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Kingfisher reports 'solid early progress on the journey to ‘ONE’ Kingfisher'

Kingfisher - better homes, better lives

Kingfisher has reported interim results for the half year ended 1 August 2015, advising of 'solid early progress on the journey to ‘ONE’ Kingfisher'.

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• Total adjusted sales in constant currencies up 3.5% (France +1.1%; UK & Ireland +4.6%; Other International +5.7%)
• Retail profit in constant currencies up 5.0% (France (5.7)%; UK & Ireland +16.8%; Other International +3.0%)
• Adjusted pre-tax profit of £384m driven by strong UK profit growth, offset by £29m adverse foreign exchange movements on the translation of non-sterling profits 
• £160m returned to date via a share buyback since year end (44.7m shares), part of the previously announced £200m due to be returned during FY 2015/16

CUSTOMER & OFFER:
Good early progress in unifying our offer
• First wave of unifying our ‘core essential’ ranges to land in stores next year

RETAIL OPERATIONS:
Space - rationalisation on track; announcing Screwfix UK expansion
• On track to close c.15% B&Q surplus space by end of FY 2016/17 (c.60 stores) in over-spaced catchments; exit of leases secured on 26 of the stores
• Announced closure of 2 stores in France and 1 in Russia
• Announcing potential for a further 200 Screwfix UK outlets from 412 today; Screwfix Germany trial on track

INFRASTRUCTURE & PROCESSES:
Programme to unify Goods Not For Resale (GNFR*) underway
• First wave of unified spend (£350m) on track to land next year 

Unified IT platform, key enabler of ‘ONE’ Kingfisher on track
• Ireland pilot started on time and working well
• Announcing acceleration of rollout (to complete by end of FY 2018/19)

PEOPLE:
Finalised leadership team with appointment of Chief People Officer

Kingfisher UK & Ireland
Kingfisher UK & Ireland sales were up 4.6% (+3.3% LFL) to £2,527 million benefitting from a stronger UK economy and a more buoyant housing construction market. Retail profit grew by 16.8% to £194 million. Gross margins were flat. Tight cost control continued driven by ongoing productivity initiatives at B&Q.

B&Q total sales increased slightly by 0.2% (+0.7% LFL) to £2,033 million. Sales of outdoor seasonal products were down 2.3% while sales of indoor products, excluding showroom, were up 3.6%. Sales of showroom products were down 2.4% driven by the decision to reduce promotional activity and instead offer customers ‘Every Day Great Value’, which, in kitchens, is now gaining momentum.

B&Q has been working on driving productivity benefits across the business since last year. Various initiatives have been introduced including ‘store friendly deliveries’ (making it quicker and easier for store staff to replenish) and roller checkouts (improving customer experience as well as scanning and database accuracy). These projects were completed during the summer.

B&Q launched ‘Click, Pay & Collect’ on over 14,000 products last year with the release of the new diy.com. Total transacted online sales, including home delivery, continued to make good progress.

Screwfix

Screwfix grew total sales by 27.9% (+16.5% LFL) to £494 million, driven by strong growth from the specialist trade desks exclusive to plumbers and electricians within Screwfix outlets, strong digital and mobile growth, new and extended ranges, alongside the continued roll out of new outlets. 17 net new outlets were opened, taking the total to 412. Screwfix remains on track to open 60 outlets in FY 2015/16.

Véronique Laury, Chief Executive Officer, said:

“I am pleased that we have delivered a solid first half of the year and have made good early progress with our ‘ONE’ Kingfisher plan. This plan will unlock our potential through organising ourselves very differently in order to create a single, unified company where customer needs come first.

“We have been working at pace on our set of first ‘sharp’ decisions. I am particularly excited to see the first wave of unified ‘core essential’ ranges landing in stores next year. This is being led by Arja Taaveniku, our Chief Offer & Supply Chain Officer, who joined the team in May. Furthermore, I am also delighted with the pilot of our unified IT system in Ireland, which we are now able to accelerate across Kingfisher given the success so far. This will be a key enabler of our ‘ONE’ Kingfisher journey.

“There remains a lot to be done however. Our leadership team is now complete and we are continuing to develop our detailed plans at pace as we progress on this exciting journey. We look forward to updating on further progress along the way.”

Karen Witts, Chief Financial Officer, said:

“We continue to believe our plans will drive an increase in the value of our business for shareholders, whilst at the same time optimising the generation and use of cash.

“Our balance sheet remains strong, enabling us to continue investing for growth and to return so far this year, £160 million via share buyback. We are also today announcing growth in the interim dividend, ahead of earnings, reflecting our confidence in our medium term prospects. In addition, I am pleased with the progress made to exit most of the B&Q stores earmarked for closure this year, which will in time strengthen our balance sheet and maintain our financial flexibility.

“In the short term, whilst we remain encouraged by the macroeconomic backdrop in the UK, we remain cautious on the outlook for France.”

Source : Kingfisher PLC
www.kingfisher.com/

14 September 2015

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