B&Q's like-for-like sales decline by 2.5% in H1

Kingfisher has reported on half year results for the 6 months ended 31 July 2018 (Year 3 of its 5 year transformation).

Highlights include:

At halfway point of 5 year transformation plan - continuing to deliver on strategic milestones

• Unified & unique offer: unified 42% of product (cost of goods sold). H1 sales (+2.2%) and gross margin continued to grow

• Digital: Rollout of new unified IT platform now underway in all remaining operating companies, digital sales* now 6% of Group (5% last year)

• Operational efficiency: £14m of benefits in H1, (£72m to date), on track for £30m in FY18/19 H1 18/19 Group results:

• Solid performances in the UK and Poland offset by significant weakness in France*

• H1 Group gross margin -40bps impacted by logistics & stock inefficiencies mainly in France; Q2 gross margin ahead of Q1

• Balance sheet remains strong:
- Working capital inflow of £77m with mitigation stock reducing by c.£90m
- Returned £250m of cash to shareholders (£160m via ordinary dividend; £90m via share buyback) FY 18/19 and beyond:

• For the third year in a row, on track to deliver strategic milestones

• Actions to support H2 performance in France underway

• Expect to grow Group gross margin after clearance in FY18/19

• Remain committed to delivering ONE Kingfisher transformation benefits

Kingfisher UK & Ireland

Kingfisher UK & Ireland sales increased 1.3% (-0.5% LFL) to £2,635 million within the context of a continuing weak consumer backdrop. Retail profit grew by 1.2% to £218 million. Gross margin was down 30 basis points mainly reflecting operating company mix and increased logistics costs at Screwfix due to the opening of a new distribution centre. This was largely offset by continued cost control.

B&Q

B&Q's total sales declined by 2.3% to £1,833 million. LFL sales declined by 2.5%. LFL sales of weather-related categories increased by 4.9% while sales of non-weather-related categories, including showroom, were down 5.4%.

B&Q’s total online sales, continued to make good progress with sales growing by 8% (including growth in click & collect sales of 56% and growth in mobile sales of 41%) and represent 4% of total sales.

Screwfix

Screwfix grew total sales by 10.4% (+4.5% LFL) to £802 million, driven by specialist trade desks exclusive to plumbers and electricians, strong digital growth of 18% (e.g. mobile + 43%; click & collect +21%); and the continued roll out of new outlets. 21 new outlets were opened in H1, taking the total to 598. Our overall target is to have around 700 outlets in the UK.

News on Kingfisher's overseas performance can be found here. 

Kingfisher's half-year results presentation can be found here. 

Véronique Laury, Chief Executive Officer, said:

“The extent and pace of change in the retail sector is profound. We saw these changes and acted early. We’re now halfway through our ONE Kingfisher transformation and we are well on our way to becoming a truly customer led, digital, and efficient business.

“Transformation on this scale is tough, and there are challenges that we’re working through. There is still much to do to improve our performance in France and to remove inefficiencies within the business as we continue to transform at pace. I am confident that we have the right plan and the opportunity for Kingfisher is significant.

“Our H1 results reflect a solid performance in the UK and Poland whilst France remains difficult. Looking to the full year we remain on track to deliver our strategic milestones for the third year in a row and have put actions in place to support our performance. The outlook for our main markets continues to be mixed.

“We firmly believe in the transformation plan benefits and maintain our ambition. The environment is making our task more difficult than expected and we will always take the right decisions for the company in the long-term.”

To view the publications in full, follow the links below:

Kingfisher half year results publication - part one

Kingfisher half year results publication - part two 

Source : Insight DIY Team and Kingfisher

Image : Chris Warham / Shutterstock 242222707 

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