Interim results for the half year ended 1 August 2015

15 September 2015

 

Sales up 3.5% and retail profit up 5.0%, in constant currencies
Adjusted pre-tax profit of £384m, down 2.3%
Solid early progress on the journey to ‘ONE’ Kingfisher

Financial overview and highlights for the 26 weeks ended 1 August 2015:

      % Total Change % Total Change % LFL* Change
  2015/16 2014/15 Reported Constant currency Constant currency
Adjusted sales* £5,382m £5,605m (4.0)% +3.5% +2.0%
Retail profit* £410m £419m (2.2)% +5.0%  
Adjusted* pre-tax profit £384m £393m (2.3)%    
Adjusted basic EPS 12.3p 12.3p Flat    
Interim dividend 3.18p 3.15p +1.0%    
Net cash* £435m £496m n/a    

*Throughout this release ‘*’ indicates first instance of a term defined in the Glossary (section 5).

  • Total adjusted sales in constant currencies up 3.5% (France +1.1%; UK & Ireland +4.6%; Other International +5.7%)
  • Retail profit in constant currencies up 5.0% (France (5.7)%; UK & Ireland +16.8%; Other International +3.0%)
  • Adjusted pre-tax profit of £384m driven by strong UK profit growth, offset by £29m adverse foreign exchange movements on the translation of non-sterling profits
  • £160m returned to date via a share buyback since year end (44.7m shares), part of the previously announced £200m due to be returned during FY 2015/16


Solid early progress with our first ‘sharp’ decisions as we progress towards ‘ONE’ Kingfisher:


CUSTOMER & OFFER:

Good early progress in unifying our offer

  • First wave of unifying our ‘core essential’ ranges to land in stores next year

RETAIL OPERATIONS:

Space - rationalisation on track; announcing Screwfix UK expansion

  • On track to close c.15% B&Q surplus space by end of FY 2016/17 (c.60 stores) in over-spaced catchments; exit of leases secured on 26 of the stores
  • Announced closure of 2 stores in France and 1 in Russia
  • Announcing potential for a further 200 Screwfix UK outlets from 412 today; Screwfix Germany trial on track

INFRASTRUCTURE & PROCESSES:

Programme to unify Goods Not For Resale (GNFR*) underway

  • First wave of unified spend (£350m) on track to land next year

Unified IT platform, key enabler of ‘ONE’ Kingfisher on track

  • Ireland pilot started on time and working well
  • Announcing acceleration of rollout (to complete by end of FY 2018/19)

PEOPLE:

Finalised leadership team with appointment of Chief People Officer

Véronique Laury, Chief Executive Officer, said:

“I am pleased that we have delivered a solid first half of the year and have made good early progress with our ‘ONE’ Kingfisher plan. This plan will unlock our potential through organising ourselves very differently in order to create a single, unified company where customer needs come first.

“We have been working at pace on our set of first ‘sharp’ decisions. I am particularly excited to see the first wave of unified ‘core essential’ ranges landing in stores next year. This is being led by Arja Taaveniku, our Chief Offer & Supply Chain Officer, who joined the team in May. Furthermore, I am also delighted with the pilot of our unified IT system in Ireland, which we are now able to accelerate across Kingfisher given the success so far. This will be a key enabler of our ‘ONE’ Kingfisher journey.

“There remains a lot to be done however. Our leadership team is now complete and we are continuing to develop our detailed plans at pace as we progress on this exciting journey. We look forward to updating on further progress along the way.”

Karen Witts, Chief Financial Officer, said:

“We continue to believe our plans will drive an increase in the value of our business for shareholders, whilst at the same time optimising the generation and use of cash.

“Our balance sheet remains strong, enabling us to continue investing for growth and to return so far this year, £160 million via share buyback. We are also today announcing growth in the interim dividend, ahead of earnings, reflecting our confidence in our medium term prospects. In addition, I am pleased with the progress made to exit most of the B&Q stores earmarked for closure this year, which will in time strengthen our balance sheet and maintain our financial flexibility.

“In the short term, whilst we remain encouraged by the macroeconomic backdrop in the UK, we remain cautious on the outlook for France.”

Statutory reporting:

  2015/16 2014/15 % Change Reported
Statutory sales* £5,492m £5,768m (4.8)%
Statutory pre-tax profit £386m £393m (1.8)%
Statutory post-tax profit £318m £290m +9.7%
Basic EPS 13.6p 12.3p +10.6%

Contacts:

Investor Relations
+44 (0) 20 7644 1029

Media Relations
+44 (0) 20 7644 1030

Brunswick
+44 (0) 20 7404 5959

This announcement can be downloaded from www.kingfisher.com or viewed on the Kingfisher IR iPad App. We can be followed on twitter @kingfisherplc with the Interim results tag #KGFH1. Our next announcement will be the Q3 trading update for period ended 31 October 2015 on 24 November 2015.

Kingfisher American Depositary Receipts are traded in the US on the OTCQX platform:
(OTCQX: KGFHY) http://www.otcmarkets.com/stock/KGFHY/quote