TIDMKGF
RNS Number : 1238H
Kingfisher PLC
23 March 2020
Kingfisher plc
FCA moratorium on publication of preliminary financial
statements; updates on Q4 19/20, current trading and COVID-19
Kingfisher plc ('Company' or 'Kingfisher') announces today that
it will be complying with the Financial Conduct Authority's (FCA)
strong request to all listed companies to delay the publication of
preliminary financial statements for at least two weeks. A link to
the FCA's announcement is included for reference:
https://www.fca.org.uk/news/statements/fca-requests-delay-forthcoming-announcement-preliminary-financial-accounts
.
Kingfisher was one of a number of companies due to announce
final results to have received a letter from the FCA on Sunday 22
March. The letter requested a delay to the forthcoming announcement
of our preliminary financial statements for the year ended 31
January 2020, scheduled to be announced on Tuesday 24 March.
Further updates will be given as to the timing of the
publication of our FY 19/20 results, as soon as we are advised by
the FCA.
Given the above, we are providing updates today on how we are
managing the impacts of COVID-19, along with our Q4 and FY 19/20
sales, FY 19/20 final dividend, and current trading.
Unaudited Q4 and FY 19/20 sales update to 31 January 2020
Sales % Total % Total % LFL(1) % LFL(1) % LFL(1)
FY Change Change Change Change Change Q4
2019/20 2019/20 2019/20 2019/20 Q3 YTD
----------------- ---------- ---------- ---------- ---------- ---------
GBPm Reported Constant Constant Constant Constant
currency currency currency currency
UK & Ireland 5,112 +1.0% +1.0% (0.3)% (0.8)% +1.3%
- B&Q UK &
Ireland 3,284 (3.1)% (3.1)% (2.9)% (3.3)% (1.6)%
- Screwfix 1,828 +9.4% +9.4% +5.0% +4.6% +5.9%
France 4,082 (4.5)% (3.2)% (3.2)% (5.0)% +3.3%
- Castorama 2,145 (4.5)% (3.3)% (3.3)% (4.9)% +2.5%
- Brico
Dépôt 1,937 (4.4)% (3.1)% (3.1)% (5.1)% +4.3%
Other
International 2,319 (1.4)% (0.2)% (0.8)% (1.1)% -
- Poland 1,461 +2.1% +4.0% +1.6% +1.1% +3.4%
- Romania 216 +2.6% +6.1% +8.8% +8.7% +9.0%
- Iberia(2) 326 (5.9)% (4.7)% (4.7)% (5.1)% (3.2)%
- Russia 311 (11.6)% (13.9)% (10.8)% (9.8)% (13.9)%
- Screwfix 5 n/a n/a n/a n/a n/a
Germany
Total Group 11,513 (1.5)% (0.8)% (1.5)% (2.4)% +1.7%
----------------- ---------- ---------- ---------- ---------
Commentary
-- FY 19/20 total sales -0.8% in constant currency; LFL -1.5%
-- Q4 19/20 LFL +1.7%, reflecting operational improvements in
France and the implementation of a new trading approach across the
Group, including reintroducing trading events
o Improved sales trend in all core retail businesses in the
quarter
o In the UK, early results from price investment at Screwfix
o In France, sales performance vs market(3) improved. In
February, we performed slightly better than the market, reflecting
operational improvements, better store availability, and a new
trading approach
o In Poland, improved LFL despite softer market
Cash and net debt
As at 31 January 2020, Kingfisher had cash and cash equivalents
of GBP195 million. Kingfisher has limited borrowings (including
financing derivatives), totalling GBP158 million as at 31 January
2020. Total net debt for the Company, including GBP2,563 million of
lease liabilities under IFRS 16, was GBP2,526 million as at 31
January 2020.
We drew down on our two Revolving Credit Facilities (RCFs)
totalling GBP775 million on 17 March 2020. Our RCFs expire in March
2022 (GBP225 million) and August 2022 (GBP550 million). The Group
confirms that for the year ended 31 January 2020, it had
significant headroom in relation to its interest cover covenant and
that it complied with key terms on its RCFs.
As at 20 March 2020, Kingfisher had cash and cash equivalents of
c.GBP1.1 billion.
FY 19/20 final dividend
In light of the unprecedented uncertainty caused by COVID-19,
the Board will not propose a final dividend in relation to FY
19/20. The Board recognises the importance of dividends to
shareholders and intends to consider the appropriateness, quantum
and timing of an interim dividend payment for FY 20/21 when it has
a clearer view of the scale and duration of the impact of COVID-19
on the business.
COVID-19 response
Following on from our announcement on 16 March 2020, regarding
the impact of the COVID-19 pandemic on our business, the following
update is provided.
Managing operational and financial risk
Kingfisher's central and retail business crisis committees
continue to confer daily to monitor and manage risks and impacts of
COVID-19. We have also increased IT security measures across the
Group.
Kingfisher continues to closely monitor the financial impact of
COVID-19 and has launched multiple cash flow mitigation
actions.
Colleagues and customers
Kingfisher is committed to supporting local authorities and
governments to managing the COVID-19 pandemic .
As further government guidelines are released, we continue to
implement additional actions to protect the health and safety of
our employees. Social distancing and other measures are being
rolled out across our stores and corporate offices, along with
extensive work from home arrangements where appropriate.
Supply chain and availability
Kingfisher has global sourcing offices in China, other Asian
countries and Europe. Approximately 25% of our total annual cost of
goods sold (COGS) are directly sourced from Asia. We also source
from Eastern and Western Europe as part of our supply chain.
In China, nearly all our vendors' factories have reopened, with
capacity starting to rebuild. Over 85% of placed orders have a less
than 4-week delay against their original schedule. In Europe,
vendor factories in Italy have either closed or are expected to
soon close, following the recent announcement by the Italian
government. In addition, there is uncertainty over how goods can be
transported within the wider region. We are closely engaging with
our suppliers in this regard.
The overall risk to product availability is currently considered
to be manageable.
Temporary store closures
We are focused on making sure that we can continue to serve our
customer's essential needs in our markets as effectively as
possible, while protecting the health and security of all. The
status in each of our markets is as follows:
-- France. Following several government decisions in France,
while Kingfisher's stores in France have been declared 'essential'
(and therefore eligible to remain open), we decided to close
temporarily all our 221 stores from 15 March in order to comply
with the 15-day confinement period announced by the French
government. Our e-commerce websites remain open for home delivery
across France. In addition, from today, a large number of our
stores will start to offer click & collect services via
'drive-through', as we operate as best we can to serve the
essential needs of our communities.
-- Spain. All 28 stores in Spain have also closed until and
including Sunday 29 March, following the government's declaration
of a 2-week state of emergency.
Our stores in the UK remain open, serving the needs of our
communities for electricity, heating, plumbing and other home
essentials. We are putting measures in place to ensure we can run
stores safely, for customers and our people, including restricting
the number of people in store at any one time, reducing store
opening hours, strict social distancing rules, and protective
measures at checkouts. In addition, we are boosting our online home
delivery and click & collect capacity, including via a new
'drive-through' option to enable customers to collect their
purchases whilst minimising contact.
As of 22 March, all our stores in Ireland, Poland, Romania,
Portugal and Russia remain open, with similar measures as in the
UK.
Current trading since 1 February 2020
Trading since 1 February up to 14 March (before any
COVID-related store closures) continued the positive trends we saw
in Q4 19/20. In February 2020, Group LFL sales were +7.6%, or +2.3%
excluding the leap year impact.
In the first two weeks of this month (up to and including 14
March) Group LFL sales continued to be positive, with growth across
all businesses within our core markets, strongly supported by
e-commerce sales.
In the third week of March, the UK continued to be positive,
France was severely impacted by the closure of all its stores and
Poland experienced weak footfall and sales. Sales in our online
channel have grown significantly in recent weeks and we are
boosting our e-commerce capacity in all markets to meet this
demand.
Sales: 7 weeks % LFL(1) Change % LFL(1) Change % LFL(1) Change % LFL(1) Change
to Feb 2020 Mar 2020 week Mar 2020 week Mar 2020 week
21 March 2020 1(6) 2(6) 3(6)
(unaudited)
---------------- ---------------- ---------------- ---------------- ----------------
Constant Constant Constant Constant
currency currency currency currency
UK & Ireland +6.2% +2.1% +8.6% +37.7%
France +8.6% (0.2)% +5.6% (97.2)%
Poland +11.1% +3.6% +3.7% (21.7)%
Romania +16.4% +9.1% (1.3)% (4.8)%
Total Group(4)
excl. leap
year +2.3% +1.5% +6.6% (22.8)%
---------------- ---------------- ---------------- ---------------- ----------------
Total Group(4)
incl. leap
year +7.6%
---------------- ---------------- ---------------- ---------------- ----------------
E-commerce
sales(5) +29.9% +23.1% +26.3% *
---------------- ---------------- ---------------- ---------------- ----------------
* E-commerce sales for week 3 in March not yet available.
Thierry Garnier, CEO of Kingfisher said:
"We are committed to supporting our communities and governments
to manage the COVID-19 pandemic. We are very conscious of the
anxiety that the outbreak is causing for our colleagues and
customers and we'll do everything we can to support them. At the
same time, we are working hard to minimise the impact on our
business and financial performance.
"Since joining the business in late September 2019 my priorities
have been to build the executive team, stabilise our operational
performance and prepare a new plan. We have a strong new team in
place. We ended FY 19/20 in better shape after a challenging first
nine months, returning the Group to positive like-for-like sales
growth in Q4 as well as for the start of FY 20/21.
"These are unprecedented times. We'll get through them and, when
we do, we are as a team committed to returning Kingfisher to
growth."
Footnotes
(1) Like-for-like sales growth representing the constant
currency, year on year sales growth for stores that have been open
for more than a year.
(2) Brico Dépôt Spain & Portugal.
(3) Based on Banque de France data for DIY retail sales
(non-seasonally adjusted).
(4) Total Group including Iberia and Russia.
(5) E-commerce sales change includes UK & Ireland, France
and Poland, and the benefit from the leap year.
(6) March weekly sales figures are for Sunday-to-Saturday weeks
from 1 March 2020. The figures are provisional, and exclude certain
non-cash accounting adjustments relating to revenue
recognition.
Contacts
Tel: Email:
Investor Relations +44 (0) 20 7644 1082 investorenquiries@kingfisher.com
Media Relations +44 (0) 20 7644 1030 corpcomms@kingfisher.com
Teneo +44 (0) 20 7420 3184 Kfteam@teneo.com
About Kingfisher plc
Kingfisher plc is a home improvement company with over 1,350
stores in nine countries across Europe. We employ 77,000 people and
nearly six million customers shop in our stores and through our
websites and apps every week.
Our purpose at Kingfisher is to make home improvement accessible
to everyone.
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 at a time when the Company's
accounts are not yet finalised and the Company is still preparing
its financial results for the full year ended 31 January 2020. 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. It has been necessary to
make an announcement in response to the COVID-19 pandemic health
crises causing countries in which the Group operates to react in
ways that impact the freedom of movement of citizens and changing
normal working, living and supply and demand patterns. 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 and those of
our Officers, Directors and employees concerning, amongst 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, acts of war or
terrorism worldwide, work stoppages, slowdowns or strikes, public
health crises, outbreaks of contagious disease or environmental
disaster. By their nature, forward-looking statements involve
inherent 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. For further information regarding risks
to Kingfisher's business, please consult the risk management
section in the company's Annual Report (as published). 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 new information
or change in circumstances or in the Company's expectations.
This information is provided by RNS, the news service of the
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END
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