Disposal of Romania Kingfisher has announced the disposal of Brico Dépôt Romania to Altex Romania for an EV of €70m (c. £58m). The sales is expected to be completed in 1H 26 subject to regulatory approval. In FY24, Brico Dépôt Romania made sales of £269m (2.1% of Group sales) and contributed a retail loss of £(18)m/free cash outflow of £(17)m. Leaves a more focused Group This deal is not a surprise. Kingfisher has never made a profit in Romania, having entered the market in 2013 when it acquired Bricostores Romania and it also acquired Praktiker Romania in 2017. This disposal will leave the Group focused on the UK, France, Poland and Spain. Undervalued cashflow and well positioned for consumer recovery when it comes Kingfisher is well-position when the consumer recovery starts. The macro backdrop was starting to improve post interest rate cuts, but short-term concerns are now likely to weigh on the share price until there is a clearer view on how the Budget has impacted GDP growth, the interest rate cycle, and consumer confidence/spending. Kingfisher is expected to continue to generate surplus cash and we still believe the market materially underestimates how far Kingfisher’s margins could recover (see our note, Recovered Earnings Potential, published 22/10/24)