Strong peak trading and further improvement in cash position
PARIS, 2016-Feb-18 — /EPR Retail News/ — Darty plc today announces third quarter trading for the period 1 November 2015 to 31 January 2016, based on unaudited management accounts.
Summary
- Successful Christmas and winter sale periods, with a strong development of click and collect up 53 per cent at Darty
- Continued market outperformance in France with like-for-like sales up 4.4 per cent, positive like-for-like sales in Belgium and a decline in the Netherlands due to new warehouse IT system, which lessened towards the end of the period
- ‘Confiance 4.0’ plan on track and delivering strong results in terms of cash, costs, franchises and multi-channel development
- Focus on working capital resulted in average net debt for the quarter reducing by nearly €100 million compared to the same quarter last year
Q3 revenue change (3 months to 31 January)
| Total** | Like-for-like* | |
| France | 2.8% | 4.4% |
| Belgium and the Netherlands | 2.1% | (3.8)% |
| Total | 2.6% | 2.7% |
*excluding Mistergooddeal.com
**including Mistergooddeal.com
Régis Schultz, Chief Executive, commented:
“Despite events in Paris we performed well over Christmas and the winter sale period with a competitive offer and good product availability. Through the continued efforts of all our teams and the improvements made in the business over recent years we continued to outperform the market in France with Darty’s like-for-like sales up 4.4 per cent, and Belgium delivered a third successive quarter of positive like-for-like sales.
“The Group is moving at pace on our ‘Confiance 4.0’ plan with continuation of our multi-channel and franchise growth, cost initiatives and an improving cash position.”
Group
Total Group revenue was up 2.6 per cent and up 4.0 per cent excluding Mistergooddeal.com. Like-for-like sales increased by 2.7 per cent. We saw positive sales in all major product categories apart from multi-media, where the market remained weak. Sales were particularly strong in communication and we saw a second quarter of positive vision sales.
Our web-generated sales continued to grow, up 12 per cent excluding Mistergooddeal.com, now representing 16 per cent of total product sales. Underlying group gross margin was down around 40 basis points for the period with a less favourable product mix than earlier in the year. Mistergoodeal.com then had a positive impact of around 20 basis points and there was a dilutive impact of around 30 basis points from the franchise business.
France
Darty excluding Mistergooddeal.com continued to outperform the market, with total revenue up 4.5 per cent and like-for-like sales up 4.4 per cent. We were well prepared for and traded well over the Christmas and winter sale periods, with a wide range and good availability of products. Whilst footfall in stores reduced, conversion rates improved. As a result of our good social relations we were one of the first retailers able to open additional stores on a Sunday, with those opened in Paris seeing double digit sales growth.
Darty’s web-generated sales represented over 16 per cent of total product sales. This was driven by a 53 per cent growth in click and collect sales, which reached a record 64 per cent of web sales on Christmas Eve. We also saw a best ever Sunday trading on Darty.com during the Black Friday weekend and a record 1.4 million visits to Darty.com on the first day of the winter sale.
Overall gross margin for France was down around 60 basis points, with underlying gross margin down around 50 basis points. We continued to grow the profitable franchise business with a further 7 openings to total 59 in France, which had a dilutive impact of around 40 basis points on gross margin. Mistergooddeal.com had a positive impact of around 20 basis points on gross margin and whilst its revenue remains under pressure the business is breakeven.
Belgium and the Netherlands
At Vanden Borre in Belgium and BCC in the Netherlands overall revenue was up 2.1 per cent and like-for-like sales were down 3.8 per cent. Web-generated sales continued to grow strongly, up over 8 per cent, to over 14 per cent of total product sales. Overall gross margin was up around 10 basis points.
Vanden Borre delivered a third successive quarter of positive like-for-like sales, with strong web sales, but continued to see some small gross margin pressure from competitive market conditions.
Gross margin again improved at BCC. Revenue however continued to see some disruption from the implementation of a new warehouse IT system, which lessened towards the end of the period.
Financial position
Our cash enhancement programme continued to deliver an improvement in working capital with average net debt for the quarter reducing by nearly €100 million compared to the same quarter last year, resulting in the Group’s €225 million revolving credit facility being undrawn (31 January 2015: €150 million drawn). Our objective remains to reduce average net debt by at least €50 million for the year compared to the prior year and to reduce year end net debt by around €40 million compared to the prior year end.
There will be a telephone conference call for analysts at 08.00 on 18 February 2016. 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: 7570986#.
The Group will issue its Full Year Results on Thursday 16 June 2016.
Enquiries
Analysts
Darty plc
Simon Ward
+44 (0) 20 7269 1400
Media
UK
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 400 stores and websites in three European countries. It generated an annual turnover of over €3.5 billion in 2014/15 through its operations of Darty and Mistergooddeal.com 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.
APPENDIX
Store numbers as at 31 January
| 2016 | 2015 | |
| France | 223 | 228 |
| Belgium and the Netherlands | 137 | 118 |
| 360 | 346 | |
| Franchise Stores* | 63* | 37 |
| Group Total | 423 | 383 |
*Includes 59 stores in France (2015:34) and 4 overseas (2015:3)