retail prices; lower clearance costs and stock provisions” noted; iii) Supported by the one-off £25m of business rates refunds at B&Q, the Group has increased the lower end of its Adjusted FY25 PBT guidance range to £510-550m (previously c.£490m to £550m) and we note that it has maintained the upper-end of the guidance range despite the expected FY net loss in Turkey of c.£25m (vs FY24 £1m net loss and cons of a c.£4m net loss). The Group has increased its FCF guidance more significantly, it is now guiding for an outturn of £410-460m (previously c.£350m to £400m). France remains difficult but performance now in line with mkt In terms of the divisional detail: i) LFL sales in the UK and Ireland came in at -0.2% driven by another positive performance in Screwfix (+1.2%), offset by a negative outturn in B&Q (-1%). It is of note that within B&Q, TradePoint continues the perform well with lfl sales up +7.1%; ii) France remains challenging with lfl sales down -7.2% with both Castorama (-7.7%) and Brico Depot (-6.8%) under pressure although importantly both performing in line with the broader market according to management; iii) Lfl sales in Poland came in at -0.2% with the Group noting that it saw an improving customer environment supported by trade. We expect to increase our FY25 forecast to £520m from £490m Overall this is a robust performance from Kingfisher. Although it is clear that the sales environment remains challenging, it has managed gross margins well during the period and its cost savings initiatives are coming to fore. We expect to increase our FY25 PBT forecast from £490m to c.£520m, primarily reflecting the better H1 (largely driven by the £25m of business rates refunds at B&Q). We also expect consensus, which stands at £509m, to move higher, likely in the order of c.4%.