FY 2016/17  Technical Guidance

 

Employee, new stores and space growth:

  Employees
(FTE)
At 31 Jul
2016
Store Numbers
At 31 Jul 2016
Sales area(1)
(000s m2)
At 31 Jul 2016
Net new stores
FY 2016/17
Space % change
FY 2016/17
B&Q UK & Ireland 19,208 308 2,305 (35) (7.5)%
Screwfix 6,507 477 29 60 +10.6%
UK & Ireland 25,715 785 2,334 25 (7.3)%
Castorama 12,625 102 1,253 - +1.1%
Brico Dépôt 7,375 119 829 1 +0.9%
France 20,000 221 2,082 1 +1.0%
Poland 11,302 74 627 2 +2.9%
Portugal 134 2 12 1 n/a
Romania 851 15 114 - -
Russia 3,199 20 198 - +1.3%(2)
Spain 1,694 29 182 - -
Screwfix Germany 127 12 1 9 n/a
Other International 17,307 152 1,134 12 +2.6%
Total 63,022 1,158 5,550 38 (2.3)%

(1) Screwfix sales area relates to the front of counter area of an outlet
(2) Includes one closure and one opening

  • Income statement:
    • Underlying profit expected to include up to c.£25m operational efficiency benefits
    • Transformation P&L costs of £220 million over next five years to be mostly incurred in first three years (FY 2016/17 expected to be up to c.£60 million, previously c.£70m, due to phasing of spend)
    • Transformation exceptional costs of £270 million over next five years to be mostly incurred in first three years (FY 2016/17 transformation exceptional costs expected to be up to £10m, previously c.£50m, reflecting lower initial reorganisation costs)
    • Retail losses from new country development activity expected to be c.£20m driven by Screwfix Europe*
    • Group interest charge expected to be c.£10m (excluding FFVR* and exceptionals)
    • Effective tax rate expected to be around 26%, subject to the blend of profit within the companies’ various jurisdictions
    • B&Q closures - income statement impact expected to be broadly neutral assuming on average that around a third of sales transfer
    • As a result of a change in legislation during the year relating to TASCOM, operating costs increased by £9m during H1 which will be offset by a corresponding reduction in H2, hence not impacting the full year. Comparatives are not restated.
  • Cash flow:
    • Investing up to c.£450m total capex for FY 2016/17 (includes BAU and transformation); c.£500m for FY 2017/18 and FY 2018/19
    • Capital return of c.£600m by the end of FY 2018/19 expected to be via share buyback (£160m of shares (47m shares) repurchased year to date)

For transformation technical guidance relating the 2016 Capital Markets Day click here

Forward-looking statements

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This announcement has been prepared in relation to the financial results for the half year ended 31 July 2016. 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).

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” or “believe” (or the negatives thereof) or other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, changes in tax rates, liquidity, prospects, growth and strategies.  By their nature, forward-looking statements involve risks, assumptions and uncertainties that could cause actual events or results or actual performance of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements.

The Company does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in the Company’s expectations.