Kingfisher plc, the international home improvement retailer, anounced today the half year results for the 6 months ended at 31 July 2018. Solid performances in Poland.
In H1, total sales of the group increased by 0.6%, on a constant currency basis, to £6.1 billion, with LFL sales down 1.1%. On a reported rate basis, which includes the impact of exchange rates, sales increased by 1.2%.
During H1, sales growth benefited from 22 net new stores, including 21 Screwfix outlet openings in the UK and one net new store opening in France. In November 2017 a net 23 stores were added through the acquisition of Praktiker Romania.
Other International total sales increased by 4.5% (+0.5 % LFL) to £1,178 million reflecting growth in Poland and the acquisition of Praktiker Romania in November 2017. Retail profit decreased by 19.0% to £64 million, with growth in Poland offset by losses in Russia, Romania and Screwfix Germany.
Sales in Poland were up 2.8% (+1.5 % LFL) to £726 million despite the introduction of new laws on Sunday trading. LFL sales of weather-related categories were up 1.6% while sales of non-weather-related categories, including showroom, were up 1.4%. Gross margin was up by 120 basis points reflecting improved product mix including unified and unique ranges. Retail profit grew by 1.9% to £88 million after higher staff costs.
In Russia sales declined by 4.6% (-1.6% LFL) to £167 million. The business delivered a retail loss of £9 million (2017/18: £3 million reported retail loss) reflecting a challenging environment and store pre-opening and refurbishment costs.
In Romania sales increased by 82.3% (+3.5% LFL) to £95m driven by the acquisition of Praktiker Romania and made a retail loss of £9 million (2017/18: £1 million reported retail loss) reflecting customer uncertainty following the change of ownership of Praktiker Romania.
Turkey, Kingfisher’s 50% JV, Koçtaş, contributed retail profit of £1 million (2017/18: £3 million reported retail profit).
The ONE Kingfisher five year plan status
The ONE Kingfisher five year plan, which started in FY 16/17, is starting to leverage the scale of the business by creating a unified company, where customer needs always come first. The retailer intention is that this five years transformation plan will deliver a £500m sustainable annual profit uplift by the end of FY 20/21, over and above what the business would have delivered without the plan.
The focus of the transformation plan is on three key strategic pillars: creating a unified, unique and leading home improvement offer, driving our digital capability and optimising our operational efficiency.
“The extent and pace of change in the retail sector is profound. We saw these changes and acted early. We’re now halfway through our ONE Kingfisher transformation and we are well on our way to becoming a truly customer led, digital, and efficient business.
Transformation on this scale is tough, and there are challenges that we’re working through. There is still much to do to improve our performance in France and to remove inefficiencies within the business as we continue to transform at pace. I am confident that we have the right plan and the opportunity for Kingfisher is significant.
Our H1 results reflect a solid performance in the UK and Poland whilst France remains difficult. Looking to the full year we remain on track to deliver our strategic milestones for the third year in a row and have put actions in place to support our performance. The outlook for our main markets continues to be mixed.
We firmly believe in the transformation plan benefits and maintain our ambition. The environment is making our task more difficult than expected and we will always take the right decisions for the company in the long-term,” said Véronique Laury, CEO Kingfisher plc.
Kingfisher plc is an international home improvement company with nearly 1,300 stores in 10 countries across Europe, Russia and Turkey, supported by a team of 78,000 employees.
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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