31st May 2007 07:02
Kingfisher PLC31 May 2007 EMBARGOED UNTIL 0700 HOURSThursday 31 May 2007 Kingfisher plc Q1 trading update for the 13 weeks ended 5 May 2007 Group Financial Summary Retail % Total % Total % LFL Retail % Total % Total Sales (1) Profit (2) 2007/08 Change Change Change 2007/08 Change Change (Reported) £m (Reported) (Constant £m (Constant currency) currency)UK 1,166 13.3% 13.3% 5.5% 35.4 61.6% 61.6%France 765 9.1% 11.0% 5.1% 39.7 (1.2)% 0.5%Rest of Europe (3) 278 34.8% 37.0% 21.7% 21.8 55.7% 55.7%Asia (4) 85 1.2% 9.2% (3.7)% (8.3) (7.8)% (15.3)%Total 2,294 13.5% 14.8% 6.7% 88.6 29.5% 29.9% (1) Joint Venture (JV) and Associate sales are not consolidated. (2) Retail profit is stated before central costs, exceptional items,acquisition intangibles amortisation and share of joint venture and associateinterest and tax. (3) Rest of Europe includes Poland, Italy, Spain, Ireland, Russia, Turkey JVand Hornbach in Germany. (4) Asia includes China, South Korea and Taiwan JV. • Group sales up 14.8% (LFL+6.7%), retail profit up 29.9%benefiting from favourable spring weather across Europe; • B&Q UK sales up 11.9% (LFL +5.9%) reflecting strong sales ofoutdoor products and kitchens; • French sales up 11.0% (LFL +5.1%), with outdoor and decorativeproducts performing well; • Rest of Europe sales up 37.0% (LFL+21.7%), boosted by a strongperformance in Poland; • Asia sales up 9.2% (LFL -3.7%) but adversely impacted by thetiming of promotions and national holidays; • Net debt at 5 May 2007 of £1.2 billion (3 February 2007: £1.3billion); • Net assets at 5 May 2007 of £4.5 billion (3 February 2007: £4.4billion). Gerry Murphy, Group Chief Executive, said: "Kingfisher delivered strong sales and profit growth in the first quarter asgood weather across Europe drove early seasonal demand for gardening and outdoorproducts. The year has started well, although it is still early days with thesummer outdoor season still to come. "Whilst the outlook for our international markets is generally positive, and weare pleased with progress on B&Q's development plan, we remain cautious on theUK market with demand for bigger home improvement projects likely to besensitive to interest rates." UK For the 13 weeks ended 5 May 2007* Retail Sales £m % Total % LFL Retail Profit £m % Total Change Change Change 2007/08 2006/07 2007/08 2006/07UK 1,166.3 1,029.2 13.3% 5.5% 35.4 21.9 61.6% UK includes B&Q in the UK, Screwfix Direct and Trade Depot. * Due to the 53rd week in UK reporting for 2006/07, changes in reported salesand profit compare 13 weeks ended 5 May 2007 with 13 weeks ended 29 April 2006as reported in 2006/07. On the same calendar basis, LFL was 9.8%. However, for better alignment, the actual reported change in LFL sales compares13 weeks ended 5 May 2007 to 13 weeks ended 6 May 2006. B&Q total sales increased 11.9% to £1,058 million (+5.9% LFL), with favourableweather stimulating early seasonal demand for gardening and outdoor products,sales of which grew over 20% year on year. Kitchen sales (*) were also ahead,reflecting orders taken during the major promotional event at the end of theprevious quarter. Gross margin percentage was flat, reflecting stronger sales of lower marginoutdoor seasonal products and kitchens sold on promotion. Retail profit increased by 82.2% to £32.8 million (2006/07: £18.0 million).Total cost growth for the full year remains in line with expectations. Results from the new format large stores continue to be encouraging with 20 nowtrading. Eight revamps were completed in Q1, and the next phase of eight revampswill start at the end of Q2. In addition, seven medium stores were revamped,two new medium stores were opened and two large stores were downsized. B&Q nowhas 114 large stores (20 in the modern format), 211 medium stores (of which 128have been modernised). * Kitchen sales are only recognised when delivered and not when originallyordered. UK TRADE Screwfix sales grew 25.9% to £103 million, driven by the Trade Counter roll-outprogramme. Retail profit decreased slightly, reflecting start-up costs for asecond distribution centre, which is due to open during the summer, and TradeCounter pre-opening costs. Fifteen new Trade Counters were opened in Q1,compared to six in the same quarter last year. Trials of the new Trade Depotformat continued with the opening of two new stores, taking the total trading tosix. FRANCE For the 13 weeks ended 5 May 2007 Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) ChangeFrance 764.6 700.9 9.1% 11.0% 5.1% Retail profit £m 2007/08 2006/07 % Change % Change (Reported) (Constant)France 39.7 40.2 (1.2)% 0.5% 2007/08 £1 =1.4775 euro; 2006/07 £1 = 1.4525 euro All percentage movements below are in constant currencies. Total sales grew 11.0% to £765 million (+5.1% LFL) with sales of gardening,outdoor projects and decorative products performing well. In a price competitivemarket, retail profit of £39.7 million was in line with last year after £9million of additional pre-opening and disruption costs. Castorama sales grew by 7.3% to £418 million (+4.8% LFL, +8.5% on a comparablestore basis). Decorative, garden and outdoor products performed well, boostedby new catalogues, new products and favourable weather. Heating sales at thestart of the quarter were weak in the mild conditions. Four Castorama revampswere completed during Q1 with a further two planned in the balance of the year.Stores trading in the new format continue to outperform. Brico Depot sales grew 15.7% to £347 million (+5.5% LFL), supported by nine morestores compared with Q1 last year and the publication of an additionalcatalogue. Three new stores opened during Q1 and work continued on convertingthe three Castorama stores closed during the fourth quarter last year inpreparation for their opening in the Brico Depot format. The new SAPinformation technology platform is now fully operational. REST OF EUROPE Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) ChangeRest of Europe 277.5 205.9 34.8% 37.0% 21.7% Retail profit £m 2007/08 2006/07 % Change % Change (Reported) (Constant)Rest of Europe 21.8 14.0 55.7% 55.7% Rest of Europe includes Poland, Italy, Spain, Ireland, Russia, Turkey JV andHornbach in Germany. Joint Venture and Associate sales are not consolidated. All percentage movements below are in constant currencies. Rest of Europe sales increased 37.0% to £278 million (+21.7% LFL) with 14 morestores trading compared to the same quarter last year. Retail profit grew 55.7%to £21.8 million, largely driven by strong sales in Poland. Sales for Castorama and Brico Depot in Poland were up 54.5% to £147 million(+39.6% LFL), with milder weather boosting an already buoyant constructionmarket. Castorama Italy sales increased 6.0% to £75 million (4.3% LFL) in anItalian retail market that continues to be generally weak. Trading at Brico Depot Spain and Castorama Russia was encouraging and Koctas inTurkey, a 50% joint venture, continued to perform well. The contribution fromKingfisher's 21% interest in Hornbach was in line with last year. During the first quarter, one store opened in Poland and in Turkey. ASIA Retail sales £m 2007/08 2006/07 % Change % Change % LFL (Reported) (Constant) ChangeAsia 85.1 84.1 1.2% 9.2% (3.7)% Retail profit £m 2007/08 2006/07 % Change % Change (Reported) (Constant)Asia (8.3) (7.7) (7.8)% (15.3)% Asia includes China, South Korea and Taiwan JV (sales not consolidated). All percentage movements below are in constant currencies. In Asia, the first quarter traditionally has the lowest sales in the year, withtrading affected by the variable timing of Chinese New Year and public holidays.In 2007, the traditionally busy weeks after the New Year holidays fell mainly inQ2 (Q1 in 2006). Total sales grew 9.2% (LFL down 3.7%) to £85 million withlosses slightly higher than last year at £8.3 million. B&Q China sales grew 7.0% (LFL down 4.0%), benefiting from nine more storestrading compared to the same quarter last year but impacted by holiday timings.Last year's strong LFL growth of 12% was boosted by discount activity onkitchen appliances and buying ahead of a tax change on flooring products,neither of which were repeated in 2007. Trading into Q2 is in line withexpectations. B&Q Taiwan, a 50% joint venture, delivered a small profit in a market thatcontinues to be affected by weak consumer confidence. In South Korea, whilstthe two trial stores were making progress, opening sufficient stores to achieveeconomic scale in a reasonable timeframe appeared unlikely. Accordingly, thebusiness, which has net assets of £8m, will close. 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 Further copies of this announcement can be downloaded from www.kingfisher.com orby application to: The Company Secretary, Kingfisher plc, 3 Sheldon Square,London, W2 6PX. Company Profile Kingfisher plc is Europe's leading home improvement retail group and the thirdlargest in the world, with over 740 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 andseven neighbouring countries. DATA BY COUNTRY as at 5 May 2007 Store numbers Selling space Employees (000s sq.m.) (FTE)B&Q 325 2,330 27,005UK Trade 59 24 2,470Total UK 384 2,354 29,475Castorama 98 972 12,747Brico Depot 84 448 5,515Total France 182 1,420 18,262Poland 36 299 6,547Italy 27 171 2,126Ireland 7 46 532Spain 10 51 566Russia 3 27 986Turkey JV 11 61 1,196Total Rest of Europe 94 655 11,953China 58 553 10,366Taiwan JV 21 97 1,833South Korea 2 12 181Total Asia 81 662 12,380Total 741 5,091 72,070 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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