Darty plc announces total group revenue up 2.4% in its Interim Management Statement for the period 1 November 2014 to date

LONDON, 2015-2-13 — /EPR Retail News/ — Total Group revenue up 2.4 per cent. Further market share gain in France in challenging market conditions.

Darty plc today announces an Interim Management Statement for the period 1 November 2014 to date. Financial information is for the Continuing Group for the third quarter period from 1 November 2014 to 31 January 2015, based on unaudited management accounts.

Summary

  • Total Group revenue up 2.4 per cent; like-for-like sales down 2.9 per cent against a strong performance last year, a weaker than anticipated Multi-media market over peak, and the events in Paris in early January
  • Continued market outperformance by Darty in France in a market which reflects weak consumer confidence
  • Strong growth of nearly 10 per cent in like-for-like web-generated sales driven by a significant increase in click and collect
  • Underlying Group gross margin down around 90 basis points with product mix benefits more than off-set by the competitive market environment
  • 11 further franchise stores opened in France in the period, to total 34. Total franchise sales up significantly over the period
  • Completed the acquisition of 17 profitable stores for BCC as we build a leading multi-channel retailer in the Netherlands

Q3 year-on-year revenue change (3 months to 31 January)

Total Like-for-like
France 3.4% (3.0)%
Belgium and the Netherlands (1.6)% (2.3)%
Total 2.4% (2.9)%

 

Régis Schultz, Chief Executive, commented:

“Darty again outperformed the market and we saw total revenue grow thanks to our strategic initiatives. The market however remains challenging with weak consumer confidence. We were well prepared for the peak season, performed well over the Black Friday weekend and saw double digit growth in web sales, driven by a significant increase in click and collect, demonstrating the customer appeal of our multi-channel offer. Against a strong performance last year our overall sales in the period reflected a weaker than expected Tablet and Digital Camera market, which more than offset growth across other categories, and the impact of the events in Paris in early January.We have further strengthened our market positions in the period adding 11 new franchisees in France and completed the acquisition of 17 profitable stores in the Netherlands.In the near term we expect our markets to remain challenging and we continue to remain focused on improving productivity in our cost base and developing our growth initiatives.”

Continuing Group

Total Group revenue was up 2.4 per cent including Mistergooddeal.com and franchise stores. Like-for-like sales declined 2.9 per cent against a strong performance in the prior year. We continued to see good growth in Communications and progression in White Goods, and the rate of decline in Vision slowed compared to last year with strong growth in the new technologies/larger screen sizes. Net growth across these categories was more than off-set by a decline in Multi-media due to both falling volumes and average selling prices for Tablets and a weaker Digital Camera market. Our web-generated sales saw strong growth of nearly 10 per cent, and including Mistergooddeal.com, were up nearly 25 per cent to represent over 16 per cent of total product sales. Underlying Group gross margin was down around 90 basis points, with ongoing market pressures more than off-setting product mix benefits and excluding the dilutive mix impact of around 70 basis points in total from Mistergooddeal.com and the franchise business.

France

Darty outperformed the market, with total revenue up 3.4 per cent including Mistergooddeal.com and the franchise business, but saw like-for-like sales fall 3.0 per cent against a strong performance last year and a significant decline in footfall during the events in Paris in early January at the beginning of the sales period. Overall web-generated sales continued to grow, to nearly 15 per cent of total product sales, and nearly 18 per cent including Mistergooddeal.com. Darty.com sales grew by nearly 8 per cent with our multi-channel click and collect offer proving increasingly popular with 30 per cent of all web sales collected in store during December and a record number of visits to the site on the first day of the January sale.

Underlying gross margin was down around 100 basis points excluding the dilutive mix impact from Mistergooddeal.com and the franchise business, with the competitive market environment more than off-setting expected product mix benefits.

During the period our multi-channel specialist proposition received the LSA award for Click and Collect, the FEVAD Gold award for the best technical products web site and the “Coup de Coeur de la Rédaction” award for customer knowledge.

The sales performance of the franchise stores remains very encouraging with significant sales uplifts in the period and we opened a further 11 stores during the period, giving a total of 34 franchise stores in France.

Our focus at Mistergooddeal.com is on the integration with Darty, with the majority of the central functions merged in January. In an on-line market that remains very competitive, our focus on completing the integration will continue to have an impact on short-term performance.

Belgium and the Netherlands

At Vanden Borre in Belgium and BCC in the Netherlands overall revenue was down 1.6 per cent, and down 2.3 per cent on a like-for-like basis. Web-generated sales continued to grow, up over 18 per cent, to over 12 per cent of total product sales. Overall gross margin was down around 20 basis points.

Against a very strong performance last year Vanden Borre saw a decline in like-for-like sales despite a good performance during the January sales period, with trading impacted by a weak Multi-media market and a number of national strikes in December. BCC continued to see positive like-for-like sales.

The acquisition of 17 profitable stores from HiM Retail was completed on 2 February with the rebranding to BCC planned on a phased basis over the next few months. BCC now has 75 stores making it the leading multi-channel electrical retailer in its market.

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 31 October 2014 balance sheet date.

Store numbers as at 31 January

 

Store numbers
2015 2014
 France 228 226
 Franchises 34
Total France 262 226
Belgium and the Netherlands 118 116
Overseas franchises 3
Group Total 383 342

 

There will be a telephone conference call for analysts at 08:00 on 12 February 2015. 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) 20 350 6902, Access Pin: 4873126.

The Group will issue its Full Year Results on Thursday 18 June 2015.

Enquiries

Analysts

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

Media

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

France
Le Public Système
Ségolène de Saint Martin +33 1 41 34 22 06

About Darty plc
Darty group is a leading multi-channel service led electrical retailer operating over 380 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.