Q3 Trading Update

RNS Number : 9644H

Kingfisher PLC

21 November 2018

 

Wednesday 21 November 2018: Q3 to 31 October 2018

Kingfisher reports sales of £3.0 billion up 1.2% in constant currency, LFL⁽¹⁾ down 1.3%

Financial highlights

Sales 2018/19 % Total Change % Total Change % LFL Change £m Reported Constant currency Constant currency UK & Ireland    1,292 +1.4% +1.4% (0.7)% - B&Q UK & Ireland 850 (2.8)% (2.8)% (2.9)% - Screwfix 442 +10.6% +10.6% +4.1% France 1,107 (3.9)% (3.1)% (3.4)% - Castorama 573 (8.5)% (7.6)% (7.3)% - Brico Dépôt 534 +1.5% +2.4% +1.1% Other International 649 +5.4% +8.7% +1.6% - Poland 388 +2.4% +3.9% +1.4% - Iberia(2) 87 +0.9% +2.0% +2.0% - Russia(3) 101 (6.4)% +5.2% +2.7% - Romania(4) 69 +77.1% +80.4% (0.5)% - Screwfix Germany 4 +5.8% +6.3% +6.4% Total Group 3,048 +0.2% +1.2% (1.3)%

Véronique Laury, Chief Executive Officer, said: 

"We continue to make progress on our ONE Kingfisher transformation. We remain on track to achieve our key strategic milestones for the third year in a row, and increased our gross margin in the quarter. 

"Transformation on this scale is tough, and we are operating in a difficult retail environment. We face challenges and we are addressing them. Our main challenge is Castorama France and we shared our action plan to fix it at the half year. Our action plan is now implemented for this year. We have accelerated our move to an everyday low price strategy and have launched a new marketing campaign to make it visible to our customers, however there is no quick fix.

"We are committed to our plan and to building a strong business for the long-term. As part of this commitment, we have taken the decision to exit Russia, Spain and Portugal. This will allow us to apply our strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position and create good homes by making home improvement accessible for everyone.

"Finally, I'm pleased to announce we are also returning a further £50m via share buyback which completes our £600m capital return commitment in the first three years of the plan."

Strategic decisions

·     Exiting Russia, Spain & Portugal  to focus on markets where we have, or can reach, a market leading position

Q3 performance

·     Q3 total sales up 1.2% in constant currency, LFL down 1.3% reflecting continued weak sales in Castorama France

·     Q3 Group gross margin after clearance up 40bps versus Q3 last year (H1 down 40bps)

·     Year to date gross margin after clearance is up in UK, Poland and Brico Dépôt France

FY 18/19 technical guidance

·     In FY 18/19 expect to grow the gross margin after clearance in the UK, Poland and Brico Dépôt France however the outlook for Castorama France is more uncertain given difficult trading and the ongoing impact of recent national demonstrations

·     Completing the final £50m tranche of c.£600m capital return commitment⁽⁵⁾ via share buyback (£140m by end of FY 18/19)

Q3 trading highlights by division (in constant currencies): UK & IRELAND Total sales +1.4% (LFL -0.7%) ·     B&Q UK & Ireland sales -2.8%. LFL -2.9% including -c.1.5% impact from the discontinuation of showroom installation services ·     Screwfix sales +10.6%. LFL +4.1% with 9 new outlets opened during Q3 FRANCE Total sales -3.1% (LFL -3.4%). Sales for the home improvement market (Banque de France data(6)) were flat in Q3 ·     Castorama sales -7.6%. LFL -7.3% reflecting continued weak footfall and the impact of transformation-related activity ·     Brico Dépôt sales +2.4%. LFL +1.1% reflecting good growth from the new unified ranges, which continue to re-energise the Brico Dépôt offer OTHER INTERNATIONAL Total sales in Poland +3.9% (LFL +1.4%) despite the introduction of new laws on Sunday trading and against a strong comparative (Q3 17/18 LFL: +6.0%)

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. Brico Dépôt Spain reported an operating profit of £2m & Portugal reported an operating loss of £2m in FY 17/18

⁽³⁾ Russia reported an operating loss of £8m in FY 17/18

⁽⁴⁾ Includes Praktiker Romania acquired on 30 November 2017

⁽⁵⁾ Through to end of FY 2018/19 (over and above the annual ordinary dividend)

⁽⁶⁾ Includes relocated and extended stores http://webstat.banque-france.fr/en/browse.do?node=5384326

Contacts

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

This announcement can be downloaded from www.kingfisher.com. Data tables for Q3 sales FY18/19 are available for download in excel format at http://www.kingfisher.com/index.asp?pageid=59. We can be followed on Twitter @kingfisherplc with the Q3 results tag #KGFQ3. Kingfisher American Depository Receipts are traded in the US on the OTCQX platform:(OTCQX: KGFHY) http://www.otcmarkets.com/stock/KGFHY/quote 

Our next announcement will be our full year results on 21 March 2019.

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 October 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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