Kingfisher PLC Q2 Trading Update (9508X)

TIDMKGF

RNS Number : 9508X

Kingfisher PLC

16 August 2018

Thursday 16 August 2018: Q2 trading update to 31 July 2018

Financial highlights

 
                                 Sales    % Total             % Total     % LFL(1) Change 
                                2018/19     Change              Change 
   -------------------------  ---------  ---------  ------------------  ------------------ 
                                   GBPm   Reported   Constant currency   Constant currency 
    UK & Ireland                  1,412      +6.0%               +6.0%               +4.2% 
    - B&Q UK & Ireland            1,005      +3.9%               +3.9%               +3.6% 
    - Screwfix                      407     +11.8%              +11.8%               +5.5% 
    France                        1,193      +0.4%              (0.7)%              (1.0)% 
    - Castorama                     648     (3.1)%              (4.1)%              (3.8)% 
    - Brico Dépôt         545      +4.8%               +3.7%               +2.6% 
    Other International             650      +3.6%               +5.6%               +1.4% 
    - Poland                        388      +1.8%               +2.5%               +1.3% 
    - Iberia (2)                    102      +0.8%              (0.3)%              (0.3)% 
    - Russia                         99    (10.9)%              (1.1)%               +2.1% 
    - Romania (3)                    58     +79.5%              +80.8%               +4.6% 
    - Screwfix Germany                3     +21.6%              +20.4%              +20.4% 
    Total Group                   3,255      +3.4%               +3.4%               +1.6% 
   -------------------------  ---------  ---------  ------------------  ------------------ 
 

-- Q2 Group LFL up 1.6% helped by improved performance of weather-related categories which contributed c.+2% to Group LFL; H1 LFL -1.1% (Q1 LFL -4.0%)

-- Good Q2 sales recovery at B&Q and Screwfix versus Q1 within the context of a continuing weak UK consumer backdrop

   --     Sales and gross margin of unified and unique ranges continued to grow 
   --     H1 Group gross margin after clearance costs expected to be c.-40bps with Q2 ahead of Q1 

-- Actions in place to improve H2 Group gross margin and therefore still expect to grow the full year Group gross margin after clearance costs

   --     France performance in H1 reflects: 

o Weaker footfall and impact of transformation-related activity at Castorama

o Continued sales growth at Brico Dépôt benefitting from new unified ranges

o Higher costs (c.+3.5% in constant currency) including phasing of marketing investment in Brico Dépôt

-- GBP90m returned (30m shares) year to date via share buyback. Now returned GBP550m of c.GBP600m capital return commitment (4)

Véronique Laury, Chief Executive Officer, said:

"We started our transformation two and a half years ago and are on track to deliver our strategic milestones for the third year in a row.

"In Q2, I'm pleased that we grew our sales after the exceptionally harsh weather conditions in Q1. In B&Q, Screwfix and Brico Dépôt France we delivered good sales growth. However, the performance of Castorama France has been more difficult and as a result we have put additional actions in place to support our full year performance in France with the benefits expected to come through in H2.

"We look forward to providing a more detailed update at our H1 results in September."

 
 
              Q2 trading highlights by division (in constant currencies) 
 
              UK & IRELAND 
              Total sales +6.0%. LFL +4.2% reflecting improved performances at 
              B&Q and Screwfix within the context of a continuing weak UK consumer 
              backdrop 
               *    B&Q UK & Ireland sales +3.9%. LFL +3.6% driven by 
                    strong performance of weather-related categories 
                    benefiting LFL by c.+7% (impact on LFL in Q1 18/19 
                    c.-6%, H1 18/19 c.+1%) 
 
 
               *    Screwfix sales +11.8%. LFL +5.5% with 12 new outlets 
                    opened during Q2 
 
 
 
              FRANCE 
              Total sales -0.7% (LFL -1.0%). Sales for the home improvement market 
              (Banque de France data(5) ) were up c.1% in Q2 
               *    Castorama sales -4.1%. LFL -3.8% reflecting continued 
                    softer footfall and the impact of 
                    transformation-related activity. LFL of 
                    weather-related categories was flat (impact on LFL in 
                    Q1 18/19 c.-4%, H1 18/19 c.-2%) 
 
 
               *    Brico Dépôt sales +3.7%. LFL +2.6% 
                    reflecting good growth from the new unified ranges, 
                    which continue to re-energise the Brico 
                    Dépôt offer, supported by investment in 
                    marketing 
 
 
 
              OTHER INTERNATIONAL 
              Total sales in Poland +2.5%. LFL +1.3% against a strong comparative 
              (Q2 17/18: +4.0%) 
 

Footnotes

(1) Like-for-like sales growth representing the constant currency, year on year sales growth for stores that have been open for more than a year

(2) Brico Depôt Spain & Portugal

(3) Includes Praktiker Romania acquired on 30 November 2017

(4) Through to end of FY 2018/19 (over and above the annual ordinary dividend)

(5) Includes relocated and extended stores http://webstat.banque-france.fr/en/browse.do?node=5384326

Contacts

 
                                         Tel:                              Email: 
   Investor Relations    [phone]    [e-mail] 
 Media Relations         [phone]            [e-mail] 
 Teneo Blue Rubicon      [phone]         [e-mail] 
 

This announcement can be downloaded from www.kingfisher.com. Data tables for Q2 2018/19 are available for download in excel format at http://www.kingfisher.com/index.asp?pageid=59

Our next announcement will be the Half Year results on 19 September 2018.

We can be followed on Twitter @kingfisherplc with the Q2 results tag #KGFQ2. Kingfisher American Depository Receipts are traded in the US on the OTCQX platform:(OTCQX: KGFHY) http://www.otcmarkets.com/stock/KGFHY/quote

Forward-looking statements

You are not to construe the content of this announcement as investment, legal or tax advice and you should make your own evaluation of the Company and the market. If you are in any doubt about the contents of this announcement or the action you should take, you should consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (or if you are a person outside the UK, otherwise duly qualified in your jurisdiction).

This announcement has been prepared in relation to the financial results for the Quarter ended 31 July 2018. The financial information referenced in this announcement is not audited and does not contain sufficient detail to allow a full understanding of the results of the Group. Nothing in this announcement should be construed as either an offer or invitation to sell or any offering of securities or any invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Group or an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (as amended).

Certain information contained in this announcement may constitute "forward-looking statements" (including within the meaning of the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995), which can be identified by the use of terms such as "may", "will", "would", "could", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "plan", "goal", "aim" or "believe" (or the negatives thereof) or other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, changes in global or regional trade conditions, changes in tax rates, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks, assumptions and uncertainties that could cause actual events or results or actual performance of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements.

The Company does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in the Company's expectations.

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August 16, 2018 02:00 ET (06:00 GMT)