21st May 2013 07:00
Tuesday 21 May 2013
Darty plc End of Year Trading Statement
Recovery plan on track
Darty plc today announces a trading update for the fourth quarter period from 1 February to 30 April and for the financial year ended 30 April 2013, based on unaudited management accounts. Reflecting the evolving structure of the Group, changes have been made to the reportable segments. All trading data for the prior quarters for the financial year ended 30 April 2013 are restated in an appendix to this statement, as is the segmental analysis for both the 6 months to 31 October 2012 and 12 months to 30 April 2012.
Summary
·; Continued progress during the quarter in delivering our plan - "Nouvelle Confiance":
o Régis Schultz joined as Chief Executive on 23 April
o managed closure of Darty Spain commenced on 4 April and is proceeding as planned
o disposal of Darty Italy's operations completed on 1 March
·; Market share gains in our core businesses, particularly France, in difficult markets
·; Further growth of web sales confirming the customer appeal of our cross-channel offer
·; Total revenue down 0.8 per cent on a like-for-like basis, with an improved trend through the quarter. Gross margin improvement at Darty France, with overall gross margin for the Group down 20 basis for the period
·; Adjusted profit before tax for the year to 30 April 2013 for the Continuing Group¹ expected to be in line with current market expectations
Q4 revenue change (3 months to 30 April)
Euros
| Local Currency
| Like-for-like
| |
Darty France | (6.0)% | (6.0)% | (2.7)% |
Belgium and the Netherlands | 5.1% | 5.1% | 3.7% |
Other* | (3.4)% | (1.7)% | (2.1)% |
Total excluding Darty Spain | (4.8)% | (4.6)% | (1.4)% |
Darty Spain | 24.1% | 24.1% | 18.1% |
Total** | (3.9)% | (3.8)% | (0.8)% |
* Datart and Darty Turkey.
**Darty Italy excluded.
Régis Schultz, Chief Executive, commented:
"Over the quarter, we outperformed our core markets, particularly in France, confirming the positive customer response to the improvements we are making in-store and on-line. Our industry leading service, growing cross channel business, excellent product range and good value proposition are an important source of competitive advantage and I will look to build on these strong foundations over the coming months. However, markets overall have remained challenging and highly promotional, and this, together with the product mix, continues to have an adverse impact on gross margins.
"I fully support the plans announced in December - "Nouvelle Confiance" - to restore shareholder value by eliminating the losses at our non-core businesses, increasing profitability in our core businesses, and improving efficiencies in the cost base. We are making good progress and I look forward to updating you on our plans in June."
¹ For the financial year ended 30 April 2013, the Continuing Group includes Darty France, Belgium and the Netherlands, Datart and Turkey (Other), and Darty Spain; Darty Italy is now a discontinued business.Continuing Group
Excluding the new Darty Telecom agreement, total Group revenue was down 1.0 per cent and like-for-like sales were down by 0.8 per cent, with an improved trend through the period. Revenue was again driven by Multimedia and Communications, with Vision remaining weak, albeit less so than the prior quarter. The continued appeal of our cross-channel offer resulted in sales growth of 8 per cent in web sales, now representing over 12 per cent of total product sales.
Gross margin overall was down 20 basis points reflecting product mix and challenging market conditions with increased promotional activity in some countries, partially off-set by an improved performance at Darty France.
Darty France
Darty France strongly outperformed the market for the period, with market share gains in all major product categories. Total revenue was down 6.0 per cent and down 2.2 per cent excluding Darty Telecom. On a like-for-like basis sales fell 2.7 per cent.
In the period a dedicated services and subscriptions section was introduced to the Darty.com website and a new social media website, www.36000solutions.com, was launched allowing users to interact with, and benefit from, the Darty expert advice and solutions. Overall web-generated sales grew 4 per cent to over 13 per cent of total product sales.
Gross margin was still under pressure from the ongoing competitive market conditions, but with a more favourable product mix and benefit of the new Darty Telecom agreement, gross margin improved by 100 basis points.
Belgium and the Netherlands
At Vanden Borre in Belgium and BCC in the Netherlands revenue grew by 5.1 per cent and by 3.7 per cent on a like-for-like basis with growth at both businesses against a solid performance last year. Web-generated sales continued to grow strongly, up over 40 per cent to 9 per cent of total product sales.
Vanden Borre continued to trade robustly taking further market share. BCC saw improved sales and market share gains, following the improvement in its service offer with the roll-out of free delivery in the prior quarter, but with increasingly promotional conditions and product mix effects, particularly in the Netherlands, gross margin was down 180 basis points.
Other
Revenue at Datart and Darty Turkey fell by 1.7 per cent in local currency and by 2.1 per cent on a like-for-like basis, with an improved trend in both businesses compared to the previous quarter. Datart delivered positive revenue growth in market conditions that remained challenging. Sales in Turkey were impacted by a strong performance last year and a focus on margin. While the gross margin in Turkey saw an improvement in the period, overall gross margin was down 180 basis points.
Darty Spain
As announced on 4 April, a managed closure of the operations in Spain has started and is progressing in line with our expectations. The stores will cease trading in June and the closure is still expected to cost a total of around €30 million. This will be a cash cost incurred in the year to 30 April 2014. In addition there will be around €10 million of non-cash fixed asset write-offs. Sales in the quarter were very strong as a result of the stock clearance process.
Store numbers and selling space as at 30 April 2013
Store numbers | Selling space (000 sqm) | |||
2013 | 2012 | 2013 | 2012 | |
Darty France | 229 | 229 | 315.1 | 313.6 |
Belgium and the Netherlands | 117 | 114 | 129.1 | 126.0 |
Other* | 69 | 72 | 71.6 | 76.5 |
Total excluding Darty Spain | 415 | 415 | 515.8 | 516.1 |
Darty Spain | 42 | 45 | 41.0 | 43.3 |
Total | 457 | 460 | 556.8 | 559.4 |
* Datart and Darty Turkey.
There will be a telephone conference call for analysts at 08:00 on 21 May 2013. Dial-in number: +44 (0) 20 3003 2666. A recording of this call will be made available after 10.00am. Replay dial-in number: +44 (0) 20 8196 1998, Access Pin: 4955828.
The Group will issue its Full Year Results on Wednesday 19 June 2013.
Enquiries
Analysts
Darty plc
Simon Ward +44 (0) 20 7269 1400
Media
| UKRLM Finsbury | |
Rollo Head | +44 (0) 20 7251 3801 |
Jenny Davey |
France
Le Public Système
Ségolène de Saint Martin +33 1 41 34 23 31
About Darty plc
Darty group is a leading cross channel service led electrical retailer operating over 450 stores in eight European countries and achieving 11% of its products sales on the web. It generated an annual turnover of nearly €4 billion in 2011/12 through operations in Darty France, Vanden Borre in Belgium, BCC in the Netherlands, Datart in the Czech Republic and Slovakia, Darty Turkey and Darty Spain. Its ordinary shares are listed with the UK Listing Authority and trade on the market for listed securities on the London Stock Exchange under the symbol DRTY.L. It is also listed on the NYSE Euronext Paris.
For further information, please visit the company's website, www.dartygroup.com.
Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, Darty plc does not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.
APPENDICES
Restated revenue split for 2012/13
Revenue change as reported in Euros
Q1 | Q2 | HY | Q3 | Q4 | H2 | FY | |
Darty France | (1.2)% | (6.6)% | (3.9)% | (2.9)% | (6.0)% | (4.1)% | (4.0)% |
Belgium and the Netherlands | 10.9% | 0.7% | 5.7% | 2.9% | 5.1% | 3.8% | 4.7% |
Other* | 3.1% | (2.1)% | 0.3% | (6.5)% | (3.4)% | (5.3)% | (2.8)% |
Total excluding Darty Spain | 1.2% | (4.9)% | (1.9)% | (2.2)% | (4.8)% | (3.2)% | (2.6)% |
Darty Spain | 4.4% | 0.4% | 2.3% | (7.3)% | 24.1% | 4.9% | 3.7% |
Total | 1.3% | (4.7)% | (1.8)% | (2.3)% | (3.9)% | (3.0)% | (2.4)% |
Revenue change in local currency
Q1 | Q2 | HY | Q3 | Q4 | H2 | FY | |
Darty France | (1.2)% | (6.6)% | (3.9)% | (2.9)% | (6.0)% | (4.1)% | (4.0)% |
Belgium and the Netherlands | 10.9% | 0.7% | 5.7% | 2.9% | 5.1% | 3.8% | 4.7% |
Other* | 5.1% | (4.7)% | (0.2)% | (8.2)% | (1.7)% | (5.8)% | (3.3)% |
Total excluding Darty Spain | 1.3% | (5.1)% | (1.9)% | (2.4)% | (4.6)% | (3.3)% | (2.7)% |
Darty Spain | 4.4% | 0.4% | 2.3% | (7.3)% | 24.1% | 4.9% | 3.7% |
Total | 1.4% | (5.0)% | (1.8)% | (2.5)% | (3.8)% | (3.0)% | (2.5)% |
Like-for-like
Q1 | Q2 | HY | Q3 | Q4 | H2 | FY | |
Darty France | (2.5)% | (3.2)% | (2.8)% | 0.4% | (2.7)% | (0.9)% | (1.8)% |
Belgium and the Netherlands | 9.8% | 0.0% | 4.8% | 2.4% | 3.7% | 2.9% | 3.8% |
Other* | (1.6)% | (9.9)% | (6.1)% | (10.8)% | (2.1)% | (7.7)% | (7.0)% |
Total excluding Darty Spain | (0.1)% | (3.2)% | (1.7)% | (0.3)% | (1.4)% | (0.8)% | (1.2)% |
Darty Spain | 5.9% | (2.7)% | 1.5% | (6.5)% | 18.1% | 3.6% | 2.6% |
Total | 0.1% | (3.2)% | (1.6)% | (0.5)% | (0.8)% | (0.6)% | (1.1)% |
* Datart and Darty Turkey.
Restated segmental analysis for the 6 months to 31 October 2012
Darty France | Belgium & The Netherlands | Other | Spain | Unallocated | Continuing Group | Discontinued operations* | Group | |
€m | €m | €m | €m | €m | €m | €m | €m | |
Revenue | 1,272.8 | 323.5 | 140.5 | 57.8 | - | 1,794.6 | 48.1 | 1,842.7 |
Retail profit/(loss) | 24.4 | 1.6 | (8.8) | (8.0) | (7.1) | 2.1 | (6.0) | (3.9) |
Share of joint venture and associates' interest and taxation | (0.4) | - | - | - | - | (0.4) | - | (0.4) |
Movements in options and relating charges over non - controlling interests | - | - | - | - | 0.6 | 0.6 | - | 0.6 |
Exceptional costs | (0.1) | - | - | - | (6.0) | (6.1) | - | (6.1) |
Profit on disposal of business operation | 9.4 | - | - | - | - | 9.4 | - | 9.4 |
Operating profit/(loss) | 33.3 | 1.6 | (8.8) | (8.0) | (12.5) | 5.6 | (6.0) | (0.4) |
Finance costs | (7.0) | - | (7.0) | |||||
Finance income | 0.1 | - | 0.1 | |||||
Finance costs - net | (6.9) | - | (6.9) | |||||
Loss before income tax | (1.3) | (6.0) | (7.3) | |||||
Income tax expense | (3.2) | - | (3.2) | |||||
Taxation | (3.2) | - | (3.2) | |||||
Loss for the period | (4.5) | (6.0) | (10.5) | |||||
*Darty Italy |
Restated segmental analysis for the 12 months to 30 April 2012
Darty France | Belgium & The Netherlands | Other | Spain | Unallocated | Continuing Group | Discontinued operations* | Group | |
€m | €m | €m | €m | €m | €m | €m | €m | |
Revenue | 2,798.9 | 657.8 | 312.6 | 119.1 | 8.3 | 3,896.7 | 1,356.6 | 5,253.3 |
Retail profit/(loss) | 106.8 | 19.2 | (5.6) | (15.5) | (15.2) | 89.7 | (39.7) | 50.0 |
Share of joint venture and associates' interest and taxation | (0.9) | - | - | - | - | (0.9) | - | (0.9) |
Movement in options and related charges over non-controlling interests | - | - | - | - | 2.1 | 2.1 | - | 2.1 |
Impairment of available for sale financial assets | (6.5) | - | - | - | - | (6.5) | - | (6.5) |
Exceptional costs | (13.5) | - | - | (20.4) | (0.6) | (34.5) | (153.1) | (187.6) |
Amortisation and impairment of acquisition related intangible assets | - | - | - | (0.2) | - | (0.2) | - | (0.2) |
Operating profit/(loss) | 85.9 | 19.2 | (5.6) | (36.1) | (13.7) | 49.7 | (192.8) | (143.1) |
Finance costs | (14.2) | (14.2) | ||||||
Finance income | 3.1 | 3.1 | ||||||
Finance costs - net | (11.1) | 0.0 | (11.1) | |||||
Profit/(loss) before income tax | 38.6 | (192.8) | (154.2) | |||||
Income tax expense | (22.4) | (47.0) | (69.4) | |||||
Post tax loss on disposal | - | (90.3) | (90.3) | |||||
Profit/(loss) for the year | 16.2 | (330.1) | (313.9) | |||||
*Darty Italy and Comet |
Related Shares:
DRTY.L