FY 2017/18  Technical Guidance

 

Employee, new stores and space growth:

  Employees
(FTE)
At 31 Jan
2017
Store Numbers
At 31 Jan 2017
Sales area(1)
(000s m2)
At 31 Jan 2017
Net new stores
FY 2017/18
Space % change
FY 2017/18
B&Q UK & Ireland 18,883 295 2,221 1 -
Screwfix 7,130 517 31 50 +7%
UK & Ireland 26,013 812 2,252 51 -
Castorama 11,480 102 1,248 - +1%
Brico Dépôt 7,242 119 831 2 +1%
France 18,722 221 2,079 2 +1%
Poland 11,404 75 635 1 +2%
Portugal 155 3 20 - -
Romania 816 15 114 - -
Russia 3,177 21 209 - -
Spain 1,555 28 175 - -
Screwfix Germany 170 19 1 - -
Other International 17,277 161 1,154 1 +1%
Total 62,012 1,194 5,485 54 +1%

(1) Screwfix sales area relates to the front of counter area of an outlet

Income statement:

  • Broadly flat gross margin assuming Unified & Unique Offer CPR benefits are offset by some price reinvestment and clearance
  • Underlying profit expected to include up to a further £20m operational efficiency benefits
  • Total 5 year transformation costs £800m
    • Transformation P&L costs of c.£310m (previously £220m) over 5 years to FY 2020/21, to be mostly incurred over first 3 years. FY 2017/18 expected to be c.£150m
    • Transformation exceptional costs of c.£170m (previously £270m) over 5 years to FY 2020/21, to be incurred over first 4 years (previously 3 years). FY 2017/18 transformation exceptional costs expected to be c.£30m
  • c.1% LFL sales transference benefit from B&Q store closures
  • Retail losses from new country development activity expected to be c.£15m driven by Screwfix Europe*
  • Group interest charge expected to be c.£5m (excluding FFVR* and exceptionals)
  • Effective tax rate expected to be around 26%, subject to the blend of profit within the companies’ various jurisdictions

Cash flow:

  • Total capex including transformation of c.£450m for FY 2017/18
  • Capital return of c.£600m by the end of FY 2018/19 expected to be via share buyback (£200m completed in FY 2016/17)

Forward-looking statements

You are not to construe the content of this announcement as investment, legal or tax advice and you should make you own evaluation of the Company and the market. If you are in any doubt about the contents of this announcement or the action you should take, you should consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (or if you are a person outside the UK, otherwise duly qualified in your jurisdiction).

This announcement has been prepared in relation to the financial results for the full year ended 31 January 2017. 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, forwardlooking 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.