Scrapping Mansion Tax is Good News for DIY Giant Kingfisher

Stamp duty relief will support the housing market this year, while the election of the Conservative government removes the overhang of a "mansion tax" being imposed

Philip Gorham 29 May, 2015 | 11:47AM

Home improvement giant Kingfisher (KGF) reported a first-quarter trading update that supported our thesis of a robust performance in the U.K. and medium-term margin improvement.

Kingfisher has structural advantages over online competitors

Our positive view of the stock ultimately rests on the U.K. market, and the ability of management to execute on margin expansion across geographies. In the U.K. in the first quarter, there was modest upside to our estimates, with B&Q like-for-like sales down 1.1% despite a double-digit comparable a year ago and Screwfix up 15.4% on a like-for-like basis. Although this was broadly in line with our forecasts, we believe it provided modest upside to consensus. We expect Stamp Duty relief to support the housing market this year, while the election of the Conservative government removes the overhang of a "mansion tax" being imposed by the opposition.

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Philip Gorham  

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