Interim results for the 26 weeks ended 30 July 2011
15 September 2011
Trading Review – OTHER INTERNATIONAL
|Sales £m||2011/12||2010/11||% Reported Change||% Constant Change||% LFL
|Retail profit £m||2011/12||2010/11||% Reported Change||% Constant Change|
Other International includes Poland, China, Spain, Russia, Turkey JV and Hornbach in Germany. Joint Venture (Koçtas
JV) and Associate (Hornbach) sales are not consolidated
2011/12: £1 = 1.14 euro (2010/11: 1.16 euro)
2011/12: £1 = 4.54 Polish zloty (2010/11: £1 = 4.64 Polish zloty)
2011/12: £1 = 10.56 Chinese renminbi (2010/11: £1 = 10.31 Chinese renminbi)
All trading commentary below is in constant currencies
Other International total sales increased by 6.9% to £1.0 billion (+2.5% LFL). Retail profit was up 24.7% to £90 million driven by profit growth in Poland, Spain, Turkey and Germany and lower losses in Russia and China.
During H1, five net new stores opened, two in Poland, two in Russia, two in Turkey and one rationalisation in China, adding around 3% new space. A further 10 new stores are planned for H2, including four in Poland, two in Russia and four in Turkey, adding around 10% new space for the full year.
In Eastern Europe sales in Poland were up 6.3% (+2.4% LFL) to £570 million. New bathroom and garden catalogues and expanded decoration ranges all boosted sales and profits. Retail profit was up 5.6% to £70 million reflecting the solid sales growth with gross margins benefiting (+30 basis points) from more direct sourcing and continued tight cost control. In Russia sales grew 28.4% to £142 million reflecting new store openings. In Turkey, Kingfisher's 50% JV, Koçtaş, retail profit grew strongly reflecting strong sales growth (+7.6% LFL), more direct sourcing benefiting gross margins and tight cost control.
Elsewhere, in Spain the Brico Dépôt business continued to grow sales and profits in a tough market with sales up 11.4% in H1. Hornbach, in which Kingfisher has a 21% economic interest, grew its retail profit contribution by 17.1% to £13 million (2010/11: £11 million).
B&Q China sales declined 7.7% to £168 million (-5.9% LFL) reflecting one less store compared with the same period last year and a challenging housing market (down 14%*). The 'fix-it' phase of the turnaround plan remains on track with losses reducing as planned to £5 million, more than halved compared to the same period last year (2010/11: £11 million loss).
* New property transaction sales for China's 13 largest cities August 2010-July 2011 according to the China Real Estate Exchange Center