french home improvement and gardening retailer

Kingfisher has reported on trading for the year ended 31st January 2021.

Kingfisher France

£m	2020/21	2019/20	% Reported Change	% Constant Currency Change	% LFL Change
Castorama	2,265	2,145	+5.6%	+3.3%	+6.2%
Brico Dépôt	2,044	1,937	+5.5%	+3.2%	+3.8%
Total sales	4,309	4,082	+5.5%	+3.2%	+5.1%

Retail profit	181	164	+10.3%	+7.9%
Retail profit margin %	4.2%	4.0%	+20bps	+20bps

Kingfisher France sales increased by 3.2% (LFL +5.1%) to £4,309 million, reflecting strong trading from Q2 20/21 onwards, following the impact of COVID-related temporary store closures and disruption in Q1 20/21. The previously announced closure of eight Castorama stores impacted total sales growth by c.-2%. LFL sales growth also benefited by c.1% from our decision to gradually open more stores on Sundays, from Q3 20/21, in order to satisfy higher demand safely.

Our banners significantly improved their competitive position in the French home improvement market, in particular Castorama, where the banner outperformed the market for the first time in many years (based on Banque de France data, which shows DIY retail sales +6.1%in FY 20/21).

Gross margin % decreased by 120 basis points, largely reflecting more trading events at both banners, the upweighting of special promotions (arrivages), and higher supply & logistics costs (including storage costs arising from strike action at French ports, and the impact during the French lockdown period from closed ports and warehouses).

Retail profit increased by 7.9% to £181 million driven by an overall decrease in operating costs of 0.9%. Operating costs decreased largely due to cost saving initiatives and'activité partielle'relief, and the closure of eight Castorama stores. This was partially offset by higher staff costs (headcount and higher frontline staff incentives & bonuses) and COVID-related costs.

Castorama total sales increased by 3.3% (LFL +6.2%) to £2,265million. LFL sales of weather-related categories increased by c.12% while sales of non-weather-related categories, including showroom, increased by c.5%. Further commentary on many of the operational improvements made at Castorama France are detailed in 'We are making progress fixing issues from previous years', within Section 2. Castorama's e-commerce sales increased by 187% in FY 20/21, representing c.5% of total sales (FY 19/20: 2% of total sales).

Brico Dépôttotal sales increased by 3.2% (LFL +3.8%) to £2,044 million. The upweighting of arrivages sales increased as the business continued to re-establish its discounter credentials. Brico's sales performance rebounded strongly in Q2 20/21, following the COVID-related temporary store closures in Q1. In H2 20/21, sales performance remained strong but (relative to Castorama) was impacted by the less favourable trend for trade-oriented business versus general home improvement during periods of lockdown. Brico's e-commerce sales increased by 169% in FY 20/21, representing c.5% of total sales (FY 20/21: 2% of total sales).

The store closure programme announced in March 2019 is now complete. As part of this, we closed four loss-making Castorama stores during H1 20/21 and a further four stores in H2 20/21, resulting in an overall reduction in space in France of c.4% (year on year). Two of the Castorama stores that were closed in H2 20/21 will be reopened in FY 21/22 as Brico Dépôt stores, given the potential for discounter formats within these locations. In December 2020, Castorama opened a new high-street compact format store in Lille.

Read the full results here

Learn more about Kingfisher's UK & Ireland performance here

Source : Kingfisher PLC

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22 March 2021

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