Darty plc announces Interim Management Statement for the period from 1 May 2014 to date

LONDON, 2014-9-11 — /EPR Retail News/ — Darty plc today announces an Interim Management Statement for the period 1 May 2014 to date. Financial information is for the Continuing Group (excluding Datart) for the first quarter period from 1 May 2014 to 31 July 2014, based on unaudited management accounts.

  • ‘4Ds’ plan to Drive trading, Digitalise Darty, Develop the brand and Deliver cost efficiency
    • Successful World Cup and summer sales campaigns with total revenue up 5.9 per cent and up 1.7 per cent on a like-for-like basis
    • Continued market outperformance in France and share gains in the Netherlands
    • Overall underlying Group gross margin was down 60 basis points, in line with our expectations
  • Further strengthening of Darty’s leadership position in France through:
    • the opening of a further nine franchise stores in the period, taking the total to 13 as we expand into smaller catchment areas, and continued significant sales uplifts
    • the roll-out of Mistergooddeal.com’s collection network to Darty stores
  • Completed the process of focusing the Group on its core businesses with the completion of the agreement to sell its majority shareholding in Datart

Q1 revenue change (3 months to 31 July)

Total Like-for-like
France 7.1% 2.0%
Belgium and the Netherlands 1.7% 0.7%
Total 5.9% 1.7%

 

Régis Schultz, Chief Executive, commented:

“During the quarter we continued to see the benefits of our ‘4Ds’ plan to Drive trading, Digitalise Darty, Develop the brand and Deliver cost savings. We gained further market share and benefitted from very positive Vision sales ahead of the football World Cup. We built on our leadership position in France with continued strong performance as we roll out our franchise opening programme and the use of Darty’s infrastructure for Mistergooddeal.com to increase our share of the low price/low service segment of the market. While we are cautious in our view of the markets, our plans for the peak period put us in a good competitive position for the coming months.”

Continuing Group

Like-for-like sales were up 1.7 per cent and total Group revenue was up 5.9 per cent including Mistergooddeal.com and franchise stores. We saw strong sales in Vision, particularly in May and June reflecting a successful football World Cup campaign and further growth in Communication. White Goods were stable, not benefitting to the same extent as last year from weather related purchases of refrigeration and air conditioning products. We saw a decline in Multi-media due to slowing volume growth and declining average selling prices for Tablets and a poor Digital Camera market. Our web-generated sales continued to grow, and including Mistergooddeal.com were up nearly 27 per cent, now representing over 16 per cent of total product sales. Group gross margin was down 60 basis points reflecting both mix and rate factors and excluding the dilutive impact of both Mistergooddeal.com and the franchise business which each represented around a further 30 basis point dilutive impact on total Group gross margin.

France

Darty again outperformed the market for the period, with like-for-like sales up 2.0 per cent and total revenue up 7.1 per cent including Mistergooddeal.com and the franchise business. We were pleased with the customer response to the July sale, but a cooler summer led to lower White Goods sales in the period. Overall web-generated sales continued to grow, albeit in a slower market, to nearly 15 per cent of total product sales, and nearly 18 per cent including Mistergooddeal.com. Underlying gross margin was down 70 basis points excluding the dilutive impact from Mistergoodeal.com and the franchise business, reflecting the mix effect of continued growth in Communications and lower White Goods sales as well as competitive market conditions.

The performance of the first franchise stores is very encouraging with significant sales uplifts and we opened a further nine during the period, giving a total of 13 franchise stores.

In a very competitive on-line market, initial trading at Mistergooddeal.com has been weaker than expected. This, together with a revised integration timetable, will result in a full year retail loss approximately €5 million higher than previously anticipated. Nevertheless our overall integration plan remains on track and we remain confident these plans will improve performance. These plans include common sourcing and specific ranges that have been introduced to the offer and over half of Darty’s stores can now be used as customer collection points, already representing over a quarter of all collections.

Belgium and the Netherlands

At Vanden Borre in Belgium and BCC in the Netherlands overall revenue was up 1.7 per cent, and up 0.7 per cent on a like-for-like basis. Web-generated sales continued to grow, up over 7 per cent, to 11 per cent of total product sales. Overall gross margin was up 30 basis points.

With a new management team in place, BCC saw a further improvement in performance, first seen at the end of last year with positive like-for-like sales, market share gains in most product categories and an improvement in gross margin. Vanden Borre focused trading on margin, which saw a strong improvement, with some impact on revenue against a strong performance last year.

Discontinued operation – Datart

As announced on 7 August 2014, the Group completed an agreement to sell its 60 per cent shareholding in Datart International, in a deal valued at €5 million.

Financial position

Except as detailed above, there have been no material events or transactions impacting the Group’s financial position that have taken place since the previously announced 30 April 2014 balance sheet date.

Store numbers as at 31 July 2014

 

2014 2013
France 226 226
Belgium and the Netherlands 117 116
343 342
Franchise stores 13*
Total groupe 356 342

*Includes 11 stores in France and 2 overseas

There will be a telephone conference call for analysts at 08:00 on 11 September 2014. Dial-in number: +44 (0) 20 3003 2666. A recording of this call will be made available after 10.00. Replay dial-in number: +44 (0) 20 8196 1998, Access Pin: 8419957.

The Group will issue its Half Year Results on Thursday 11 December 2014.

Enquiries

Analysts

Darty plc
Simon Ward +44 (0) 20 7269 1400

Media

UK
RLM Finsbury
Jenny Davey +44 (0) 20 7251 3801

France
Le Public Système
Ségolène de Saint Martin +33 1 41 34 23 31

About Darty plc
Darty group is a leading multi-channel service led electrical retailer operating over 340 stores in three European countries. It generated an annual turnover of nearly €3.5 billion in 2013/14 through operations in Darty in France, Vanden Borre in Belgium and BCC in the Netherlands. Its ordinary shares are listed with the UK Listing Authority and trade on the market for listed securities on the London Stock Exchange under the symbol DRTY.L. It is also listed on the NYSE Euronext Paris.

For further information, please visit the company’s website, www.dartygroup.com.

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, Darty plc does not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.