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How good value is the Kingfisher share price as B&Q owner spends £300 million on its own equity?

Kingfisher, the London-listed owner of the B&Q and Screwfix DIY brands as well as several European chains, recently announced a £300 million share…



Kingfisher, the London-listed owner of the B&Q and Screwfix DIY brands as well as several European chains, recently announced a £300 million share buyback. Its share price has declined 23.5% this year as it has grappled with inflation, supply chain difficulties and labour shortages like many other retailers.

As a “pandemic winner” which benefited from people spending more time at home also spending more money on their homes, Kingfisher’s valuation has also suffered from the familiar hangover of lockdown revenue growth proving unsustainable.

kingfisher plc

Its share price losses over the past year pale into insignificance beside those of other companies like the American streaming giant Netflix, upmarket exercise bike brand Peloton and video conferencing app Zoom. They have all lost over 60% of the valuations in the last year (almost 90% in Peloton’s case).

Kingfisher’s 23% decline in the past year is relatively mild in that context. But has still disappointed investors. However, when announcing its most recent quarterly trading update in late May, Kingfisher struck a bullish tone, despite admitting it is not immune to the cost of living crisis and supply chain snarl-ups hitting other retailers.

But despite a challenging economic environment of inflation on track to hit 10% this year and interest rates rising, Kingfisher told investors it is confident it will still meet its full year guidance. Other retailers have been queuing up to downgrade yearly guidance over the past couple of months.

Kingfisher also announced a new £300 million share buyback, arguing that it is an obvious, low-risk way to return cash to shareholders because its sees its current share price as undervalued by the market. The company’s valuation is up almost 10% in the past month and significant share buybacks can be a good sign. But it can also be a sign of a board and management looking for a quick fix to a sliding valuation putting them under pressure.

How should investors see Kingfisher’s valuation prospects? Should they be taking the lead from a company spending hundreds of millions buying its own shares?

Why do companies buy back their own shares and is it a good or bad sign?

Public companies tend to spend money on buying up their own shares for two main reasons. The first is because the board and management are convinced the market is currently undervaluing it. They can’t see that continuing given how they see the company’s prospects and investing in itself seems like the best use of cash on the balance sheet.

The company buys back its own shares because it is convinced they are a bargain at their current market value and have considerable short to mid-term upside.

The second major reason for a share buyback is as an attempt to support a struggling share price. A company spending potentially hundreds of millions buying back its own shares increases demand, which creates positive momentum for trading value. If these shares are then cancelled, all remaining shares subsequently benefit from reverse dilution.

A company having fewer shares can help improve several financial ratios that investors look at when assessing value. These ratios include a company’s return on assets because spending cash on shares that are then cancelled reduces assets on the balance sheet. Another important ratio supported by share buybacks is earnings per share because returns are divided between fewer shares. Improved earnings per share also feeds through to a better price to earnings (p/e) ratio.

These two primary motivations for share buybacks are not, of course, mutually exclusive. A company could be primarily motivated by the conviction good times ahead will see its share price rise, making its own equity a more attractive investment than other options available to it. Like using the cash for acquisitions, R&D or other kinds of capital investment. The fact that doing so will also help boost key ratios investors look at when assessing value is a nice bonus.

The worry for investors is a share buyback is more of a rearguard action. For example, because the board and management are under pressure over poor investor returns. They are looking for a short term fix with their own interests perhaps taking precedence over the long term interests of the company and its shareholders.

The cash might generate more long term shareholder returns if invested in R&D, developing new markets, making acquisitions etc. But if the board and management are under pressure now and investments are expected to need time to create value, as well as inherently carrying risk, a buyback can be an easy sell.

Is Kingfisher’s decision to buy back £300 million of its equity an astute investment or panic buy?

It’s fair to say markets are not currently overly enthusiastic about retailers of discretionary products. Whether to DIYers through B&Q or mainly tradespeople and SMEs through Screwfix in the UK, and their sister brands in continental Europe, Kingfisher sells products used in home improvement, maintenance and construction.

It sells products considered cyclical and representative of discretionary spending that can often be put off if buyer sentiment is poor. If, as expected, the coming months see a decline in discretionary consumer spending, Kingfisher would be expected to experience weaker trading conditions.

But despite that threat, the company believes it will meet its full year guidance. And many analysts are convinced a tough economic environment is already built into Kingfisher’s current valuation. At present share price levels, Kingfisher has a price-to-earnings ratio of around 9, which would generally be considered to offer very good value.

With a net-debt-to-equity ratio sitting at around 23% including lease liabilities, Kingfisher also has a strong balance sheet. That should allow it to ride out and potentially capitalise on a period of weaker trading conditions. It said when issuing its recent trading update it is increasing market share as smaller and less liquid rivals run into difficulties. That’s a trend that can be expected to strengthen if economic conditions are poor over the next year or so.

Kingfisher also told investors it is managing inflation by succeeding to pass on cost increases to customers, which should mean margins remain solid. A dividend yield of 4.8% alongside a consistent recent policy of share buybacks is also attractive.

Attractively priced acquisitions are likely to become an option over coming months, adding to future growth potential. There is also plenty of potential growth for Kingfisher’s e-commerce operations, which currently generate around 18% of sales. That’s a 10% increase on two years ago but still leaves plenty of scope for improvement, especially considering its brands’ relatively well established and strong online presence compared to rivals.

Kingfisher’s share price may not rocket over coming months and further declines are also not out of the question. But the company’s decision to spend hundreds of millions of its cash reserves on its own equity looks sound, especially if taking a longer term perspective.

Long term investors could do well to take note.

The post How good value is the Kingfisher share price as B&Q owner spends £300 million on its own equity? first appeared on Trading and Investment News.

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Sex work is real work: Global COVID-19 recovery needs to include sex workers

Societally, we need to recognize that sex workers have agency and deserve the same respect, dignity and aid as any other person selling their labour.



Globally, sex workers have been left to fend for themselves during the pandemic with little to no support from the government. (AP Photo/Bikas Das)

During the pandemic, business shifted from in person to work-from-home, which quickly became the new normal. However, it left many workers high and dry, especially those with less “socially acceptable” occupations.

The pandemic has adversely impacted sex workers globally and substantially increased the precariousness of their profession. And public health measures put in place made it almost impossible for sex workers to provide any in-person service.

Although many people depend on sex work for survival, its criminalization and policing stigmatizes sex workers.

Research shows that globally, sex workers have been left behind and in most cases excluded from government economic support initiatives and social policies. There needs to be an intersectional approach to global COVID-19 recovery that considers everyone’s lived realities. We propose policy recommendations that treat sex work as decent work and that centre around the lived experiences and rights of those in the profession.

Sex work and the pandemic

The United Nations Population Fund (UNFPA) recently reported that apart from income-loss, the pandemic has increased pre-existing inequalities for sex workers.

In a survey conducted in Eastern and Southern Africa, the UNFPA found that during the pandemic, 49 per cent of sex workers experienced police violence (including sexual violence) while 36 per cent reported arbitrary arrests. The same survey reported that more than 50 per cent of respondents experienced food and housing crises.

Lockdowns and border closures adversely impacted Thailand’s tourism industry which relies partially on the labour of sex workers.

Read more: Sex workers are criminalized and left without government support during the coronavirus pandemic

In the Asia Pacific, sex workers reported having limited access to contraceptives and lubricants along with reduced access to harm reduction resources. Lockdowns also disrupted STI or HIV testing services, limiting sex workers’ access to necessary healthcare.

In North America, sex workers have been excluded from the government’s recovery response. And many began offering online services to sustain themselves.

A woman stands backlit next to a dimly lit bus that reads 'Thailand' with green lighting.
Sex workers stand in a largely shut-down red light area in Bangkok, Thailand on March 26, 2020. (AP Photo/Gemunu Amarasinghe)

Government vs. community response

Globally, sex workers have been left to fend for themselves during the pandemic with little to no support from the government. But communities themselves have been rallying.

Elene Lam, founder of Butterfly, an Asian migrant sex organization in Canada, talks about the resilience of sex wokers during the pandemic.

She says organizations like the Canadian Alliance for Sex Work Law Reform are working in collaboration with Amnesty International to mobilize income support and resources to help sex workers in Canada.

Organizations in the United Kingdom, Germany, India and Spain have also set up emergency support funds. And some sex worker organizations have developed community-specific resources for providing services both in person and online during the pandemic.

Global recovery needs to include sex workers

The International Labour Organization’s “Decent Work Agenda” emphasizes productive employment and decent working conditions as being the driving force behind poverty reduction.

Sociologist Cecilia Benoit explains that sex work often becomes a “livelihood strategy” in the face of income and employment instability. She says that like other personal service workers, sex workers also should be able to practice without any interference or violence.

In order to have an inclusive COVID-19 recovery for all, governments need to work to extend social guarantees to sex workers — so far they haven’t.

As pandemic restrictions disappear, it is crucial to ensure that everyone involved in sex work is protected under the law and has access to accountability measures.

A woman stands wearing a mask with a safety vest on in front of a collage of scantily clad women and a sign that reads 'nude women non stop'
A volunteer helps out at Zanzibar strip club during a low-barrier vaccination clinic for sex workers in Toronto in June 2021. THE CANADIAN PRESS/Frank Gunn


As feminist researchers, we propose that sex work be brought under the broader agenda of decent work so that the people offering services are protected.

  1. Governments need to have a legal mandate for preventing sexual exploitation.

  2. Law enforcement staff need to be trained in better responding to the needs of sex workers. To intervene in and address situations of abuse or violence is critical to ensure workplace safety and harm reduction.

  3. Awareness and educational campaigns need to focus on destigmatizing sex work.

  4. Policy-makers need to incorporate intersectionality as a working principle in identifying and responding to the different axes of oppression and marginalization impacting LGBTQ+ and racialized sex workers.

  5. Engagement with sex workers and human rights organizations need to happen when designing aid support to ensure that an inclusive pathway for recovery is created.

  6. Globally, there needs to be a steady commitment towards destigmatizing sex workers and their services.

Despite the gradual waning of pandemic restrictions, sex workers continue to face the dual insecurity of social discrimination and loss of income support. Many are still finding it difficult to stay afloat and sustain themselves.

Societally, we need to recognize that sex workers have agency and deserve the same respect, dignity and aid as any other person selling their labour.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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OU researchers award two NSF pandemic prediction and prevention projects

Two groups of researchers at the University of Oklahoma have each received nearly $1 million grants from the National Science Foundation as part of its…



Two groups of researchers at the University of Oklahoma have each received nearly $1 million grants from the National Science Foundation as part of its Predictive Intelligence for Pandemic Prevention initiative, which focuses on fundamental research and capabilities needed to tackle grand challenges in infectious disease pandemics through prediction and prevention.

Credit: Photo provided by the University of Oklahoma.

Two groups of researchers at the University of Oklahoma have each received nearly $1 million grants from the National Science Foundation as part of its Predictive Intelligence for Pandemic Prevention initiative, which focuses on fundamental research and capabilities needed to tackle grand challenges in infectious disease pandemics through prediction and prevention.

To date, researchers from 20 institutions nationwide were selected to receive an NSF PIPP Award. OU is the only university to receive two grants to the same institution.

“The next pandemic isn’t a question of ‘if,’ but ‘when,’” said OU Vice President for Research and Partnerships Tomás Díaz de la Rubia. “Research at the University of Oklahoma is going to help society be better prepared and responsive to future health challenges.”

Next-Generation Surveillance

David Ebert, Ph.D., professor of computer science and electrical and computer engineering in the Gallogly College of Engineering, is the principal investigator on one of the projects, which explores new ways of sharing, integrating and analyzing data using new and traditional data sources. Ebert is also the director of the Data Institute for Societal Challenges at OU, which applies OU expertise in data science, artificial intelligence, machine learning and data-enabled research to solving societal challenges.

While emerging pathogens can circulate among wild or domestic animals before crossing over to humans, the delayed response to the COVID-19 pandemic has highlighted the need for new early detection methods, more effective data management, and integration and information sharing between officials in both public and animal health.

Ebert’s team, composed of experts in data science, computer engineering, public health, veterinary sciences, microbiology and other areas, will look to examine data from multiple sources, such as veterinarians, agriculture, wastewater, health departments, and outpatient and inpatient clinics, to potentially build algorithms to detect the spread of signals from one source to another. The team will develop a comprehensive animal and public health surveillance, planning and response roadmap that can be tailored to the unique needs of communities.

“Integrating and developing new sources of data with existing data sources combined with new tools for detection, localization and response planning using a One Health approach could enable local and state public health partners to respond more quickly and effectively to reduce illness and death,” Ebert said. “This planning grant will develop proof-of-concept techniques and systems in partnership with local, state and regional public health officials and create a multistate partner network and design for a center to prevent the next pandemic.”

The Centers for Disease Control and Prevention describes One Health as an approach that bridges the interconnections between people, animals, plants and their shared environment to achieve optimal health outcomes.

Co-principal investigators on the project include Michael Wimberly, Ph.D., professor in the College of Atmospheric and Geographic Sciences; Jason Vogel, Ph.D., director of the Oklahoma Water Survey and professor in the Gallogly College of Engineering School of Civil Engineering and Environmental Science; Thirumalai Venkatesan, director of the Center for Quantum Research and Technology in the Dodge Family College of Arts and Sciences; and Aaron Wendelboe, Ph.D., professor in the Hudson College of Public Health at the OU Health Sciences Center.

Predicting and Preventing the Next Avian Influenza Pandemic

Several countries have experienced deadly outbreaks of avian influenza, commonly known as bird flu, that have resulted in the loss of billions of poultry, thousands of wild waterfowl and hundreds of humans. Researchers at the University of Oklahoma are taking a unique approach to predicting and preventing the next avian influenza pandemic.

Xiangming Xiao, Ph.D., professor in the Department of Microbiology and Plant Biology and director of the Center for Earth Observation and Modeling in the Dodge Family College of Arts and Sciences, is leading a project to assemble a multi-institutional team that will explore pathways for establishing an International Center for Avian Influenza Pandemic Prediction and Prevention.

The goal of the project is to incorporate and understand the status and major challenges of data, models and decision support tools for preventing pandemics. Researchers hope to identify future possible research and pathways that will help to strengthen and improve the capability and capacity to predict and prevent avian influenza pandemics.

“This grant is a milestone in our long-term effort for interdisciplinary and convergent research in the areas of One Health (human-animal-environment health) and big data science,” Xiao said. “This is an international project with geographical coverage from North America, Europe and Asia; thus, it will enable OU faculty and students to develop greater ability, capability, capacity and leaderships in prediction and prevention of global avian influenza pandemic.”

Other researchers on Xiao’s project include co-principal investigators A. Townsend Peterson, Ph.D., professor at the University of Kansas; Diann Prosser, Ph.D., research wildlife ecologist for the U.S. Geological Survey; and Richard Webby, Ph.D., director of the World Health Organization Collaborating Centre for Studies on the Ecology of Influenza in Animals and Birds with St. Jude Children’s Research Hospital. Wayne Marcus Getz, professor at the University of California, Berkeley, is also assisting on the project.

The National Science Foundation grant for Ebert’s research is set to end Jan. 31, 2024, while Xiao’s grant will end Dec. 31, 2023.

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Pfizer vaults into sickle cell market as GBT deal confirmed

Pfizer’s reported interest in acquiring sickle cell disease specialist Global Blood Therapeutics (GBT)  has been confirmed, with the
The post Pfizer…



Pfizer’s reported interest in acquiring sickle cell disease specialist Global Blood Therapeutics (GBT)  has been confirmed, with the $68.50-per-share deal valuing GBT at $5.4 billion.

As we reported this morning, the deal gives Pfizer already-approved SCD therapy Oxbryta (voxelator) – which industry watchers reckon could see a dramatic uptick in sales with Pfizer’s marketing muscle – plus a phase 3 antibody candidate, a phase 1 follow-up to Oxbryta that could offer improved dosing.

Oxbryta is the main asset in the deal, with Evaluate predicting sales could reach $1.5 billion in 2028 – a leap forward from the $195 million it made last year and $127 million in the first half of 2022.

Pfizer is expecting big things from the takeover , predicting that the company’s SCD franchise will bring in combined peak sales of more than $3 billion.

The boards of both companies have recommended the deal to shareholders, and the two companies suggested it should close before the end of the year – assuming of course it doesn’t fall foul of any antitrust issues raised by financial regulators.

The GBT deal comes at a time when the market for SCD therapies is undergoing significant change, with multiple new drugs reaching the market after years of stagnation and progress also being made with genetic therapies from the likes of bluebird bio, Vertex Pharma/CRISPR Therapeutics and Precision Bio/Novartis.

Oxbryta came to market in 2019, a few days after Novartis’ injectable anti-P-selectin antibody Adakveo (crizanlizumab), which is also tipped for blockbuster sales but like Oxbryta has suffered from a slow rollout.

CRISPR Therapeutics and Vertex are also in the running with their gene-editing candidate CTX001, in phase 1/2 trials which are due to generate final results later this year. If those results are positive the partners have said they could file for approval in the US before year-end.

Meanwhile, bluebird bio’s one-time gene therapy  lovotibeglogene autotemcel is supposed to be heading for regulatory filing in the US next year, although it has been delayed by an FDA partial clinical hold implemented after a persistent case of anaemia was seen in one adolescent patient in a clinical trial.

GBT’s inclacumab – another P-selectin antibody that could encroach on Adakveo – is in a pair of phase 3 trials due to generate results next year.

Meanwhile, there are a couple of orally-active pyruvate kinase R activators from Forma Therapeutics and Agios – etavopivat and mitapivat, respectively – in mid-stage development, and Pfizer has its own SCD candidate in PF-07209326, an E-selectin anatomist in phase 1.

It’s worth noting that this isn’t Pfizer’s first deal in SCD. In 2011 it paid $340 million for rights to rivipansel, a pan-selectin antagonist developed by GlycoMimetics, which failed a phase 3 test in 2019 and was jettisoned by Pfizer the following year.

The deal is another example of Pfizer splashing out on business development thanks to windfall cash generated by its COVID-19 vaccine Comirnaty and oral antiviral therapy Paxlovid. It comes shortly after the group closed a $6.7 billion acquisition of Arena Pharma, bringing on board etrasimod in late-stage testing for ulcerative colitis, and made an $11.6 billion takeover bid for Biohaven and its migraine therapy Nurtec ODT (rimegepant).

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