Kingfisher reports 'tough fourth quarter'

Kingfisher reports total Q4 sales up 1.5% for the 14 weeks to 2 February 2013 versus the 13 week period last year.

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On a comparable 13 week basis sales were down 1.0% in constant currencies, LFL -3.4%. Expects full year adjusted profit before tax to be in line with the consensus of analyst expectations.

In the UK & Ireland Kingfisher reports each financial year up to the nearest Saturday to 31 January. This year this has resulted in a 53 week year and a 14 week Q4. Outside the UK, figures are on a calendar month basis. Joint Venture (Koçtas and Associate (Hornbach) sales are not consolidated.

Commenting on trading, Ian Cheshire, Group Chief Executive, said:

“We have had a tough fourth quarter, ending what has been a tough year impacted by unfavourable foreign exchange, particularly poor weather in the UK and weaker consumer confidence in our major markets. Thanks to the hard work of our teams and our established programme of self-help initiatives, we end the year in good shape with a strong balance sheet and higher market share. We also made good progress with our new 'Creating the Leader' programme which aims to help our customers have better and more sustainable homes.”

“Looking ahead we will continue to actively manage the business in these challenging markets with particular focus on improving our customer offer, optimising our cash generation and delivering shareholder value.”

All figures and comments below refer to the quarter in constant currencies:

UK & IRELAND
B&Q total sales for the 14 weeks were £842 million, down 6.4% on a comparable 13 week basis, (-6.4% LFL) reflecting the generally weak consumer backdrop in the UK and a particularly challenging environment in Ireland where our nine stores are now subject to an Examinership process. Gross margins are expected to be down reflecting a higher mix of trade sales and some additional promotional activity in December in a more discount led period for general retailers.

Screwfix total sales for the 14 weeks were £155 million, up 10.3% on a comparable 13 week basis, benefiting from the continued roll out of new outlets and the success of ‘click, pay & collect’.

FRANCE
Castorama total sales increased by 1.5% to £494 million (-0.4% LFL) with sales benefiting from the innovative ‘Do-it-Smart’ approach aimed at making home improvement projects easier for customers. Brico Dépôt, which more specifically targets trade professionals and heavy DIYers, continued to be impacted by a slower building market, with total sales down by 3.0% to £413 million (-4.6% LFL). Gross margins in France are expected to be down reflecting weaker volumes and some price investment in a slower market across both businesses.

OTHER INTERNATIONAL
In Poland and Spain sales grew reflecting new store space, however both markets were impacted by weak consumer confidence. In Poland total sales grew by 0.2% to £228 million (-4.3% LFL) and in Spain, Brico Dépôt sales grew by 2.7% to £46 million (-10.6% LFL).

In Russia sales grew by 20.4% in a strong market to £102 million (+12.1% LFL) benefiting from new store openings and in China B&Q sales grew by 3.9% (+5.0% LFL) to £110 million driven by continued additional promotional discount activity and an improving property market.

Kingfisher’s full year results will be announced on 26 March 2013, along with a progress update for the first year of the ‘Creating the Leader’ programme.

Source : Kingfisher PLC
www.kingfisher.co.uk/index.asp?pageid=260