Broker snap: Kingfisher skimps on the divi

31st Mar 2010 13:19

UBS has retained its 'buy' recommendation for Kingfisher following the DIY retailer's recent full year results, though it has a few gripes about the dividend payment.'Cash flow was again better than expected (YE net debt £250m) and this will fund higher capex [capital expenditure] in 10-11. The dividend was raised for the first time in 5 years, although the payment was below our expectations, as was the decision to hold the next interim,' UBS said.The broker has kept is 2011 profit before tax forecast unchanged at £630m, putting it some £10m below market consensus. 'There is downside risk from cautious comments on current trading, although there should be enough flex in the gross margin and especially costs to absorb any short term impact. The weather may continue to be a major factor,' UBS warns.The broker has kept its price target at 265p, based on a sum of the parts valuation.