26th May 2005 07:01
Kingfisher PLC26 May 2005 EMBARGOED UNTIL 0700 HOURSThursday 26 May 2005 Kingfisher plc First Quarter ended 30 April 2005 Group Financial Highlights (prepared in accordance with IFRS)* • Sales up 2.2% to £1.94 billion (2004: £1.90 billion), up 0.5% in constant currency • Like-for-Like (LFL) sales down 5.6% • Retail profit** down 15.6% to £125.9 million (2004: £149.2 million), down 17.9% in constant currency • Net debt of £753.7 million (£510.9 million as at 1 May 2004) * Results for Q1 are presented under International Financial Reporting Standards(IFRS). The comparatives for Q1 2004/05 have been restated. The detailedimpact of adoption of IFRS was set out in a press release dated 17 March 2005and is available at www.kingfisher.com. A document showing the restatement of2004/05 quarterly retail profits prepared under IFRS is also available atwww.kingfisher.com. **Retail profit is stated before other operating costs, exceptional items andour share of joint venture and associates' interest and tax. Gerry Murphy, Chief Executive, said: "So far, 2005 has been difficult for UK retailers, with consumer spendingclearly impacted by higher interest rates, higher taxes and pensioncontributions, and rising fuel bills. An early Easter and poor spring weatheralso affected our main consumer businesses in the UK and France during ourFebruary to April first quarter. Brico Depot continued to grow strongly, as didour businesses in Italy and Asia. "With the key summer season still to come, it is too early to judge the outlookfor the full year. However, trading in the first three weeks of our secondquarter continues to be challenging in the UK and France. "Though current trends are adverse, Kingfisher companies will continue to offergreat products and great prices to attract customers to our stores. We alsoremain focused on improving cost efficiency and investing to sustain long-termgrowth and improved returns for shareholders." Company Profile Kingfisher plc is Europe's leading home improvement retailer and the thirdlargest in the world, with over 600 stores in nine countries in Europe and Asia.Its main retail brands are B&Q, Castorama, Brico Depot and Screwfix Direct.Kingfisher also has a 21% interest in, and a strategic alliance with, Hornbach,Germany's leading DIY Warehouse retailer, with 117 stores in eight Europeancountries. UK & IRELAND For the 13 weeks ended 30 April 2005 Retail Sales £m % Total % LFL Retail Profit £m % Total Change Change Change 2005 2004 2005 2004B&Q* 1,038.4 1,068.8 (2.8)% (7.7)% 73.2 87.7 (16.5)%Screwfix Direct 64.7 64.2 0.8% 0.8% 2.6 4.6 (43.5)%Total UK 1,103.1 1,133.0 (2.6)% (7.2)% 75.8 92.3 (17.9)% *B&Q profits are restated to include income previously reported separately asproperty income. UK consumer spending - Consumer demand weakened markedly in the quarter, withBritish Retail Consortium data for the three months to April showing a declinein "other non-food" like-for-like sales of 3.2%, following a decline of 0.4% inthe previous quarter. B&Q's total sales declined 2.8% to £1.0 billion (7.7% LFL decline) and retailprofit declined by 16.5% to £73.2 million. Based on the most recent availabledata for the major DIY retailers, B&Q maintained market share. Sales were weaker across all categories reflecting reduced footfall, althoughaverage transaction values remained steady. Trade categories performed best,being less impacted by weather and retail consumption trends. New ranges ofplumbing and building materials sold well. All other categories declined due toweaker overall consumer demand, an early Easter holiday and poor spring weather.Sales of kitchens, bathrooms and bedrooms were impacted by stronger competitiveactivity and more widespread promotions. Products included in the recent Price Reverse campaign and new rangesintroduced, performed relatively better. More contemporary ranges of key lineswill be introduced into stores during the current quarter. Store development - In the first quarter one new Warehouse store and three newmini-Warehouses opened. Five Supercentres were converted to the mini-Warehouseformat. One Warehouse closed temporarily, and two Supercentres closed. In the current rental environment for UK out of town retail property, B&Q hasscaled back its plans for new Warehouse commitments. Instead, the focus will beon opening mini-Warehouses and revamping existing Supercentres. Retail margin declined from 8.2% to 7.1%. Gross margins improved although thiswas entirely due to the timing last year of a major promotion. Increases instore rents and business rates and higher distribution costs for homefulfilment, were only partly offset by overhead savings and £4 million lowerpre-opening costs. SCREWFIX DIRECT's sales grew by 0.8% to £64.7 million as customer demand startedto recover following last year's complete reconfiguration of fulfilmentoperations. The consumer slowdown had less impact on the business compared withB&Q as Screwfix Direct has a higher proportion of trade customers. Retail profit declined by £2.0 million to £2.6 million. The lower costs offulfilment were more than offset by increased advertising and marketing costs,the use of promotional discount vouchers, and the £0.5 million cost of openingtwo Trade Counters. Screwfix Direct had four Trade Counters at the end of thefirst quarter and a further three trials are planned for the remainder of theyear. FRANCE For the 13 weeks ended 30 April 2005 Retail sales £m 2005 2004 % Change % Change % LFL (Reported) (Constant) ChangeCastorama 382.3 389.9 (1.9)% (4.4)% (4.4)%Brico Depot 269.3 213.4 26.2% 23.1% 10.9%Total France 651.6 603.3 8.0% 5.3% 1.2% Retail profit £m 2005 2004 % Change % Change (Reported) (Constant)Castorama 20.2 27.2 (25.7)% (27.3)%Brico Depot 20.0 16.2 23.5% 20.5%Total France 40.2 43.4 (7.4)% (9.5)% 2005 £1 = 1.4534 euro; 2004 £1 = 1.4903 euro All comparative growth figures in the remainder of the text are expressed on aconstant currency basis. French market - According to Banque de France, DIY comparable store sales growthin France declined by 0.6% in the first quarter compared to growth of 2.3% inthe previous quarter. In a promotional and discount-led market, impacted bypoor spring weather and an early Easter, Kingfisher grew overall market sharewith Group sales in France up 5.3% (1.2% LFL). CASTORAMA sales were £382.3 million, down 4.4% (4.4% LFL decline). Retailprofit of £20.2 million declined 27.3%. Sales were generally weak, impacted by the poor weather, disruption from plannedstore refurbishments and the change-over to new decorative ranges in thequarter. Lowering prices for customers and increasing sales of cheaperown-brand and direct-sourced product impacted sales. Air-conditioning wasparticularly weak, following exceptional growth last year. Seasonal categories, including garden furniture and garden power tools, wereflat despite the poor weather, boosted by the launch of the first new catalogue.Two further 200 page catalogues will be distributed in the remainder of theyear. New ranges of kitchens, flooring and showers were the strongestperforming categories. Store development - Five stores were revamped in the quarter and one new storeopened, taking the number of new format Castorama stores to 19. During thequarter three stores were closed, one of which is being transferred to BricoDepot. Pricing - In an increasingly price conscious market, Castorama further improvedits price perception ranking from fifth to third. Retail margin decreased from 7.0% to 5.3%. An estimated £5 million cost ofimplementing new ranges and revamping stores was not fully offset by sourcinggains and other productivity improvements. BRICO DEPOT delivered sales of £269.3 million, up 23.1% (10.9% LFL) and retailprofit of £20.0 million, up 20.5%. Benefiting from a stronger trade market andits price leadership, Brico Depot grew sales in all categories against strongcomparatives. A second national catalogue was launched in April. Two storeswere revamped in the quarter. Retail margin decreased from 7.6% to 7.4% due to additional investment insystems and head office to support continued growth. REST OF WORLD For the 13 weeks ended 30 April 2005 Retail sales £m 2005 2004 % Change % Change % LFL (Reported) (Constant) ChangeCastorama Poland 75.5 80.7 (6.4)% (22.8)% (36.1)%Castorama Italy 56.6 45.8 23.6% 20.4% 7.8%B&Q China 44.1 32.7 34.9% 38.7% 4.0%Other Int'l (1) (2) 9.6 2.3 317.4% 317.4% 10.5%Total 185.8 161.5 15.0% 3.9% (17.6)% Retail profit £m 2005 2004 % Change % Change (Reported) (Constant)Castorama Poland 6.5 13.7 (52.6)% (60.8)%Castorama Italy 5.1 1.6 218.8% 200.0%B&Q China (1.4) (2.1) 33.3% 33.3%B&Q Taiwan 2.5 2.0 25.0% 19.0%Other Int'l (1) (2.8) (1.7) (64.7)% (64.7)%Total 9.9 13.5 (26.7)% (40.4)% (1) Other International includes Hornbach in Germany, Koctas in Turkey, B&QHome in South Korea, Brico Depot in Spain and Castorama in Russia. (2) Joint venture sales not consolidated (B&Q Taiwan, Koctas in Turkey) All comparative growth figures in the remainder of the text are expressed on aconstant currency basis. Total sales outside the UK, Ireland and France were £185.8 million, up 3.9%(17.6% LFL decline). Retail profit was £9.9 million, down 40.4%. Castorama Poland - Sales were £75.5 million, a decline of 22.8%. LFL salesdeclined 36.1% against a very strong comparative last year (+52.7% LFL), ascustomers purchased ahead of higher VAT rates. Retail profit declined 60.8% to£6.5 million reflecting the decline in sales and the costs of opening two newstores (2004/05: 0 stores). Castorama Italy - Sales were £56.6 million, up 20.4% (7.8% LFL) and retailprofit was £5.1 million, up 200.0%. All categories performed well. Salesgrowth was supported by the launch of three catalogues during the quarter, whichfocused on bathrooms, kitchens and garden projects. Retail margin increased from3.5% to 9.0% driven by volume-related cost efficiencies and lower pre-openingcosts. B&Q China - Sales reached £44.1 million, up 38.7% (4.0% LFL). Growth was drivenby increasing trade sales and stronger installation services. LFL sales growthwas impacted by revamping activity in four stores and the later timing ofChinese New Year promotional activity. Retail losses of £1.4 million were £0.7million lower than last year, partly due to lower pre-opening costs. Last yearthe costs of opening three stores early in May were absorbed in the firstquarter. One store was opened in the period (2004/05: 0 stores) During the quarter, Kingfisher announced the accelerated expansion of B&Q China,with an agreement to buy OBI Asia Holding Ltd, the holding company for OBI'smajority equity interest in its Chinese operations. Subject to the necessarygovernment approvals, the addition and conversion of OBI's stores willsignificantly accelerate B&Q China's growth, giving B&Q China around 50 storestrading within the next 12 months. B&Q Taiwan, a 50% joint venture, delivered £2.5 million retail profit, up 19.0%due to strong sales growth, particularly in installations, and good costcontrol. One store opened in the quarter, taking the total to 19. Other International losses increased £1.1 million to £2.8 million reflecting asmaller contribution from Hornbach (21% interest) and development costs inSpain, South Korea and Russia. Enquiries: Ian Harding, Group Communications Director 020 7644 1029 Nigel Cope, Head of Communications 020 7644 1030 Heather Ward, Head of Investor Relations 020 7644 1032 Kingfisher plc 020 7372 8008 Further copies of this announcement can be downloaded from www.kingfisher.com orare available by application to: The Company Secretary, Kingfisher plc, 3Sheldon Square, London, W2 6PX DATA BY COUNTRY - as at 30 April 2005 Home Improvement Store numbers Selling space Employees (000s sq.m.) (FTE)B&Q 338 2,293 27,578Screwfix Direct - - 1,451Total UK & Ireland 338 2,293 29,029 Castorama 101 1,030 13,146Brico Depot 64 328 4,803Total France 165 1,358 17,949 Castorama Poland 27 240 4,932Castorama Italy 22 140 1,730B&Q China 22 251 5,264B&Q Taiwan 19 95 1,793Other International (1) 9 44 788Total Rest of World 99 770 14,507Total 602 4,421 61,485 (1) Other international includes Koctas in Turkey, B&Q Home in South Koreaand Brico Depot in Spain. First quarter results - for the 13 weeks to 30 April 2005 Retail Sales £m % Total % LFL Retail Profit £m % Total 2005 2004 Change Change 2005 2004 Change (Reported) (Reported)B&Q 1,038.4 1,068.8 (2.8)% (7.7)% 73.2 87.7 (16.5)%Screwfix Direct 64.7 64.2 0.8% 0.8% 2.6 4.6 (43.5)%Total UK & Ireland 1,103.1 1,133.0 (2.6)% (7.2)% 75.8 92.3 (17.9)% Castorama 382.3 389.9 (1.9)% (4.4)% 20.2 27.2 (25.7)%Brico Depot 269.3 213.4 26.2% 10.9% 20.0 16.2 23.5%Total France 651.6 603.3 8.0% 1.2% 40.2 43.4 (7.4)% Castorama Poland 75.5 80.7 (6.4)% (36.1)% 6.5 13.7 (52.6)%Castorama Italy 56.6 45.8 23.6% 7.8% 5.1 1.6 218.8%B&Q China 44.1 32.7 34.9% 4.0% (1.4) (2.1) 33.3%B&Q Taiwan (2) - - - - 2.5 2.0 25.0%Other Int'l (1) (2) 9.6 2.3 317.4% 10.5% (2.8) (1.7) (64.7)%Rest of World 185.8 161.5 15.0% (17.6)% 9.9 13.5 (26.7)%Total 1,940.5 1,897.8 2.2% (5.6)% 125.9 149.2 (15.6)% (1) Other International includes Hornbach in Germany, Koctas in Turkey, B&QHome in South Korea, Brico Depot in Spain, Castorama in Russia and B&QInternational costs. (2) Joint venture sales not consolidated (B&Q Taiwan, Koctas in Turkey) Note that 2004/05 quarterly retail profit numbers are restated under IFRS, andavailable at www.kingfisher.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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