Darty plc HY results 2015/16: significant improvement in our cash position

LONDON, 2015-12-11 — /EPR Retail News/ — Revenue and profit growth, positive contribution from our growth initiatives and a significant improvement in our cash position

  • Improving momentum with Q2 like-for-like sales1 up 4.7 per cent in France and 2.5 per cent for the Group.
  • Strong trading from the Summer sale and ‘Back to School’ period and market share gains in both France and Belgium.
  • Retail profit up 36 per cent for the Group to €36.1 million (2015: €26.4 million).
  • Good progress with our growth initiatives:

– 13 franchise stores opened bringing the total to 56. The franchise operation is profitable;
– 11 kitchen corners opened bringing the total to 82 with total sales up over 30 percent;and
– Break even achieved at Mistergooddeal.com.

  • Focus on working capital delivered a €92 million reduction in net debt year on year.

Financial Summary for the six months ended 31 October 2015²

  • Group revenue up 1.2 per cent to €1,664.5 million (2015: €1,644.4 million). Group like-for-like sales up 1.1 per cent (2015: down 1.2 per cent).
  • Group retail profit3 increased 36 per cent to €36.1 million (2015: retail profit €26.4 million). Retail profit up 51 per cent in France including €8 million of net property gains (2015: €nil) and up inBelgium. Increased losses in the Netherlands following disruption from a new IT system.
  • Exceptional items of €12.6 million (2015: €4.1 million) principally relating to restructuring in France and systems issues in the Netherlands.
  • Operating profit increased to €22.0 million (2015: €21.1 million).
  • Profit for the period was €1.9 million (2015: €0.8 million).
  • Adjusted profit before tax4 up 71 per cent to €24.3 million (2015: €14.2 million). Adjusted earnings per share was 2.5 cents (2015: 1.1 cents).
  • Net debt at the end of the period was €194.9 million (€287.2 million as at 31 October 2014) with net cash inflow including discontinued operations of €28.9 million (2015 outflow: €102.0 million).
  • The Board has declared an unchanged interim dividend of 0.875 cents per share, to be paid on 30 March 2016.

Offer from Groupe Fnac S.A. (“Fnac”)

  • On 20 November 2015 the Boards of Darty and Fnac announced agreement on the terms of a pre- conditional offer to be made by Fnac for Darty including:

– 1 Fnac share for every 37 Darty shares. Partial cash alternative of up to £66.7 million

  •  Based on the closing price of €55.6per Fnac share on 19 November this represents;

– Value of 105 pence per Darty share, and
– Premium of 33 per cent to closing price of 81.0 pence on 29 September;

  • Based on the closing price of €60.4 per Fnac share on 5 November 2015 (being the last business day before the date of the agreement on key offer terms announcement) this represents;

– Value of 116 pence per Darty share, and
– Premium of 47 per cent to closing price of 81.0 pence on 29 September

  • Darty shareholders would own around 46 per cent of the combined Group excluding the effect of the partial cash alternative;
  • Darty shareholders will be entitled to receive future dividends in the ordinary course prior to completion; and
  • Completion expected in or around mid 2016 if the offer receives phase 1 competition clearance or Q4 2016 if the offer receives phase 2 competition clearance.

Chairman Alan Parker commented:“This was a good first half performance as the benefits of our three year ‘Nouvelle Confiance’ strategy delivered clear results. We have devised a new plan, ‘Confiance 4.0’, to secure further growth building on our market leadership position, strong brand, improved customer service offer and expansion into new catchment areas through our franchise programme.“On 20 November Fnac launched a pre-conditional offer for Darty but until such a time as that offer completes, we remain fully committed to delivering on our plans and it remains business as usual.”Chief Executive Régis Schultz commented:“We have made a strong start to the year with market share gains, significantly improved profit performance and a substantial reduction in our net debt.“Our growth initiatives, the franchise operation, extended kitchen offer and Mistergooddeal.com, are progressing and delivering good results. We also continue to innovate in terms of digitalisation and have enhanced our market leading services with same and next day delivery and installation in France for large appliances and the launch of a services market place.“Sales have held up well in the past few weeks despite events in France and Belgium and we are well prepared for the peak trading period.”

¹Calculated based on stores that have been open for a full year and the first full four weeks of trading have passed. Stores where retail space has been added or where a complete format redesign has taken place which involves material capital expenditure are excluded. Sales through internet sites, excluding Mistergooddeal.com, are included.
² Excluding results of discontinued operations except where stated otherwise.
³ Represents total operating profit before the share of joint venture and associates’ interest and taxation, gain on disposal of available for sale investments, legacy UK retirement benefit scheme expenses, exceptional items and amortisation and impairment of acquisition related intangible assets.
4 Represents retail profit less finance costs excluding net interest on pension schemes.
There will be a presentation to analysts and institutions at 09:30 today at UBS, 1 Finsbury Avenue, London, EC2M 2PP. A live video and audio webcast of the event will be available via our website www.dartygroup.com, and recorded for access later in the day. Darty plc will issue an Interim Management Statement on 18 February 2016 for the third quarter trading period of 1 November 2015 to 31 January 2016.

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 / +33 6 16 40 90 73

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.

Download Statement of Results for the six months ended 31 October 2015

SOURCE: Darty plc