REG - Kingfisher PLC - Q2 pre-close update <Origin Href="QuoteRef">KGF.L</Origin>

KingfisherAnnouncement

06/09/2014 20:29

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RNS Number : 1697N
Kingfisher PLC
24 July 2014 
 
Q2 pre-close update for the 10 weeks to 12 July 2014. 
 
Kingfisher reports total sales up 0.8% (-1.8% LFL) in constant currencies and 
 
confirms binding agreement reached with principal shareholders of Mr
Bricolage 
 
 Sales* In constant currencies  10 weeks to 12 July 2014  23 weeks to 12 July 2014  
                                % TotalChange             % LFL* Change             % TotalChange  % LFLChange  
 France*                        (1.4)%                    (2.2)%                    +1.1%          (0.2)%       
 UK & Ireland*                  +0.7%                     (1.3)%                    +7.0%          +4.7%        
 Other International*           +4.7%                     (1.8)%                    +9.5%          +2.1%        
 Total Group                    +0.8%                     (1.8)%                    +5.1%          +2.3%        
 
 
*Throughout this release '*' indicates first instance of a term defined or
explained in the glossary towards the end of this release. 
 
Sir Ian Cheshire, Kingfisher's Group Chief Executive, said: 
 
"Trading in our Q2 was always expected to be more difficult, annualising a
very strong Q2 performance last year and following this year's weather boosted
Q1. However, our markets in Q2, notably in June, have been slower than
anticipated particularly in France and Poland. It is unclear whether this
recent weakness is short term phasing in nature, though we will know more by
our interims in September having then traded through our key summer months. In
the meantime we are accelerating our self-help margin and cost initiatives to
help support our second half performance. 
 
"We are progressing well with the acquisition of Mr Bricolage, a leading
French home improvement retailer. I am delighted that this transaction, which
was announced in April, has now become binding and will progress to anti-trust
clearances. Adding a third, complementary strong business alongside Castorama
and Brico Dépôt will provide us with an attractive growth opportunity in our
most important market." 
 
Trading review for the 10 weeks (in constant currencies) 
 
FRANCE 
 
Total sales in France were down 1.4% (-2.2% LFL) in softer markets, up 1.1%
year to date (-0.2% LFL). Gross margin is expected to be up across Q2 compared
to the same period last year. 
 
Castorama total sales were down 1.6% (-0.9% LFL), up 0.7% year to date (+0.6%
LFL). According to provisional Banque de France* data, sales for the home
improvement market were down 1.4%, with a small positive in May (+0.3%)
reversing sharply in June (-4.3%). 
 
Brico Dépôt sales were down 1.3% (-3.8% LFL), up 1.5% year to date (-1.2%
LFL). Sales were impacted by a slower house building market, with new housing
starts and planning consent data* down around 20% and 16% respectively. 
 
UK & IRELAND 
 
Total sales in the UK & Ireland were up 0.7% (-1.3% LFL), up 7.0% year to date
(+4.7% LFL). Gross margin is expected to be up across Q2 compared to the same
period last year. 
 
B&Q total sales were down 2.5% (-3.2% LFL), up 4.3% year to date (+3.6% LFL).
In Q2 sales of outdoor and seasonal products were down almost 8%, representing
around 35% of total sales, impacted by both a strong performance in Q1 this
year (+30%) and in Q2 last year (+17%). Showroom sales (kitchens, bathrooms
and bedrooms) were down around 6% reflecting less promotional activity whereas
sales of indoor products, excluding showroom, were up almost 2%. 
 
Screwfix sales grew by 22.6% (+11.8% LFL), up 23.5% year to date (+11.9% LFL)
and is on track to have opened 12 new outlets during Q2, taking the total to
356. 
 
OTHER INTERNATIONAL 
 
Total sales in Other International grew by 4.7% (-1.8% LFL), up 9.5% year to
date (+2.1% LFL). 
 
Total sales in Poland were down 3.4% (-3.5% LFL), up 4.5% year to date (+3.9%
LFL). In Q2 to date, sales of outdoor and seasonal products were down almost
9%, representing around 20% of sales. Sales in these categories were impacted
by both a strong performance in Q1 this year (+36%) and in Q2 last year (+9%).
Sales of indoor products were down around 2%. Gross margin is expected to be
up across Q2 compared to the same period last year. 
 
Total sales in Russia grew by 15.7% (+12.0% LFL) whereas total sales in Spain
were up 12.2% (-7.3% LFL). In China total sales were down 9.2% (-9.3% LFL)
impacted by a slowing Chinese property market* which was down around 18%. 
 
MR BRICOLAGE UPDATE 
 
On 3 April 2014, Kingfisher announced it had entered into exclusive
negotiations with the principal shareholders of Mr Bricolage, the home
improvement retailer, to acquire their shareholding. 
 
On 2 April 2014, a non-binding memorandum of understanding was entered into,
marking the start of exclusive negotiations during which the operating
businesses of Mr Bricolage and of Kingfisher in France (Castorama and Brico
Dépôt) would meet with their respective works councils and would propose
improved commercial terms to the franchisees of Mr Bricolage. The outcome of
these negotiations has been successful and accordingly, a binding agreement
was entered into on 23 July 2014. 
 
The acquisition by Kingfisher of Mr Bricolage will now proceed subject to
anti-trust clearances. Subsequently, a mandatory offer will be made to acquire
the shares held by the minority shareholders at the agreed price per share of
E15, in accordance with applicable law. The remainder of the process is
expected to be completed around the end of Kingfisher's 2014/15 financial
year. 
 
CREATING THE LEADER 
 
Progress continued with Kingfisher's medium term development under the
following eight steps: 
 
EASIER 
 
1.   Making it easier for our customers to improve their home 
 
2.   Giving our customers more ways to shop 
 
COMMON 
 
3.   Building innovative common brands 
 
4.   Driving efficiency and effectiveness everywhere 
 
EXPAND 
 
5.   Growing our presence in existing markets 
 
6.   Expanding in new and developing markets 
 
ONE TEAM 
 
7.   Developing leaders and connecting people 
 
8.   Sustainability: becoming 'Net Positive' 
 
Further details on progress will be given with the interim results for the
half year ended 2 August 2014 on 10September 2014. 
 
Company Profile (as at the end of Q1 2014/15) 
 
Kingfisher plc is Europe's leading home improvement retail group and the third
largest in 
 
the world, with 1,134 stores in nine countries in Europe and Asia. Its main
retail brands are B&Q, Castorama, Brico Dépôt and Screwfix. Kingfisher also
operates the Koçtaş brand, a 50% joint venture in Turkey with the Koç Group. 
 
ENQUIRIES 
 
 Ian Harding, Group Communications Director  +44 (0) 20 7644 1029  
                                                                   
 Sarah Levy, Director of Investor Relations  +44 (0) 20 7644 1032  
                                                                   
 Nigel Cope, Head of Media Relations         +44 (0) 20 7644 1030  
                                                                   
 Clare Feast, Media Relations Manager        +44 (0) 20 7644 1286  
                                                                   
 Brunswick                                   +44 (0) 20 7404 5959  
 
 
Further copies of this announcement can be downloaded from www.kingfisher.com
or viewed on the Kingfisher IR iPad App available for free at the Apple App
store. 
 
We can also be followed on twitter @kingfisherplc with the Q2 results tag
#KGFQ2. 
 
Kingfisher American Depository receipts are traded in the US on the OTCQX
platform: 
 
(OTCQX: KGFHY) 
 
http://www.otcmarkets.com/stock/KGFHY/quote 
 
GLOSSARY (terms are listed in alphabetical order) 
 
Banque de France data for the two months to June 2014 was down 1.4% and
includes relocated and extended stores. 
 

ttp://webstat.banque-france.fr/fr/browseSelection.do?node=5384398&start=31/12/1992&end=31/05/2014&trans=N 
 
French property market 
 
New housing starts and planning consent data for the three months to May 2014
was down 20% and 16% respectively, according to the Ministry of Housing. 
 

ttp://www.statistiques.developpement-durable.gouv.fr/logement-construction/s/construction-logements.html 
 
Chinese property market 
 
New property transaction sales were down 18% for the three months to June 2014
for 17 cities in which B&Q China operates, according to the China Real Estate
Exchange. 
 
France consists of Castorama France and Brico Dépôt France. 
 
LFL stands for like-for-like sales growth which represents the constant
currency, year-on-year sales growth for stores that have been open for more
than a year. 
 
Other International consists of China, Poland, Romania, Russia, Spain,
Portugal, Germany and Turkey (Koçtaş JV). 
 
Sales 
 
All figures are on a constant currency basis. Group sales exclude Joint
Venture (Koçtaş JV) sales. Data is provided for the 10 and 23 weeks to 12 July
2014, with the exception of China, Romania and Russia which are reported for
the 13 and 26 weeks to 30 June 2014. 
 
UK & Ireland consists of B&Q in the UK & Ireland and Screwfix in the UK. 
 
FORWARD-LOOKING STATEMENTS 
 
This announcement contains certain statements that are forward-looking and
which should be considered, amongst other statutory provisions, in light of
the safe harbour provisions of the United States Private Securities Litigation
Reform Act of 1995. All statements other than statements of historical facts
may be forward-looking statements. Such statements are, therefore, subject to
risks, assumptions and uncertainties that could cause actual results to differ
materially from those expressed or implied because they relate to future
events. These forward-looking statements include, but are not limited to,
statements relating to the Company's expectations around the Company's
programme known as 'Creating the Leader' and its associated eight steps.
Forward-looking statements can be identified by the use of relevant
terminology including the words: "believes", "estimates", "anticipates",
"expects", "intends", "plans", "goal", "target", "aim", "may", "will",
"would", "could" or "should" or, in each case, their negative or other
variations or comparable terminology and include all matters that are not
historical facts. They appear in a number of places throughout this press
release and include statements regarding our intentions, beliefs or current
expectations and those of our officers, directors and employees concerning,
amongst other things, our results of operations, financial condition, changes
in tax rates, liquidity, prospects, growth, strategies and the businesses we
operate. Other factors that could cause actual results to differ materially
from those estimated by the forward-looking statements include, but are not
limited to, global economic business conditions, monetary and interest rate
policies, foreign currency exchange rates, equity and property prices, the
impact of competition, inflation and deflation, changes to regulations, taxes
and legislation, changes to consumer saving and spending habits; and our
success in managing these factors. Consequently, our actual future financial
condition, performance and results could differ materially from the plans,
goals and expectations set out in our forward-looking statements. We urge you
to read our annual report and other company reports, including the risk
factors contained therein, for a more detailed discussion of the factors that
could affect our future performance and the industry in which we operate.
Reliance should not be placed on any forward-looking statement. Our forward
looking statements speak only as of the date of this press release and the
Company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise.
Nothing in this press release should be construed as a profit forecast. 
 
This information is provided by RNS
The company news service from the London Stock Exchange