A very weak Polish performance more than offset UK/France being slightly ahead of consensus Kingfisher has reported a 29% decline in 1H PBT to £336m (company-compiled consensus £359m; 1H23 £472m) versus management’s guidance at May’s Q1 update to expect to report adjusted 1H PBT of c.£350m. Group sales were up 1.1% (1Q +0.8% impacted by March’s adverse weather + tough Polish comp ) with Group Retail profits down 22% to £433m (consensus £445m; 1H23 £555m). A flat1H DPS of 3.8p was declared. By main division, UK& Ireland sales were up 3.4% (1Q24 +1.4%) with Retail profit down to £306m, a margin of 9.2% (1H23 £339m; margin 10.5%). Screwfix saw strong market share gains, helped by new space. France sales fell 0.6% (1Q24 -4.1%) with retail profits down 19% to £104m, a margin of 4.5% (1H23 £129m; margin 5.6%). Castorama performance was more resilient than Brico Depot. Poland sales were down 3.6% (1Q24 -3.3%) with retail profits down 63% to £35m, a margin of 1.8% (1H23 £94m; margin 10.3%). Comparatives were strong, but Q2 was weaker than expected as consumers shopped more promotions. FY24 PBT guidance reduced by 5% Management has reduced FY24 PBT guidance to £590m, having previously been comfortable with (then) consensus PBT of £633m in May (consensus £624m). Q3 Group LFL sales to date are down 2.4% versus Q2 -1.2% and Q1-3.3%. It has continued to see positive momentum in the UK & Ireland, a slight slowdown in France and small improvement in Poland. Consensus PBT for FY25 of £681m (INVe £690m) is likely to come back too. Management continues to expect over £500m free cash flow for the year (WC unwind) and has announced a new £300m share buyback this morning, as expected. Forecast and TP under review In our view, valuation (CY24E PE 8.7x and a DPS yield of 5.5%) is not particularly demanding at this point in the cycle, with the share price down 5% over a year and flat YTD. Kingfisher has a strong balance sheet and continues to buy back shares. However, we think the shares are unlikely to perform until investors are prepared to look through the weak consumer environment, inflationary pressures and higher interest rates. Next news: 3Q24 22 November.