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Preview: Shell AGM and Kingfisher results

Tuesday brings Royal Dutch Shell Plc (LON:RDSB) into focus, as it holds its AGM, elsewhere, retailer Kingfisher releases results.

Shell petrol station
Crude's recent rally may have taken the edge off somewhat.

Tuesday brings Royal Dutch Shell Plc (LON:RDSB) into focus, as it holds its AGM.

Whilst crude’s recent rally, up to nearly US$50 per barrel, will no doubt have taken some of the edge off, and the room will likely be less of a pressure cooker for Shell.

The dividend appears more assured, compared to how it looked earlier this year at least.

Nevertheless, it may not be all sweetness and light – as a group of investors are raising questions of the group’s plans to handle climate change.

Campaigning investors The Aiming for A coalition says Shell has failed to fully address the impact of reduced demand for oil and gas because of new technologies such as carbon capture and electric cars.

The group acknowledged improvements made by the company, but demanded more risk and strategy disclosure. It said investors with assets worth US$5.05trln, including Rathbone Greenbank Investments, will provide Shell with direct feedback on progress at Shell’s AGM on Tuesday.

Rathbone ethical research and engagement analyst and Aiming for A spokesman, Matt Crossman, said: “There remain areas which demand attention, not least how the management of the risks and opportunities from climate change work their way into executive incentives.”

The group claimed investors needed to know more about the specific nature of the gas assets in Shell’s portfolio following its merger with gas producer BG Group.

Kingfisher to be boosted by early Easter

Broker Numis says the group, which is trying to turn itself round, should have benefited from the early Easter but the broker expects that colder temperatures in Northern Europe to have delayed the onset of what it calls the important 'gardening season'.

"In the past, this has often reversed out in Q2. The UK business will remain underpinned by the exceptional growth of Screwfix (now more than 20% of divisional sales) and LFL at B&Q should gain from its own and Homebase’s store closure programmes," said analyst Matthew Taylor, who rates the share 'reduce', targeting 325p.

As reported earlier this year, retail profit for the year to end January was up 7.4% to £746mln largely due to a good performance from Screwfix and a stable overall performance in France. But statutory profit for the year was £512mln, over 20% down from £644mln in 2014.

The Share Centre said: "The group beat market expectations with its full year results, but the weak performance of the French operations remain a drag and investors will be keen to hear how that part of the group is performing." It rates KGF a 'hold'.

Announcements

Full year - Severn Trent PLC (LON:SVT), Cranswick plc (LON:CWK), Aveva Group (LON:AV.), Homeserve PLC (LON:HSV).

Trading statement - Kingfisher PLC (LON:KGF)

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