FY 2017/18  Technical Guidance


Employee, new stores and space growth:

At 31 Jul
Store Numbers
At 31 Jul 2017
Sales area(1)
(000s m2)
At 31 Jul 2017
Net new stores
FY 2017/18
Space % change
FY 2017/18
B&Q UK & Ireland 18,101 296 2,222 1 +0.1%
Screwfix 7,299 533 32 60 +8.7%
UK & Ireland 25,400 829 2,254 61 +0.2%
Castorama 12,669 102 1,255 - +0.6%(2)
Brico Dépôt 7,454 120 837 2 +1.4%
France 20,123 222 2,092 2 +0.9%
Poland 11,041 74 631 1 +2.3%
Portugal 161 3 20 - -
Romania 964 15 114 - -
Russia 3,232 21 211 (1) (3.9)%
Spain 1,524 28 175 - -
Screwfix Germany 181 19 1 - -
Other International 17,103 160 1,152 - +0.6%
Total 62,626 1,211 5,498 63 +0.5%

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

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 a further c.£25m operational efficiency benefits (previously c.£20m)
  • Total 5 year transformation costs £800m
    • Transformation P&L costs of c.£310m over 5 years to FY 2020/21, to be mostly incurred over first 3 years. FY 2017/18 expected to be c.£130m (previously £150m)

    • Transformation exceptional costs of c.£170m over 5 years to FY 2020/21, to be incurred over first 4 years. FY 2017/18 transformation exceptional costs expected to be c.£30m

  • c.1% B&Q 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 less than £5m (excluding FFVR and exceptionals)
  • Underlying effective tax rate expected to be around 27%, subject to the blend of profit within the companies’ various jurisdictions. Following proposed legislation in France, a corporate tax surcharge is expected to increase our group tax charge by c. €25m for FY 17/18. This is not expected to recur in subsequent years.  

Cash flow:

  • Total capex including transformation of up to £375m for FY 2017/18 (previously up to £450m)

  • Capital return of c.£600m by the end of FY 2018/19 expected to be via share buyback (£400m completed to date)

Forward-looking statements

You are not to construe the content of this announcement as investment, legal or tax advice and you should make your 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 Half Year ended 31 July 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 global or regional trade conditions, 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.