TIDMKGF
RNS Number : 3445M
Kingfisher PLC
23 May 2022
Kingfisher plc
Q1 trading update to 30 April 2022
Strong performance versus pre-pandemic levels; 3-year LFL
+16.2%
23 May 2022: Kingfisher plc ('Company', 'Group' or 'Kingfisher')
is today providing its Q1 22/23 sales.
Key points
-- Sales significantly ahead of pre-pandemic performance (3-year
LFL +16.2%), supported by strong market share gains
-- Sales of GBP3.2bn in line with our expectations (total sales
-4.2% in constant currency and LFL -5.4%)
-- Good momentum into the second quarter with 3-year LFL +21.8%,
and LFL -2.5% for the 2 weeks to 14 May 2022 including a c.1%
adverse calendar impact
-- Resilient demand from both DIY and DIFM/trade segments
-- Omni-channel engagement remains high with e-commerce sales
3-year growth of 164%; representing 16% of Group sales (Q1 19/20:
7%)
-- Continuing to manage inflation pressures effectively
-- Good product availability, approaching pre-pandemic levels
-- Full year guidance reiterated; anticipate FY 22/23 adjusted pre-tax profit of c.GBP770m
-- Announcing return of a further GBP300m of surplus capital via
a share buyback programme; first tranche to commence soon
Unaudited Q1 22/23 sales (three months ended 30 April 2022)
Sales % Total % Total % LFL % 3-year LFL
2022/23 Change Change Change(1) Change(2)
------------------------- --------- --------- ------------------ ------------------ ------------------
GBPm Reported Constant currency Constant currency Constant currency
UK & Ireland 1,568 (14.2)% (14.1)% (15.8)% +16.7%
- B&Q 996 (17.8)% (17.8)% (18.3)% +16.3%
- Screwfix 572 (7.1)% (7.0)% (10.9)% +18.0%
France 1,103 (6.3)% (3.1)% (3.7)% +13.7%
- Castorama 565 (3.1)% +0.1% - +13.9%
- Brico Dépôt 538 (9.3)% (6.3)% (7.5)% +13.5%
Other International 575 +29.7% +36.2% +37.1% +22.2%
- Poland 423 +50.5% +59.0% +54.5% +22.8%
- Iberia(3) 87 (3.5)% (0.3)% (0.3)% +11.8%
- Romania(4) 62 (13.5)% (9.7)% +13.9% +32.8%
- Other(5) 3 n/a n/a n/a n/a
Total Group 3,246 (5.8)% (4.2)% (5.4)% +16.2%
------------------------- --------- --------- ------------------ ------------------ ------------------
Thierry Garnier, Chief Executive Officer, said:
"Kingfisher has delivered a good first quarter of trading, with
LFL sales 16.2% ahead of our pre-pandemic performance. While facing
very strong comparatives in the prior year, our continued strategic
progress has enabled us to retain a significant proportion of the
increased sales during the pandemic.
"We continue to effectively manage inflationary and supply chain
pressures. As a result, our product availability is now very close
to 'normal' levels across all our banners, and we continue to
deliver value for our customers through our own exclusive brands
and competitive prices.
"Looking forward, we are reiterating our profit guidance for FY
22/23. We are focused on delivering on our strategic objectives and
growth initiatives, including the growth of our scalable e-commerce
marketplace, the expansion of Screwfix in the UK and France, new
store openings in Poland, further increasing our trade customer
base.
"We remain committed to delivering attractive returns for our
shareholders and are today announcing a further GBP300m share
buyback programme. This reflects our strong cash generation and our
confidence in the Group's outlook."
Current trading and outlook
The Group has good momentum going into the second quarter. For
the 2 weeks to 14 May 2022(6) LFL sales were -2.5% (including a
c.1% adverse calendar impact) and +21.8% on a 3-year basis. Demand
remains resilient and trading in all banners and across all
customer segments (DIY and DIFM/trade) is in line with our
expectations, supported by strong execution and much improved
product availability.
Looking ahead, we remain mindful of the heightened macroeconomic
and geopolitical uncertainty that has emerged since the start of
the year. Our priority remains top line growth, and strong and
consistent execution. We are targeting further share gains in our
markets, and continue to focus on our strategic objectives and
investments for growth.
We are committed to continue managing our gross margin
effectively in an inflationary environment, as we did successfully
last year. Furthermore, we remain active and responsive in managing
our operating cost base.
As a result of the above, we are reiterating our profit guidance
for this year: we anticipate FY 22/23 adjusted pre-tax profit(7) of
c.GBP770m. Additional financial guidance for FY 22/23 is provided
on page 4 of this announcement.
New GBP300m share buyback programme
In line with our capital allocation policy, the Board has
determined that there is surplus capital available to return to
shareholders. Further to the ordinary dividend(8) and the recently
completed GBP300m share buyback (as announced on 28 April 2022),
the Board is pleased to announce the return of a further GBP300m of
surplus capital via a share buyback programme. The first tranche of
this programme will commence soon.
Board appointment
Kingfisher has appointed Bill Lennie as a Non-Executive
Director, with effect from 1 May 2022. Bill retired in 2021 after
26 years of service with The Home Depot, most recently as Executive
Vice President, Outside Sales and Services. During his time there,
Bill held many senior leadership roles including President, Canada
and Senior Vice President, International Merchandising, Private
Brands and Global Sourcing. Bill has also been appointed as a
member of the Audit and Nomination Committees.
'Teach-in' event on 5 July 2022
Kingfisher is hosting an in-person 'teach-in' event for analysts
and institutional investors, on the afternoon of Tuesday, 5 July
2022. The event will take place in London, and will provide deeper
insights into the e-commerce/technology and Responsible Business
pillars of the 'Powered by Kingfisher' strategy. Please contact
Kingfisher Investor Relations (contact details on page 5) for
registration information.
Q1 trading highlights
All commentary below is in constant currency.
UK & IRELAND
Total sales -14.1% (LFL - 15.8%; 3-year LFL + 16.7%).
Significant market share gains over the past two years, and good
retention of revenue from new and existing customers.
-- B&Q sales -17.8%. LFL -18.3% (3-year LFL +16.3%),
reflecting very strong prior year comparatives and the impact of
storms in the UK in February. Good performance across all
categories on a 3-year basis, in particular in the building &
joinery, outdoor and bathroom & storage categories. Own
exclusive brands (OEB) performed well in the quarter, supported by
resilient demand in the kitchen and bathroom & storage
categories. LFL sales of weather-related categories were -28% (+25%
on a 3-year LFL basis). LFL sales of non-weather-related
categories, including showroom, were -14% (+13% on a 3-year LFL
basis). TradePoint, B&Q's trade-focused banner, continued to
outperform with LFL sales -8% and 3-year LFL sales +32%. TradePoint
sales were 21% of B&Q sales in Q1.
-- Screwfix sales -7.0%. LFL -10.9% (3-year LFL +18.0%), with
resilient demand from trade customers and despite very strong prior
year comparatives. Strong 3-year performance in tools &
hardware and EPHC (electricals, plumbing, heating & cooling)
categories. During the period, Screwfix continued to roll out
Screwfix 'Sprint', with good results. 'Sprint' offers customers an
industry-leading 60-minute home delivery service (average delivery
time c.45 minutes), currently covering 40% of the UK population.
Screwfix opened 13 new stores in Q1 in the UK and Republic of
Ireland, and remains on track to open 80 new stores in these
countries during this financial year. The business will also open
its first stores in France in the second half of 2022.
FRANCE
Total sales -3.1% (LFL - 3.7%; 3-year LFL +13.7%). France
continued to grow sales ahead of the market in Q1, driven by the
performance of Castorama (five percentage points ahead of the
market). LFL sales for the home improvement market in Q1 (as
measured by Banque de France data(9) ) were -5.2% YoY.
-- Castorama sales +0.1%. LFL flat (3-year LFL +13.9%),
reflecting resilient demand from both DIY and DIFM/trade customers.
The continued strong performance at Castorama reflects work to
extend and improve ranges, by introducing more local and
international brands and by launching new OEBs, as well as ongoing
work to improve our logistics operations and our competitive price
positioning. Strong 3-year performance in outdoor, building &
joinery, kitchen and EPHC categories. LFL sales of weather-related
categories were -8% (+27% on a 3-year LFL basis). LFL sales of
non-weather-related categories, including showroom, were +3% (+11%
on a 3-year LFL basis).
-- Brico Dépôt sales -6.3%. LFL -7.5% (3-year LFL +13.5%),
reflecting resilient demand against the backdrop of strong prior
year comparatives, and a continued focus on strengthening its
discounter credentials and differentiated ranges. Strong 3-year
performance in outdoor, building & joinery, EPHC and kitchen
categories.
OTHER INTERNATIONAL
-- Poland sales +59.0%. LFL +54.5% (3-year LFL +22.8%),
supported by market share gains, notwithstanding weak prior year
comparatives due to temporary store closures in Q1 last year.
Strong 3-year performance across all categories, in particular in
the kitchen category. LFL sales of weather-related categories were
+89% (+33% on a 3-year LFL basis). LFL sales of non-weather-related
categories, including showroom, were +49% (+21% on a 3-year LFL
basis). Poland opened one new big-box store in Q1.
-- Iberia sales -0.3%. LFL -0.3% (3-year LFL +11.8%), with
resilient demand against strong prior year comparatives, though
impacted by abnormally cold and wet weather during the period.
Strong 3-year performance in the building & joinery, kitchen
and surfaces & décor categories.
-- Romania sales -9.7%(4) , reflecting one additional month of
sales in the prior year comparative (January 2021), which
facilitated alignment to Kingfisher's financial reporting calendar
last year. LFL +13.9% (3-year LFL +32.8%) reflecting robust demand
across most categories, despite the impact of COVID-related trading
restrictions (lifted in March 2022).
FY 2022/23 Technical guidance
Significant updates to our previous guidance are noted below in
italics . Please refer to page 6 for further details regarding
forward-looking statements.
Income statement:
-- Space
- Anticipate net space growth to impact total sales by c.+1.5%, largely from Screwfix and Poland
-- New businesses
- Anticipate 'Other' retail losses of c.GBP20m (FY 21/22:
GBP10m). 'Other' consists of the consolidated results of NeedHelp,
Screwfix International, and franchise agreements, and is recorded
within the 'Other International' division
- Anticipate retail loss of c.GBP5m in relation to investment in
B&Q's e-commerce marketplace, recorded within the results of
B&Q in the 'UK & Ireland' division
-- Central costs
- Expected to be broadly flat year on year (FY 21/22: GBP60m)
-- Net finance costs
- Expected to decrease by c.GBP15m mainly as a result of lower
lease liability interest rate (FY 21/22: GBP137m)
-- Adjusted pre-tax profit
- Anticipate full year adjusted pre-tax profit(7) of c.GBP770m
-- Tax rate
- Group adjusted effective tax rate expected to be c.22%(10) (FY 21/22: 22%)
Cash flow:
-- Capital expenditure - targeting gross capex of c.3.5% of total sales (FY 21/22: GBP397m)
-- Tax - in February 2022, a payment of EUR40m was made to the
French tax authorities with regards to a historic tax liability.
The amount was fully provided for in prior periods
-- Share buyback - c.GBP445m outflow for share buybacks
(c.GBP145m for previous programme completed in April, and further
GBP300m announced today)
-- Dividend - dividend policy target cover range of 2.25 to 2.75
times, based on adjusted basic earnings per share
Footnotes
(1) LFL (like-for-like) sales growth represents the constant
currency, year on year sales growth for stores that have been open
for more than one year. Stores temporarily closed or otherwise
impacted due to COVID are also included.
(2) 3-year LFL is calculated by compounding the current and
prior two periods' LFL growth. For example, Q1 22/23 LFL growth of
5%, Q1 21/22 LFL growth of 4%, and Q1 20/21 LFL growth of 3%,
results in 3-year LFL growth of 12.5%. Russia (sale completed on 30
September 2020) is excluded from Group and Other International
3-year LFL calculations.
(3) Brico Dépôt Spain and Portugal.
(4) Kingfisher's subsidiary in Romania historically prepared its
financial statements to 31 December. In FY 21/22, Romania migrated
to Kingfisher's financial reporting calendar (year ended 31 January
2022). Its quarterly sales presented in FY 21/22 therefore included
one additional month of results (April 2021) in order to facilitate
the alignment to Kingfisher's financial reporting calendar.
Therefore, reported and constant currency variances for Romania
sales are for February to April 2022 (compared against January to
April 2021). Romania's LFL and 3-year LFL sales growth compares
equivalent periods in the current and prior years.
(5) 'Other' consists of the consolidated results of NeedHelp
(acquired in November 2020), Screwfix International (launched
online in France in April 2021), and revenue from franchise
agreements.
(6) LFL sales growth for the two weeks to 14 May 2022 represent
the period 1 May 2022 to 14 May 2022 compared against the
equivalent period in the prior year (i.e., 2 May 2021 to 15 May
2021). The corresponding 3-year LFL represents the period 1 May
2022 to 14 May 2022 compared against the equivalent period in FY
19/20 (i.e., 5 May 2019 to 18 May 2019). The figures are
provisional and exclude certain non-cash accounting adjustments
relating to revenue recognition.
(7) Guidance assumes current exchange rates.
(8) On 22 March 2022, the Board proposed a final dividend per
share of 8.60p (FY 20/21 final dividend: 5.50p), resulting in a
proposed total dividend per share of 12.40p in respect of FY 21/22
(FY 20/21: 8.25p). The final dividend is subject to the approval of
shareholders at the Annual General Meeting on 22 June 2022, and
will be paid on 27 June 2022 to shareholders who were on the
register at close of business on 20 May 2022.
(9) Banque de France data for DIY retail like-for-like sales
(non-seasonally adjusted). Includes relocated and extended stores
http://webstat.banque-france.fr/en/browse.do?node=5384326 .
(10) Subject to the blend of profit within the Group's various
jurisdictions.
Contacts: Tel: Email:
Investor Relations +44 (0) 20 7644 1082 investorenquiries@kingfisher.com
Media Relations +44 (0) 20 7644 1030 corpcomms@kingfisher.com
Teneo +44 (0) 20 7420 3184 kfteam@teneo.com
Q1 trading update and data tables
This announcement and data tables for Q1 22/23 sales can be
downloaded from www.kingfisher.com/investors .
We can be followed on Twitter (@kingfisherplc) with the Q1
results tag #KingfisherResults.
Half year 22/23 results
Our next scheduled results announcement will be our results for
the six months ending 31 July 2022, on 20 September 2022.
American Depository Receipts
Kingfisher American Depository Receipts are traded in the US on
the OTCQX platform: (OTCQX: KGFHY)
http://www.otcmarkets.com/stock/KGFHY/quote .
About Kingfisher plc
Kingfisher plc is an international home improvement company with
approximately 1,490 stores, supported by a team of over 80,000
colleagues. We operate in eight countries across Europe under
retail banners including B&Q, Castorama, Brico Dépôt, Screwfix,
TradePoint and Koçta . We offer home improvement products and
services to consumers and trade professionals who shop in our
stores and via our e-commerce channels. At Kingfisher, our purpose
is to help make better homes accessible for everyone.
Forward-looking statements
You are not to construe the content of this announcement as
investment, legal or tax advice and you should make your own
evaluation of the Company and the market. If you are in any doubt
about the contents of this announcement or the action you should
take, you should consult a person authorised under the Financial
Services and Markets Act 2000 (as amended) (or if you are a person
outside the UK, otherwise duly qualified in your jurisdiction).
This announcement has been prepared in relation to sales for the
quarter ended 30 April 2022. The financial information referenced
in this announcement is not audited and does not contain sufficient
detail to allow a full understanding of the results of the Group.
Nothing in this announcement should be construed as either an offer
or invitation to sell or any offering of securities or any
invitation or inducement to any person to underwrite, subscribe for
or otherwise acquire securities in any company within the Group or
an invitation or inducement to engage in investment activity under
section 21 of the Financial Services and Markets Act 2000 (as
amended) (or, otherwise under any other law, regulation or exchange
rules in any other applicable jurisdiction).
Certain information contained in this announcement may
constitute "forward-looking statements" (including within the
meaning of the safe harbour provisions of the United States Private
Securities Litigation Reform Act of 1995), which can be identified
by the use of terms such as "may", "will", "would", "could",
"should", "expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "plan", "goal", "aim", forecast, or "believe"
(or the negatives thereof) or other variations thereon or
comparable terminology. These forward-looking statements are based
on currently available information and our current assumptions,
expectations and projections about future events. These
forward-looking statements include all matters that are not
historical facts and include statements which look forward in time
or statements regarding the Company's intentions, beliefs or
current expectations and those of our Officers, Directors and
employees concerning, amongst other things, the Company's results
of operations, financial condition, changes in global or regional
trade conditions (including a downturn in the retail or financial
services industries), competitive influences, changes in tax rates,
exchange rates or interest rates, changes to customer preferences,
the state of the housing and home improvement markets, share
repurchases and dividends, capital expenditure and capital
allocation, liquidity, prospects, growth and strategies, litigation
or other proceedings to which we are subject, acts of war or
terrorism worldwide, work stoppages, slowdowns or strikes, public
health crises, outbreaks of contagious disease (including but not
limited to the COVID pandemic), environmental disruption or
political volatility. By their nature, forward-looking statements
are not guarantees of future performance and are subject to future
events, risks and
uncertainties - many of which are beyond our control, dependent
on actions of third parties, or currently unknown to us - as well
as potentially inaccurate assumptions that could cause actual
events or results or actual performance of the Group to differ
materially from those reflected or contemplated in such
forward-looking statements. For further information regarding risks
to Kingfisher's business, please consult the risk management
section of the Company's Annual Report (as published). No
representation, warranty or other assurance is made as to the
achievement or reasonableness of, and no reliance should be placed
on, such forward-looking statements.
The forward-looking statements contained in this announcement
speak only as of the date of this announcement and the Company does
not undertake any obligation to update or revise any
forward-looking statement to reflect any new information, change in
circumstances, or change in the Company's expectations to reflect
events or circumstances after the date of this announcement or to
reflect the occurrence of unanticipated events.
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END
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