Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Keep an eye on Kingfisher’s cash flow
Home improvement company Kingfisher (KGF)
saw its free cash flow evaporate to a mere £6m in the year to 31 January 2018, down from £459m a year earlier after investment in stock soaked up cash.
The B&Q-to-Screwfix brands owner’s operating cash flow (before tax and capital expenditure) plunged 45% to £557m.
Free cash flow should really fund the dividend, so Kingfisher, currently returning cash via a share buyback and a progressive shareholder reward, could be in a tricky situation going forward,
given a dividend bill of circa £230m a year.