Last checked at 18 Aug 2016 07:00
Thursday 18 August 2016
Q2 to 31 July 2016
Kingfisher reports sales of £3.0 billion, +3.0% LFL*
Financial overview and highlights:
· Solid Q2 performance with LFL sales up +3.0% driven by the UK & Poland · Completed disposal of remaining 30% economic interest in B&Q China following regulatory approval. Net cash proceeds of £63m received · £150m (44m shares) returned to date to shareholders since year end via share buyback (3)
(1) FY 2016/17 total and LFL sales cover 3 months to 31 July (FY 2015/16 cover 13 weeks to 1 August for total sales; 3 months to 31 July for LFL) (2) Prior year excludes China due to disposal of controlling 70% stake in April 2015 (3) Of the previously announced c.£600m capital return through to end of FY 2018/19 (over and above the annual ordinary dividend) \* Throughout this release '*' indicates first instance of a term defined in the 2015/16 Annual Report & Accounts (p146) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Véronique Laury, Kingfisher Chief Executive Officer, said:
"We have delivered another solid sales performance in Q2 driven by the UK and Poland. In the UK, the EU referendum result has created uncertainty for the economic outlook, although there has been no clear evidence of an impact on demand so far on our businesses. In France, widespread industrial action and exceptionally wet weather created a more challenging environment, after a more encouraging Q1. We remain cautious on the short-term outlook.
"In the meantime, we continue to focus on our ONE Kingfisher plan, based on always putting customer needs first. We look forward to updating you on our early progress at our half year results next month."
Q2 trading highlights by division (in constant currencies):
UK & IRELAND · Total sales +5.0%. LFL +7.2% benefiting from continued strong Screwfix performance o B&Q UK & Ireland sales +0.3% despite store closures. LFL +5.6% including c.2% benefit from sales transference associated with store closures. LFL of seasonal +9.6%. LFL of non-seasonal, including showroom +3.4% o Screwfix sales up +24.5%. LFL +13.3% driven by its leading omnichannel capability, new and extended ranges and new outlets
FRANCE · Total sales -1.4% (LFL -3.2%). Sales for the home improvement market (Banque de France data*) -1.1% in Q2; new housing starts +5.7%(4); planning permits +10.3%(4) o Castorama sales -2.2% (LFL -3.3%) reflecting less promotional activity. LFL of seasonal -4.3%. LFL of non-seasonal, including showroom -3.0% o Brico Dépôt sales -0.3% (LFL -3.1%)
(4) For the 3 months to end of June 2016
OTHER INTERNATIONAL o Sales in Poland +10.5% (LFL +7.3%) benefiting from a currently supportive market and new ranges. LFL of seasonal +10.7%. LFL of non-seasonal, including showroom +6.5%
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H1 2016/17 technical guidance:
Gross margins by major geography compared to last year: · France expected to be up around 50 basis points reflecting less promotional activity · UK expected to be down around 100 basis points reflecting mix effects from strong growth in Screwfix, clearance related to the B&Q store closures and higher omnichannel sales · Poland expected to be up around 150 basis points reflecting strong trading
France operating costs: · H1 operating costs will increase by c.£10 million offset by a corresponding reduction in H2, hence not impacting the full year. Comparatives will not be restated.(5)
(5) Certain French levies moved last year from recognition on an accruals basis across the year, to recognition solely in Q4 (when the liability was triggered) under IFRIC 21. Since then, a change in legislation relating to one of these levies (TASCOM) has led to the reversal of this accounting treatment.
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Enquiries: Investor Relations +44 (0) 20 7644 1029 Media Relations +44 (0) 20 7644 1030 Brunswick +44 (0) 20 7404 5959
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This announcement can be downloaded from www.kingfisher.com or viewed on the Kingfisher IR iPad App. Data tables for Q2 and H1 sales 2016/17 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 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
Our next announcement will be the Half Year Results on 20 September 2016.
Forward-looking statements:
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This announcement has been prepared in relation to the financial results for the Quarter ended 31 July 2016. 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).
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