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Kingfisher PLC KGF 3rd Quarter Results

  Kingfisher PLC (KGF) - 3rd Quarter Results

RNS Number : 2670S
Kingfisher PLC
29 November 2012




                                      

   Kingfisher reports Q3 retail profit of £257 million, up 0.1% in constant
             currencies, and sales of £2.7 billion, down 2.8% LFL



Group Financial Summary (13 weeks ended 27 October 2012)



                                                 Retail                    
                                                     Profit
                Sales    % Total   % Total     % LFL            % Total   % Total
              2012/13     Change    Change    Change 2012/13     Change    Change
                                                             (Reported)
                   £m (Reported) (Constant (Constant     £m            (Constant
                                 currency) currency)                    currency)
France          1,081     (9.3)%    (0.8)%    (2.8)%     140     (9.2)%    (1.0)%
UK & Ireland    1,055     (0.8)%    (0.7)%    (3.8)%      59       5.7%      5.5%
Other             569       1.9%      6.8%    (0.8)%      58     (8.2)%    (2.4)%
International
Total Group     2,705     (3.9)%      0.8%    (2.8)%     257     (5.9)%      0.1%



Note: Joint Venture (Koçtaş) and Associate (Hornbach) sales are not
consolidated. Retail profit is operating profit stated before central costs,
exceptional items, amortisation of acquisition intangibles and the Group's
share of interest and tax of JVs and Associates.





Highlights in constant currencies:



· Group total sales up 0.8% driven by growth in the Other International
division where Kingfisher recently opened its 1,000^th store

· Group retail profit slightly up, supported by on-going self-help
initiatives. (On a reported basis retail profit was adversely impacted by £16
million due to translating euro and zloty overseas profits into sterling)

· Net cash was £222 million (28 July 2012: net cash of £29 million)
reflecting peak trading patterns, tight cash control and some capital
expenditure projects now scheduled to fall in the next financial year





Ian Cheshire, Group Chief Executive, said:



"Following a particularly tough first half, I am pleased that our teams' hard
work has delivered a solid profit performance in our third quarter, one of our
most significant trading periods in the year. Our markets remain challenging,
with consumer confidence still weak and so we maintain our strong focus on
margin, costs and cash.



"Kingfisher is in good shape and I remain enthusiastic about our longer-term
prospects under our new 'Creating the Leader' programme which will establish
us as a world class retailer at helping customers have better and more
sustainable homes."





Q3 TRADING REVIEW BY MAJOR GEOGRAPHY



FRANCE



Sales £m 2012/13 2011/12   % Change   % Change  % LFL
                         (Reported) (Constant) Change
France     1,081   1,191     (9.3)%     (0.8)% (2.8)%



Retail profit £m 2012/13 2011/12   % Change   % Change
                                 (Reported) (Constant)
France               140     154     (9.2)%     (1.0)%



France comprises Castorama and Brico Dépôt



All trading commentary below is in constant currencies



Kingfisher France

According to provisional Banque de France data, which excludes the heavier
trade market, comparable store sales for the home improvement market ^(1) were
down 2.5% in the quarter. Kingfisher France outperformed the market, with
comparable store ^(1) sales declining by 1.6% (-2.8% LFL). Across both
Castorama and Brico Dépôt, one net new store was opened and one was revamped,
adding around 2% of new space compared to Q3 last year.



Despite the weaker market, the decline in retail profit was limited to 1.0% to
£140 million supported by higher gross margins (+70 basis points) and
operating cost efficiencies including lower performance related bonuses.



Castorama total sales grew by 1.7% to £590 million (-0.9% LFL, +1.3% on a
comparable store basis) supported by the innovative 'Do-it-Smart' approach
aimed at making home improvement projects easier for customers. Sales of
outdoor seasonal products were down around 2%. Sales of indoor and building
products were slightly down with sales of new kitchen and joinery ranges
performing particularly well.

Brico Dépôt, which more specifically targets trade professionals and heavy
DIYers, was impacted by the slower house building market, with new housing
starts and planning consent data ^(2) down for the last three months. Total
sales declined by 3.6% to £491 million (-4.9% LFL). New ranges introduced last
year (e.g. heating and joinery ranges) performed well (+1% LFL).



^(1)Banque de France data is based  on comparable store data, which  includes 
relocated and extended stores

^(2)Service de l'observation et des statistiques October 2012

^

UK & IRELAND



Sales £m     2012/13 2011/12   % Change   % Change  % LFL
                             (Reported) (Constant) Change
UK & Ireland   1,055   1,064     (0.8)%     (0.7)% (3.8)%



Retail profit £m 2012/13 2011/12   % Change   % Change
                                 (Reported) (Constant)
UK & Ireland          59      56       5.7%       5.5%



UK & Ireland comprises B&Q in the UK & Ireland, Screwfix and the UK 'Eco'
initiative



All trading commentary below is in constant currencies



Kingfisher UK & Ireland

Total sales declined by 0.7% to £1,055 million (-3.8% LFL) in a continuing
challenging consumer environment. Retail profit however grew by 5.5% to £59
million driven by a higher gross margin and continued cost initiatives.



B&Q UK & Ireland'stotal sales declined by 2.3% to £906 million (-4.0% LFL)
reflecting the generally weak consumer backdrop in the UK and a particularly
challenging environment in Ireland. Retail profit grew by 1.7% to £45 million
benefiting from higher gross margins (up 50 basis points) and operating cost
efficiencies including lower bonus provisions.



Screwfix grew total sales by 10.9% to £149 million, despite the continued
challenging trading conditions in the smaller tradesman market ^(1),
benefiting from the continued roll out of new outlets, the success of 'click,
pay & collect' and a redesigned catalogue. Twelve outlets were opened during
Q3, taking the total to 252. Retail profit was up 19.8% to £14 million,
boosted by the strong sales growth, higher gross margins and continued tight
cost control.





^(1) Based on the Builders' Merchants Federation lightside trade data
July-September 2012





OTHER INTERNATIONAL



Sales £m            2012/13 2011/12   % Change   % Change  % LFL
                                    (Reported) (Constant) Change
Other International     569     559       1.9%       6.8% (0.8)%



Retail profit £m    2012/13 2011/12   % Change   % Change
                                    (Reported) (Constant)
Other International      58      63     (8.2)%     (2.4)%



Other International comprises Poland, China, Spain, Russia, Turkey JV and
Hornbach in Germany. Joint Venture (Koçtaş) and Associate (Hornbach) sales are
not consolidated

All trading commentary below is in constant currencies



Other International total sales increased by 6.8% to £569 million (-0.8% LFL)
supported by new store openings and strong growth in Russia, now the second
largest business in this division. However, with the exception of Russia, the
uncertain European economic backdrop continued to impact LFL sales. Retail
profit declined 2.4% to £58 million.



During Q3, three net new stores opened, all in Poland, adding around 7% new
space compared to Q3 last year. 



Sales in Poland were down 1.9% (-7.3% LFL) to £288 million reflecting an
on-going weak market and less marketing activity compared to last year. Gross
margins were down 30 basis points, with sourcing benefits offset by some
investment in pricing. Tight cost control partially offset cost inflation
resulting in a 7.9% decline in retail profit to £34 million.



In Russia, sales were up 40.4% in a strong market to £126 million (+21.3% LFL)
benefiting from new store openings. Retail profit more than doubled to £9
million. In Turkey, Kingfisher's 50% JV, Koçtaş, grew sales by 4.0% (-4.0%
LFL) to £89 million as new store openings were offset by a slower economic
backdrop. Retail profit contribution was £3 million, down 17.4% year on year.
In Spain sales were up 5.2% (-8.5% LFL) to £59 million driven by new store
openings. Retail profit was down to £1 million, reflecting a difficult market.
Hornbach, in which Kingfisher has a 21% economic interest, contributed a
broadly flat £14 million to retail profit. 



B&Q China sales grew 2.6% to £96 million (+3.5% LFL) driven by additional
promotional discount activity. Retail loss was £3 million reflecting higher
marketing costs, £1 million lower sublet rental income on vacant store space
and around £0.5 million of costs relating to the previously announced new
format trial.





COUNTRY DATA

As at 27 October 2012



                          Store numbers Selling space Employees

                                         (000s sq.m.)     (FTE)
Castorama                           103         1,082    11,268
Brico Dépôt                         104           576     6,864
Total France                        207         1,658    18,132
B&Q UK & Ireland                    358         2,572    21,941
Screwfix                            252            19     3,632
Total UK & Ireland                  610         2,591    25,573
Poland                               70           513    10,921
China                                39           326     4,491
Spain                                20           116       982
Russia                               19           170     2,509
Turkey JV                            37           194     3,313
Total Other International           185         1,319    22,216
Total                             1,002         5,568    65,921





YEAR TO DATE BY MAJOR GEOGRAPHY - 39 weeks ended 27 October 2012



                                                 Retail                    
                                                     Profit
                Sales    % Total   % Total     % LFL            % Total   % Total
              2012/13     Change    Change    Change 2012/13     Change    Change
                                                             (Reported)
                   £m (Reported) (Constant (Constant     £m            (Constant
                                 currency) currency)                    currency)
France          3,287     (7.0)%      0.5%    (1.3)%     331     (6.8)%      0.7%
UK & Ireland    3,319     (1.5)%    (1.4)%    (5.0)%     204    (14.1)%   (14.1)%
Other                                                                     
International
                1,577       0.2%      7.1%    (0.9)%     125    (18.2)%    (9.7)%
  Total Group   8,183     (3.5)%      0.9%    (2.8)%     660    (11.5)%    (6.3)%



2012/13: £1 = 1.24 euro (2011/12: 1.14)

2012/13: £1 = 5.16 Polish zloty (2011/12: 4.65)

2012/13: £1 = 10.02 Chinese renminbi (2011/12: 10.44)

2012/13: £1 = 49.10 Russian rouble (2011/12: 46.61)



Note: Joint Venture (Koçtaş) and Associate (Hornbach) sales are not
consolidated. Retail profit is operating profit stated before central costs,
exceptional items, amortisation of acquisition intangibles and the Group's
share of interest and tax of JVs and Associates.





Company Profile:



Kingfisher plc is Europe's leading home improvement retail group and the third
largest in the world, with over 1,000 stores in eight countries in Europe and
Asia. Its main retail brands are B&Q, Castorama, Brico Dépôt and Screwfix.
Kingfisher also has a 50% joint venture business in Turkey with Koç Group, and
a 21% interest in, and strategic alliance with Hornbach, Germany's leading
large format DIY retailer.



CREATING THE LEADER



Progress continued with the next phase of our medium term development under
the following eight steps:



EASIER

1. Making it easier for our customers to improve their home

2. Giving our customers more ways to shop



COMMON

3. Building innovative common brands

4. Driving efficiency and effectiveness everywhere



EXPAND

5. Growing our presence in existing markets

6. Expanding in new and developing markets



ONE TEAM

7. Developing leaders and connecting people

8. Sustainability: becoming 'Net Positive'



Further details on progress will be given with the preliminary results for the
year ended 2 February 2013.



FINANCIAL POSITION
No material events or transactions impacting the Group's strong financial
position have taken place since the previously announced unaudited balance
sheet as at 28July 2012.



ENQUIRIES:



Ian Harding, Group Communications Director 020 7644 1029
Sarah Levy, Head of Investor Relations     020 7644 1032
Nigel Cope, Head of Media Relations        020 7644 1030
Matt Duffy, Investor Relations Manager     020 7644 1082
Clare Haines, Media Relations Officer      020 7644 1286
Brunswick                                  020 7404 5959



Further copies of this announcement can be downloaded from www.kingfisher.com
or viewed on the Kingfisher IR iPad App available for free at the Apple App
store.

We can also be followed on twitter @kingfisherplc.





Forward-looking statements



This press release contains certain forward-looking statements, which should
be considered, amongst other statutory provisions, in light ofthe safe
harbour provisions of the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical facts may be
forward-looking statements. Such statements are, therefore, subject to risks,
assumptions and uncertainties that could cause actual results to differ
materially from those expressed or implied because they relate to future
events. Reliance should not be placed on any forward-looking statement. Our
forward-looking statements speak only as of the date of this press release and
the Company undertakes no obligation to update any forward-looking statement
publically, whether as a result of new information, future events or
otherwise. Nothing in this press release should be construed as a profit
forecast.



Please refer to page 104 of the Annual Report and Accounts 2011/12 for further
details and definitions concerning forward-looking statements and how they
should be considered.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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