Preliminary results for the 52 weeks ended 2 February 2008
27 March 2008
Operational Review – Rest of Europe
|Retail sales £m||2007/08||2006/07||% Change
|Rest of Europe||1,273||1,002||27.0%||22.8%||12.2%|
|Retail profit £m||2007/08||2006/07||% Change
|Rest of Europe||122||110||10.1%||5.9%|
Rest of Europe includes Poland, Italy, Spain, Ireland, Russia, Turkey JV and Hornbach in Germany.
Joint Venture and Associate sales are not consolidated.
All percentage movements below are in constant currencies.
Rest of Europe sales increased 22.8% to £1,273 million (+12.2% LFL) with 12 more stores (excluding Turkey JV) trading compared to the prior year. Retail profit increased 5.9% to £122 million, reflecting strong growth in Poland offset by weaker performances from Castorama Italy and Hornbach (21% economic interest) in a difficult German market.
Seventeen new stores were opened in the year across six countries, including seven in Poland, five in Turkey and two in Russia.
Sales for Castorama and Brico Dépôt in Poland increased 31.1% to £703 million (+22.5% LFL), boosted by buoyant consumer spending, strong property and construction markets and favourable weather. Retail profit increased 41.8% to £87 million as good cost control, a year on year doubling in direct sourcing and increased own-brand penetration, helped to offset increasing wage inflation. New ranges, including exclusive own-brand professional tools and decorative products, performed well.
Seven new stores opened including the second Brico Dépôt, launched to meet the demand for a more trade-orientated offer.
Operating in a generally weak retail market, Castorama Italy sales declined 1.2% to £314 million (-2.4% LFL). Sales benefited from relocated and revamped stores, together with successful targeted promotional activity in bathroom accessory and flooring categories. Retail profit of £29 million was down slightly on the prior year (2006/07: £31 million), with higher pre-opening and revamp costs. Increased own-brand penetration and good cost control helped to offset the slow market.
One new store was opened taking the total to 28. Two stores were revamped and one was relocated.
In Ireland, where B&Q has eight stores, sales grew 6.8%, reflecting one new store opening in the second half of the year. Brico Dépôt’s expansion into Spain continued with 11 stores now trading with underlying trading encouraging. In Russia, two new Castorama stores were opened taking the total to five. Sales more than doubled compared to the prior year (+25.6% LFL).
Koçtaş in Turkey, a 50% joint venture, continued to grow sales and retail profit strongly, benefiting from Kingfisher sourcing buying power and own-brand penetration. Five new stores opened taking the total to 15. Hornbach, in which Kingfisher has a 21% economic interest, contributed £13 million to retail profit; £6 million lower than last year, due to a difficult German market.