Grow for Kingfisher in Poland and losses in Russia and Romania, in FY 18/19

Kingfisher plc, the international home improvement retailer, anounced today the FY18/19 results, year ended at 31 January 2019. Grow for Kingfisher in Poland and losses in Russia and Romania, in FY 18/19. The group will close 19 Screwfix Germany stores.

Kingfisher

Total sales up 0.3%, to 11,685 million £, in constant currency, LFL down 1.6% with growth in Screwfix (UK), Brico Dépôt France and Castorama Poland offset by B&Q and Castorama France.

FY gross margin up in UK, Poland & Brico Dépôt France, H2 Group gross margin +30bps. Underlying PBT down 13.0%, with retail profit increases in the UK and Poland (56% of total sales) more than offset by weakness in Castorama France and losses in Russia & Romania.

Other International markets

Other International total sales increased by 5.7% (+1.0% LFL) to £2,352 million reflecting growth in Poland and the acquisition of Praktiker Romania in November 2017. Retail profit decreased by 4.3% to £145 million, with growth in Poland offset by losses in Russia, Romania and Screwfix Germany. Across the businesses space remained broadly flat, with three net store closures in Romania.

Sales in Poland were up 3.4% (+1.7% LFL) to £1,431 million despite the introduction of new laws on Sunday trading which had an estimated adverse impact on LFL sales of c. 1.5%. LFL sales of weather-related categories were up 3.4% with sales of non-weather-related categories, including showroom up 1.4%. Gross margin was up 110 basis points reflecting sourcing benefits. Retail profit grew by 6.6% to £181 million reflecting sales growth and higher gross margin, partly offset by higher staff costs (as wage inflation is running significantly ahead of retail price inflation).

„In Poland the market remains supportive. We are positive about the longer term outlook for the home improvement sector and we are focused on delivering growth in sales, margin and returns”, said the leadership of the company.

Romania

In Romania sales increased by 63.4% (+0.2% LFL) to £210m driven by the acquisition of Praktiker Romania and made a retail loss of £15 million (2017/18: £3 million reported retail profit) reflecting a year of transition following acquisition of Praktiker Romania and significant range change. Brico Dépôt Romania continue to make a retail profit. The integration of Praktiker is progressing with new unified ranges being implemented and the stores now rebranded to Brico Dépôt.

In Romania, starting with March 15, 2019, the Praktiker stores became Brico Depôt units once the rebranding process was completed and Brico Depôt network in Romania count a total of 34 stores in this moment.

In the other hand, the group are considering the closure of 15 poor performing stores across the business over next 2 years. The group will also close 19 Screwfix Germany stores. „We have taken the decision to close all 19 of our Screwfix Germany outlets, while retaining an online presence. These outlets are expected to close in FY 19/20”, said the leadership of the company.

In Turkey, Kingfisher’s 50% JV, Koçtaş, contributed retail profit of £6 million (2017/18: £7 million reported retail profit).

Kingfisher are operating three DIY retail networks in Central and Eastern Europe: Castorama, in Poland, Brico Dépôt, in Romania and Koçtaş, in Turkey. Kingfisher have taken the decision, in 2018, november, to exit Russia, Spain and Portugal, to focus on markets where retailer have, or can reach, a market leading position.

Kingfisher plc

Kingfisher plc is an international home improvement company with 1,331 stores in 10 countries across Europe, Russia and Turkey, supported by a team of 77,300 colleagues.

This article is part of the CEE DIY retail category from www.bricoretail.ro B2B publication and bring together news, in english, from Central and East Europe related with DIY and home improvement retail.

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