Kingfisher Q3 trading update – 0.7% decline in LFL for UK operations

Kingfisher PLC reports Q3 total sales up 4.6% (+1.3% LFL), retail profit up 13.9%

Highlights (constant currencies):
• Group total sales up 3.5%
• Group retail profit up 13.1%
• 27 of 29 acquired ex-Focus DIY stores open and trading well
• Net cash of £14 million (30 July 2011: net debt of £186 million)

Kingfisher UK & Ireland:
Total sales were up 1.2% to £1,064 million (-0.7% LFL) with both B&Q and Screwfix achieving sales growth in a continuing challenging consumer environment. Retail profit grew by 21.7% reflecting the sales growth, an improved gross margin and cost initiatives.

B&Q UK & Ireland’s total sales grew by 0.4% (-0.9% LFL) to £928 million. Warm autumn weather boosted sales of outdoor seasonal products (up around 12%) with garden furniture sales (‘Blooma’ group-wide common range) up 68%. Sales also benefitted from the closure of Focus DIY in Q2. During Q3, 27 of the 29 recently acquired ex-Focus DIY stores were converted into the B&Q format, and are trading well. Non-seasonal product sales were down around 4% reflecting the generally weak consumer backdrop. The new in-store trade-only ‘TradePoint’ offer continues to grow and attract new trade professional
customers with over 700,000 registered by the end of Q3.

Retail profit grew by 20.6% to £46 million. Gross margin was up 50 basis points against tough comparatives (2010/11: +110 basis points) driven by sales of higher margin products and more direct sourcing. A strong focus on operating cost efficiencies also continued with costs as a percentage to sales held broadly flat, benefiting from less range review activity in Q3 compared to last year, when B&Q underwent a major review of all building ranges in the main store to support last year’s roll out of ‘TradePoint’.

Ian Cheshire, Group Chief Executive, said:

“Our well-established programme of self-help initiatives (‘Delivering Value’) has continued
to drive our growth despite these difficult times for European consumers. I am pleased that our teams’ hard work has resulted in healthy sales growth and a 13% profit growth in our third quarter, one of our most significant trading periods of the year, particularly in France.

“Looking ahead, the short-term outlook in our major markets remains challenging but Kingfisher is in good shape, and we are more able to drive market share gains, profit growth and higher cash returns. I’m enthusiastic about our longer-term prospects and the team here is excited about formally launching the second phase of self-help initiatives next year (‘Creating the Leader’) to drive more growth and shareholder value over the coming years.”

Please view the full release here: www.insightdiy.co.uk/articles.asp

Source : Kingfisher PLC
www.kingfisher.com/files/results/2011/q3_11/q3_trading_update.pdf