24th May 2006 07:01
Kingfisher PLC24 May 2006 EMBARGOED UNTIL 0700 HOURSWednesday 24 May 2006 Kingfisher plc First quarter results for the 13 weeks ended 29 April 2006 Group Financial Summary Retail Sales (1) % Total % LFL Retail Profit (2) % Total 2006/07 2005/06 Change Change 2006/07 2005/06 Change £m £m (Reported) £m £m (Reported) UK 1,029 1,089 -5.5% -6.8% 21.9 73.7 -70.3%France(3) 701 652 7.6% 1.7% 40.2 40.2 -Rest of Europe (3)(4) 206 156 32.4% 10.2% 14.0 12.6 11.1%Asia (5) 84 44 90.7% 11.8% (7.7) (1.2) n/a Total 2,020 1,941 4.1% -2.0% 68.4 125.3 -45.4% (1) Joint Venture (JV) sales are not consolidated. (2) Retail profit is stated before central costs, exceptional items and share of joint venture and associate interest and tax. (3) 2006/07 £1 =1.4525 euro: 2005/06 £1 = 1.4534 euro (4) Rest of Europe includes Castorama Poland, Castorama Italy, Brico Depot Spain, B&Q Ireland, Castorama Russia, Koctas JV in Turkey and Hornbach in Germany and central Europe. (5) Asia includes B&Q China, B&Q Home South Korea and B&Q Taiwan JV. • UK and France sales impacted by cold weather and a late start to the spring season• B&Q's programme to improve service, choice, value and store environment on track • Kingfisher again outperformed the French market • Rest of Europe performed strongly, first store in Russia now open • Asia sales boosted by last year's OBI acquisition and new store openings • Net debt at 29 April 2006 of £1,209 million (28 January 2006: £1,355 million) Gerry Murphy, Group Chief Executive, said: "Kingfisher's first quarter again featured solid international performances anda very weak UK market. "Kingfisher's international development continued with five new stores opened,including the first store in Russia. In France, Kingfisher's twin-track strategyis working well with Castorama and Brico Depot gaining ground in a fairlysluggish market. Overall Kingfisher's international sales and profit growth,before increased development costs, was strong. "However, the UK home improvement market has continued to be very tough in 2006.The first two months of the quarter were particularly weak as persistent coldweather in Europe delayed the start of the key garden and outdoor season and amajor fire temporarily disrupted B&Q's kitchen deliveries. "Overall, the UK market remains very promotional and weather sensitive and it isnot clear that stronger holiday sales represent an underlying recovery indemand. However, B&Q made further progress with its programme to improvecustomer service, product choice, value for money and store environment." UK (Total sales -5.5%, -6.8% LFL, Retail Profit -70.3%) B&Q total sales fell 7.7% to £945.4 million (-8.8% LFL). Sales of gardening andoutdoor products were significantly impacted by unusually cold weather in March.A major fire at B&Q's kitchen distribution centre in February disrupted kitchensales and extended lead times for deliveries for much of the quarter (reducingreported first quarter LFL sales by around 2%). Sales over the Easter and BankHoliday period were stronger, benefiting from targeted promotional activity,improved weather and a recovery in kitchen orders. Retail profit of £18.0 million (2005/06: £71.2 million) reflects the lower salesand a three percentage point fall in gross margins. Around a third of the fallreflects the remainder of the major stock clearance programme started last year.The balance was mostly due to ongoing promotional activity and price reductionsyet to annualise against initiatives launched in the second half of 2005/06.Underlying cost inflation, excluding store openings, was 4% before £12 millionsavings in central office, stores and supply chain costs. Progress continued with the action programme launched last year. 'ServiceSquads' have now been extended to over 200 stores and the recently launched tilerange is performing well. Eight stores were converted to mini-Warehouses and oneWarehouse store was downsized. Significant progress was made on formatdevelopment with the opening of a new concept store in Luton, which has beenwell-received by customers. Screwfix Direct sales were up 26.0% to £81.5 million (+23.3% LFL) and retailprofit more than doubled to £5.4 million. New ranges of bathroom suites andshowers and own-brand power tools performed well. Six Trade Counters opened inthe quarter, taking the total to 13. Early trading at the two new Trade Depotbranches is encouraging and a further three are planned to open in the balanceof the year. Development costs of £1.5 million arose in the quarter. FRANCE (Total sales +7.6%, +1.7% LFL, Retail Profit flat) Castorama sales grew by 3.5% to £395.8 million (+2.2% LFL). Sales of new rangesof wooden flooring, kitchens and bathrooms were particularly strong but poorspring weather held back sales of gardening and outdoor products. Two storeswere relocated and one new store opened. Three Castorama stores were closedprior to their re-opening as Brico Depots in the summer. Brico Depot sales grew 13.3% to £305.1 million (+1.0% LFL) against strongcomparatives (+10.9% LFL in 2005/06). Two new stores were opened and a largerand more widely distributed annual catalogue was launched. Overall, retail profit in France was flat at £40.2 million. Higher sales andsupply-side benefits were offset by £5 million higher costs of storepre-opening, IT development and store transfers. Excluding these costs,underlying retail profit was ahead 13%. REST OF EUROPE (Total sales +32.4%, +10.2% LFL, Retail Profit +11.1%) Castorama in Poland and Italy both delivered solid sales and retail profitgrowth despite challenging local markets. Store expansion continued with threestores opening in the quarter including Kingfisher's first Castorama store inRussia. Retail profit for the Rest of Europe was up 11.1% at £14 million after £2.1million higher start-up costs in Spain and Russia. ASIA (Total sales +90.7%, +11.8% LFL, Retail Loss £(7.7)m) B&Q China sales growth was driven by new stores, the OBI China stores acquiredlast year and LFL growth of 11.8%. One store opened, taking the total to 49. Theprogramme to integrate OBI China is almost complete with all 13 of the originaltrading stores fully revamped at the end of April. Retail losses in Asia of £7.7 million include £3 million from the OBI storesacquired last year and £0.6 million additional development costs in South Korea. SALES DATA Retail Sales % Total % Total LFL 2006/07 2005/06 Change Change (constant Change £m £m (Reported) currency)B&Q 945.4 1,024.6 (7.7)% (7.7)% (8.8)%UK Trade (1) 83.8 64.7 29.5% 29.5% 23.3%Total UK 1,029.2 1,089.3 (5.5)% (5.5)% (6.8)%Castorama 395.8 382.3 3.5% 3.5% 2.2%Brico Depot 305.1 269.3 13.3% 13.3% 1.0%Total France 700.9 651.6 7.6% 7.5% 1.7%Castorama Poland 96.6 75.5 27.9% 21.8% 14.1%Castorama Italy 71.5 56.6 26.3% 26.3% 8.6%Other Europe (2) 37.8 23.4 61.5% 61.5% 0.4%Total Rest of Europe 205.9 155.5 32.4% 29.3% 10.2%B&Q China 82.0 44.1 85.9% 66.3% 11.8%B&Q South Korea 2.1 - - - -Total Asia 84.1 44.1 90.7% 70.6% 11.8%Total Group 2,020.1 1,940.5 4.1% 3.6% (2.0)% (1) includes Screwfix Direct and Trade Depot(2) includes Brico Depot Spain, B&Q Ireland and Castorama Russia STORE DATA Store numbers Selling space (000s sq.m.) B&Q 322 2,279Screwfix Direct 13 1 Trade Depot 2 9Total UK 337 2,289Castorama 100 962Brico Depot 75 388Total France 175 1,350Castorama Poland 30 257Castorama Italy 27 171 Castorama Russia 1 9Brico Depot Spain 7 33B&Q Ireland 7 35Koctas Turkey 8 46Total Rest of Europe 80 551B&Q China 49 478B&Q South Korea 1 7B&Q Taiwan 21 97Total Asia 71 583Total 663 4,772 Kingfisher plc is Europe's leading home improvement retail group and the thirdlargest in the world, with over 660 stores in 11 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 strategic alliance with, Hornbach,Germany's leading DIY Warehouse retailer, with over 120 stores in Germany andneighbouring countries. Enquiries: Ian Harding, Group Communications Director 020 7644 1029Nigel Cope, Head of Communications 020 7644 1030 Heather Ward, Head of Investor Relations 020 7644 1032 Further copies of this announcement are available at www.kingfisher.com or byapplication to: The Company Secretary, Kingfisher plc, 3 Sheldon Square, London,W2 6PX. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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