Screwfix sales rise 9.8% while B&Q reports a 3.6% decline

Kingfisher UK & Ireland total sales were down 2.0% to £4.3 billion (-5.2% LFL) in a declining market impacted by weak consumer confidence and record adverse summer weather. Retail profit declined by 13.8% to £234 million.

B&Q UK & Ireland’s total sales were down 3.6% (-5.6% LFL) to £3.7 billion reflecting the difficult UK backdrop and a particularly challenging environment in Ireland, where our nine stores incurred losses of £7 million and are now subject to an Examinership process.

The market for the UK’s leading home improvement retailers was down around 3%, including seasonal ranges down 9%. On a comparable basis, B&Q outperformed the market, with sales down around 2%.

Sales of outdoor seasonal products were down around 9% with average footfall down 20% in the severely weather-affected weeks. Sales of building products were also impacted by the adverse weather. Sales of indoor decorative products fared better as customers switched some of their home improvement activities indoors. Cash sales of showroom (kitchens, bathrooms and bedrooms) products were slightly higher year on year, showing that the new Every Day Low Prices (EDLP) trading strategy in this category is starting to gain traction with customers in a challenging market.

Retail profit declined by 20.8% to £187 million. Gross margins were down 20 basis points, with the benefits from on-going self-help initiatives offset by some additional promotional activity, the decision to accelerate clearance ahead of the national rollout of new ranges of tiling and décor products, and a higher mix of ‘TradePoint’ sales.

TradePoint continues to progress well. Sales to TradePoint customers were up around 20% and now account for nearly 20% of total store sales. Over 1.2 million customers have now registered as TradePoint customers, with around a third having shopped in the last month.

A strong focus on operating cost efficiencies continued. Costs also reflect lower levels of variable pay this year and the benefit of a settlement of a one-off construction related claim for around £5 million.

Screwfix grew total sales by 9.8% to £577 million, despite the challenging smaller tradesman market, benefiting from the continued rollout of new outlets, the success of ‘click, pay & collect’ and a redesigned catalogue. Sixty new outlets were opened, taking the total to 275.

Retail profit was up 33.9% to £47 million, reflecting the strong sales growth, gross margins benefiting from on-going self-help initiatives and continued tight cost control.

UK reporting:
B&Q and Screwfix are increasingly operating together, sharing a distribution network, jointly developing several major initiatives including omnichannel, the provision of energy efficiency products and services and adopting a complementary strategy for UK growth. As a result, from next year (2013/14) reporting in the UK will mirror our current practice in France and provide one overall profit figure along with a commentary on the sales performance of each major business.

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Source : Kingfisher
www.kingfisher.co.uk