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Kingfisher Plc on track to deliver strategic milestones

Kingfisher Plc (LON:KGF), today announced Q2 trading update to 31 July 2018.

Financial highlights

 

 

Sales

2018/19

% Total

Change

% LFL(1)Change

£m

Reported

Constant currency

Constant currency

UK & Ireland   

1,412

+6.0%

+6.0%

+4.2%

– B&Q UK & Ireland

1,005

+3.9%

+3.9%

+3.6%

– Screwfix

407

+11.8%

+11.8%

+5.5%

France

1,193

+0.4%

(0.7)%

(1.0)%

– Castorama

648

(3.1)%

(4.1)%

(3.8)%

– Brico Dépôt

545

+4.8%

+3.7%

+2.6%

Other International

650

+3.6%

+5.6%

+1.4%

– Poland

388

+1.8%

+2.5%

+1.3%

– Iberia (2)

102

+0.8%

(0.3)%

(0.3)%

– Russia

99

(10.9)%

(1.1)%

+2.1%

– Romania (3)

58

+79.5%

+80.8%

+4.6%

– Screwfix Germany

 

3

+21.6%

+20.4%

+20.4%

Total Group

3,255

+3.4%

+3.4%

+1.6%

· Q2 Group LFL up 1.6% helped by improved performance of weather-related categories which contributed c.+2% to Group LFL; H1 LFL -1.1% (Q1 LFL -4.0%)

· Good Q2 sales recovery at B&Q and Screwfix versus Q1 within the context of a continuing weak UK consumer backdrop

· Sales and gross margin of unified and unique ranges continued to grow

· H1 Group gross margin after clearance costs expected to be c.-40bps with Q2 ahead of Q1

· Actions in place to improve H2 Group gross margin and therefore still expect to grow the full year Group gross margin after clearance costs

· France performance in H1 reflects:

o Weaker footfall and impact of transformation-related activity at Castorama

o Continued sales growth at Brico Dépôt benefitting from new unified ranges

o Higher costs (c.+3.5% in constant currency) including phasing of marketing investment in Brico Dépôt

· £90m returned (30m shares) year to date via share buyback. Now returned £550m of c.£600m capital return commitment (4)

Kingfisher, Véronique Laury, Chief Executive Officer, said:

“We started our transformation two and a half years ago and are on track to deliver our strategic milestones for the third year in a row.

“In Q2, I’m pleased that we grew our sales after the exceptionally harsh weather conditions in Q1. In B&Q, Screwfix and Brico Dépôt France we delivered good sales growth. However, the performance of Castorama France has been more difficult and as a result we have put additional actions in place to support our full year performance in France with the benefits expected to come through in H2.

“We look forward to providing a more detailed update at our H1 results in September.”