21st Feb 2008 07:00
Kingfisher PLC21 February 2008 EMBARGOED UNTIL 0700 HOURSThursday 21 February 2008 Kingfisher plc Trading update for the fourth quarter ended 2 February 2008 Group Financial Summary % Total % Total % LFLRetail Sales (1) 2007/08 2006/07 Change Change Change £m £m (Reported) (1) (Constant currency) UK (2) 989 1,043 (5.1)% 2.5% (1.9)% 13 weeks 14 weeks 13 vs 14 weeks 13 vs 13 weeks France (3) 754 660 14.1% 4.3% 1.1% Rest of Europe (4) 315 248 27.0% 14.3% 4.4% Asia (5) 122 132 (7.5)% (6.4)% (7.5)%International 1,191 1,040 14.4% 5.4% 0.9%Total 2,180 2,083 4.6% 4.0% (0.5)% 1) For the UK businesses, the fourth quarter reported total sales figures forthe 13 weeks ended 2 February 2008 (2006/07: 14 weeks ended 3 February 2007).Outside the UK, figures are on a calendar month basis. 2) B&Q, Screwfix and Trade Depot. 3) Castorama and Brico Depot. 4) Rest of Europe includes sales for Poland, Italy, Spain, Ireland and Russia.Sales from Turkey JV and Hornbach in Germany are not consolidated. 5) China only as Taiwan JV sales are not consolidated. South Korea included incomparatives only. Q4 Highlights (all figures in constant currency) • Group total sales up 4.0% (13 week basis), like for like sales(LFL) down 0.5%. • B&Q UK total sales up 0.2% (13 week basis), down 1.7% LFL withunderlying gross margin rate slightly up before range review clearance activity.A further eight large stores were revamped and new power tool, shelving andstorage ranges successfully launched; • French sales up 4.3% (+1.1% LFL), gross margins benefiting fromcontinued own-brand penetration and strong sales; • Rest of Europe sales up 14.3% (+4.4% LFL), boosted by a strongend to the year in Poland (+12.1% LFL) against tough comparatives; • Asia sales down 6.4% (-7.5% LFL) reflecting the continued impactof the slowdown of new apartment sales in the major Chinese markets and changingsupplier regulations. Full Year • Kingfisher expects to announce on 27 March 2008 full yearadjusted profit before tax in line with the current consensus of analystexpectations; • Reported net debt is expected to be £1.6 billion, slightly higherthan previous guidance due to the effect of exchange rates on around 1.1 billionof euro issued debt. Ian Cheshire, Group Chief Executive, said: "Kingfisher's international businesses, which account for more than half ofGroup sales, continued to grow, with Castorama in France and Poland performingparticularly strongly. Continuing this momentum will be our key internationalpriority next year, along with addressing our performance in China. "In the UK, we made good progress in a challenging market and B&Q finished theyear in better shape after the biggest year of change in its history. Byfocusing on improving product choice, store environment and service forcustomers, B&Q now has a stronger platform to face what is expected to be atougher consumer environment. "Kingfisher has leading retail brands in attractive markets around the world. Ibelieve that, with the right management team clearly focused on driving higherearnings and better capital efficiency, we can improve returns and deliver areal step-change in shareholder value." UK Q4 Retail Sales £m 2007/08 2006/07 Reported Reported % LFL % Change % Change Change (13 vs 14 weeks) (13 vs 13 weeks) 13 weeks 14 weeksUK 989 1,043 (5.1)% 2.5% (1.9)% UK includes B&Q in the UK, Screwfix and Trade Depot. Due to the 53rd week in UK reporting for 2006/07, the 13 week Reported Change %above compares 13 weeks ended 2 February 2008 with 13 weeks ended 27 January2007. On this basis B&Q LFL was -1.4%. However, for better alignment, the actualreported change in LFL sales of -1.7% compares 13 weeks ended 2 February 2008 to13 weeks ended 3 February 2007. B&Q total reported sales were £874 million, up 0.2% on a 13 week basis (-1.7%LFL), reflecting a tougher retail environment, offset by good sales growth fromrevamped large stores, with new decorative, bedroom and flooring rangesperforming particularly well. Before the Q4 impact of range review clearanceactivity of £4 million, the underlying gross margin rate slightly improved,reflecting less promotional activity in the quarter than the previous year andstronger sales of new ranges within higher margin categories. Results from the new format large stores continued to be encouraging. A furthereight revamps were completed in the quarter, taking the total number of newformat stores trading to 39, with the next phase of six revamps alreadyunderway. Screwfix total reported sales were £110 million, up 24.0% on a 13 week basis,driven by an expanded catalogue and the continued roll-out of the new tradecounters, providing customers with immediate product availability. An additional13 outlets opened during the quarter, taking the total to 93. FRANCE Q4 Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) Change France 754 660 14.1% 4.3% 1.1% France includes Castorama and Brico Depot. All percentage increases below are in constant currencies. In France, Kingfisher's total sales grew 4.3% to £754 million (+1.1% LFL).Banque de France data shows that comparable DIY store sales* declined by around0.5%, however on the same basis Kingfisher's businesses delivered comparablesales growth of +1.5%. Gross margins are expected to have improved during thequarter due to higher own-brand sales penetration and an improved sales mixacross both businesses. *Banque de France data including relocated and extended stores Castorama total sales grew by 2.7% to £395 million (+3.0% LFL, +3.8% on acomparable store basis) with bathroom, flooring, lighting and paint rangesperforming well. Stores in the modern format (representing 42% of store space)continued to outperform. In 2008/09 the Castorama store development programmewill accelerate, with eight revamps and two relocations scheduled for the firsthalf of the year. Brico Depot sales grew 6.1% to £359 million (-1.1% LFL against a strongcomparative of 8.5%) with eight more stores compared with the same quarter lastyear, impacted by internal cannibalisation of 1.4%. REST OF EUROPE Q4 Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) Change Rest of Europe 315 248 27.0% 14.3% 4.4% Rest of Europe includes Poland, Italy, Spain, Ireland, Russia, Turkey JV andHornbach in Germany. Joint Venture and Associate sales are not consolidated. All percentage increases below are in constant currencies. Rest of Europe sales increased 14.3% to £315 million (+4.4% LFL against a verystrong two year comparative in Poland of 12.5%), with 12 more stores tradingcompared with the same period last year. Sales for Castorama and Brico Depot in Poland grew 19.5% to £178 million (+12.1%LFL), boosted by strong consumer spending in a buoyant construction market andfavourable weather. Castorama Italy sales declined 5.9% to £71 million (-9.1%LFL) in a continuing weak retail market. Underlying trading at Brico Depot Spain and Castorama Russia continued to beencouraging and Koctas in Turkey, a 50% joint venture, continued to performwell. Although sales are not consolidated from Hornbach (21% economic interest),the contribution to retail profit for the full year is expected to be weakerthan last year in a difficult German market. During Q4, eight stores opened: three in Poland, three in Turkey, and one eachin Russia and Spain. ASIA Q4 Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) Change Asia 122 132 (7.5)% (6.4)% (7.5)% Asia includes China only. B&Q Taiwan JV sales are not consolidated. South Koreaincluded in comparatives only. All percentage increases below are in constant currencies. B&Q China sales declined 3.4% to £122 million (-7.5% LFL), impacted by the newregulations covering trading terms between retailers and suppliers and acontinuing slowdown of new apartment sales in the major Chinese markets. Thesehave declined by around 10% compared to the same period last year. Four morestores were trading compared with the same quarter last year. Two new storesopened during the quarter, taking the total to 62. As previously announced, B&Q Taiwan was sold to its 50% joint venture partner on4 January 2008. For the year ended 2 February 2008 Retail Sales £m (1) 2007/08 2006/07 % Change % Change % LFL Change (Reported) (1) (Constant currency)UK (2) 4,395 4,262 3.1% 5.1% 0.4% 52 vs 53 weeks 52 vs 52 weeks 52 weeks 53 weeks France (3) 3,224 2,955 9.1% 7.2% 2.6% Rest of Europe (4) 1,273 1,002 27.0% 22.8% 12.2% Asia (5) 472 457 3.4% 7.0% (0.1)%International 4,969 4,414 12.5% 10.8% 4.6%Total 9,364 8,676 7.9% 8.0% 2.6% 2007/08 £1 =1.4472 euro 2006/07 £1 = 1.4720 euro 1) For the UK businesses, reported total sales figures are for the 52weeks ended 2 February 2008 (2006/07: 53 weeks ended 3 February 2007). Outsidethe UK, figures are on a calendar month basis. 2) B&Q, Screwfix and Trade Depot. 3) Castorama and Brico Depot. 4) Rest of Europe includes sales for Poland, Italy, Spain, Ireland andRussia. Sales from Turkey JV and Hornbach in Germany are not consolidated. 5) China and South Korea. Taiwan JV sales not consolidated. Enquiries: Ian Harding, Group Communications Director 020 7644 1029 Nigel Cope, Head of Communications 020 7644 1030 Sarah Gerrand, Head of Investor Relations 020 7644 1032 Copies of this announcement are available at www.kingfisher.com, or from: TheCompany Secretary, Kingfisher plc, 3 Sheldon Square, London, W2 6PX. Kingfisher plc is Europe's leading home improvement retail group and the thirdlargest in the world, with 780 stores in nine countries in Europe and Asia. Itsmain retail brands are B&Q, Castorama, Brico Depot and Screwfix. Kingfisher alsohas a 21% interest in, and strategic alliance with, Hornbach, Germany's leadingDIY Warehouse retailer, with over 120 stores in Germany and eight other Europeancountries. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Kingfisher