Published on 28 May 2015

Kingfisher reports Q1 sales of £2.6 billion, +0.8%

Kingfisher reports Q1 sales of £2.6 billion, +0.8% LFL and retail profit of £150 million, up 1.4% in constant currencies

Group financial summary (13 weeks ended 2 May 2015): 

               

% Total Change

% Total Change

% LFL Change

Retail Profit*

% Total Change

% Total Change

 

2015/16  £m

Reported

Constant currency

Constant currency

2015/16  £m

Reported

Constant currency

France 953 (11.5)% +0.4% (1.2)% 64 (19.1)% (8.2)%
- Castorama 520 (12.4)% (0.6)% (0.6)%      
- Brico Dépôt 433 (10.4)% +1.6% (1.9)%      
UK & Ireland 1,235 +2.9% +3.1% +1.6% 74 +9.9% +9.8%
- B&Q UK & Ireland 991 (1.7)% (1.5)% (1.1)%      
- Screwfix 244 +26.8% +26.8% +15.4%      
Other International 402 (8.4)% +7.5% +3.8% 12 +8.4% +11.3%
- Poland 233 (10.2)% (0.1)% +0.4% 19 +4.4% +16.1%
- Russia 76 (7.3)% +38.9% +31.3% 1 n/a n/a
- Spain 68 (15.7)% (4.4)% (7.1)% (1) n/a n/a
- New Country Development* 25 +51.4% +69.7% n/a (7) n/a n/a
Total Group1 2,590 (4.6)% +2.7% +0.8% 150 (4.8)% +1.4%
Turkey JV (100%) 63 +2.9% +9.8% +5.0% - n/a n/a


Group highlights:

  • Reported retail profit of £150m impacted by £10m adverse foreign exchange movements on the translation of non-sterling profits and £7m charges for new country development activity. On a constant currency basis, retail profit, excluding new country development, was up 3.1% to £157m
  • Around £88m has been returned via a share buy back since year end (25m shares), forming part of the previously announced £200 million due to be returned during FY2015/16
  • Completion of sale of 70% controlling stake in B&Q China and receipt of £140m cash proceeds. Put option in place for remaining 30% stake in 2 years’ time
  • Exchanged contracts for the disposal of leases on 14 of the previously announced c.60 B&Q store closures – to 2 national retailers over the next 2 years (3 stores subject to planning change)

Q1 Trading review by major geography (in constant currencies):

France

  • Total sales up 0.4% (-1.2% LFL) reflecting a soft market
    • Castorama sales down 0.6% (-0.6% LFL). According to Banque de France data*, sales for the home improvement market were down around 1% in Q1
    • Brico Dépôt sales up 1.6% (-1.9% LFL) impacted by the on-going slow house building market2
  • France gross margins down 80 basis points reflecting higher promotional activity. Costs were tightly controlled with comparatives restated by £9m for IFRIC 21 ‘Levies’3

UK & Ireland

  • Total sales up 3.1% (+1.6% LFL) against strong comparatives (+10.1% LFL Q1 2014/15)
    • B&Q UK & Ireland’s sales down 1.5% (-1.1% LFL; +8.5% 2 year LFL). Sales of outdoor seasonal and building products down 4% (+30% Q1 2014/15). Sales of indoor products, excluding showroom up 2%. Sales of showroom products down 7% reflecting reduced promotional activity and the move to ‘Every Day Great Value’
    • Screwfix sales up 26.8% (+15.4% LFL) driven by its leading omnichannel capability, new and extended trade ranges and 6 new outlets
  • UK gross margins up 90 basis points reflecting weak comparatives (-210 basis points Q1 2014/15) due to more promotionally-led showroom sales last year. Costs benefited from on-going productivity initiatives offset by phasing of marketing costs

Other International

  • Total sales up 7.5% (+3.8% LFL) reflecting a resilient performance in Poland and strong LFL growth in Russia
  • Sales in Poland were broadly flat (+0.4% LFL) against strong comparatives (+11.9% LFL Q1 2014/15) supported by new ranges. Gross margins up 20 basis points and costs were tightly controlled
  • Sales in Russia up 38.9% (+31.3% LFL) reflecting strong consumer spending on durable goods in an uncertain market.

“Véronique Laury, Kingfisher Chief Executive Officer, said: We have made a solid start to the year against strong comparatives. In the UK, B&Q continued to grow sales volumes and Screwfix delivered an excellent performance, opening its 400th store in May. In France, our businesses performed broadly in line with the market. We are also making good early progress with our ‘ONE’ Kingfisher plan to unlock our potential by creating a single, unified company where customer needs come first. Our first ‘sharp’ decisions are being worked on at pace. I am delighted that Arja Taaveniku, our Chief Offer & Supply Chain Officer, joined the team in May, and that the pilot of our unified IT system is on track. We are also pleased to report that we already have agreements to dispose of a quarter of the B&Q stores earmarked for closure. We look forward to sharing more of our plans as the year progresses.”

Source: http://www.kingfisher.com/index.asp?pageid=364

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