16th Mar 2020 09:26
(Alliance News) - Kingfisher PLC on Monday said the Covid-19 outbreak did not dent sales in February and March but expects a hit from the store closures ordered in France and Spain.
Shares in the retailer were 16% lower in London on Monday morning at 114.40 pence each. The FTSE 100 index, of which Kingfisher is a component, was down 7.2% in early trading.
Kingfisher said, up to the past Saturday, the company has not experienced any dent in sales from the Covid-19 pandemic.
In February, the company's like-for-like sales were 7.6% higher. Excluding the benefit of the extra day for Leap Year, like-for-like sales were up 2.3%. February 29 fell on Saturday.
In the first two weeks of March, up to and including this past Saturday, Kingfisher said sales "continued to be positive".
"However, there is significant uncertainty on sales and demand as the outbreak spreads, and as central governments and businesses take action to contain and delay its impact," Kingfisher added.
All 221 of the company's Castorama and Brico Depot stores were closed on France, starting Sunday, until April 14 - following a decision by the French government to close all non-essential places used by the public.
In addition, all 28 stores in Spain have closed until Sunday March 29, following the government's declaration of a two-week state of emergency.
Kingfisher said: "We are working to mitigate the implications of these closures, including via alternative routes to continue serving customers (eg via click & collect or home delivery)."
Kingfisher's remaining 1,100 stores across the UK, Ireland, Poland, Romania, Portugal and Russia will remain open.
"We are committed to supporting local authorities and governments to limit the spread of the virus, and the health and safety of our colleagues and customers remains our top priority. Our teams are also evaluating the best ways to satisfy emergency needs in our markets, particularly for electricity, heating and plumbing," Kingfisher Chief Executive Thierry Garnier said.
He continued: "While significant uncertainty exists around the impact of Covid-19, we are taking immediate and significant measures to contain our costs and protect our financial position. We have a strong balance sheet, with significant liquidity headroom and limited financial debt."
Kingfisher said it is not yet able to predict the full impact of Covid-19 on its financial 2021 results, but currently plans to release its financial 2019 results, for the twelve months to January 31, on March 24. However, this could change depending on any government decisions made about Covid-19 before then.
"The company has modelled the impact of various downside scenarios on the business. We are managing the business to protect profitability and are taking immediate and significant actions to reduce costs and optimise our cash flow and liquidity," Kingfisher said.
As of January 31, Kingfisher had GBP195 million in cash and cash equivalents, which rose to GBP250 million as of Thursday last week, and has access to two undrawn revolving credit facilities totalling GBP775 million. In total, Kingfisher said it has GBP1.03 billion in liquidity immediately available.
As of January 31, Kingfisher had financial debt totalling GBP136 million. Net debt, including GBP2.56 billion of lease liabilities under IFRS 16, stood at GBP2.53 billion at the end of January.
"Further updates will be given as soon as we have greater visibility on external developments and the impact on our trading," Kingfisher said.
The company noted 95% of its vendor factories in China have re-opened.
By Paul McGowan; [email protected]
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