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FY 19/20  Technical Guidance(1)

 

Employees, new stores and space growth:

  Employees
(FTE)
At 31 Jan
2019
Store Numbers
At 31 Jan 2019
Sales area(3)
(000s m2)
At 31 Jan 2019
Net new stores
FY 19/20
Space % change
FY 19/20
B&Q UK & Ireland 16,221 296 2,210 2 -
Screwfix UK & Ireland 8,330 627 40 55 +10%
UK & Ireland 24,551 923 2,250 57 -
Castorama 10,921 101 1,250 2 (1)%
Brico Dépôt 7,390 123 850 (1) (1)%
France 18,311 224 2,100 1 (1)%
Iberia 1,824 31 195 - -
Poland 10,988 76 652 6 +8%
Romania 2,538 38 273 (3) (8)%
Russia 3,157 20 208 (1) (5)%
Screwfix Germany 182 19 1 (19) n.a.
Other International 18,689 184 1,329 (17) +2%
Total 61,551 1,331 5,679 41 -

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

Income statement:

  • Sales outlook:
    • UK – heightened levels of uncertainty; annualisation of discontinuation of installations (c.1-2% impact to B&Q H1 19/20 LFL)
    • France – weaker housing data; encouraged by Castorama’s start to the year
    • Poland – loss of one further Sunday of trading per month (3 non-trading Sundays; previously 2)
  • Gross margin after clearance expected to be flat(2)
    • Includes c.£25-30m incremental clearance costs (H1 19/20 weighted) associated with the implementation of new unified ranges including kitchens in B&Q
  • Central costs expected to be c.£50m
  • Total transformation costs over 5 years to FY 20/21 expected to be less than £800m
    • Transformation P&L costs expected to be c.£60-80m in FY 19/20
    • Transformation exceptional costs expected to be c.£40m in FY 19/20
  • Adjusted effective tax rate expected to be around 26-27%, subject to the blend of profit within the companies' various jurisdictions, as well as the timing of exits from Russia and Iberia

Cash flow:

  • Total capex including transformation of up to c.£375m  

  • Stores considered for closure: cash costs expected to be covered by disposal proceeds

 

(1) Guidance given before the impact of the new lease accounting rules per IFRS 16

(2) Gross margin movement excluding Russia and Iberia

 

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 full year ended 31 January 2019. 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.