Thursday 21 May 2015

Darty plc Q4 Trading Statement

Total Group revenue up 3.5 per cent and market share gains

Darty plc today announces a trading update for the fourth quarter period from 1 February 2015 to 30 April 2015¹.

Summary

·     Total Group revenue up 3.5 per cent reflecting our strategic growth initiatives

o  Six further franchise stores opened in the period, to total 43

o  Completed the acquisition of 18 profitable stores for BCC as we build the leading multi-channel retailer in  the Netherlands

·     Group like-for-like sales down 0.5 percent but up 1.0 per cent* after adjusting for a material calendar effect in the  quarter, with growth in communication and white goods sales off-setting a continued weak multimedia market.

·     Market out performance in France, Belgium and the Netherlands.

·     Strong growth of over 13 per cent in like-for-like web-generated sales driven by a significant increase in click and  collect.

·     Underlying Group gross margin down 20 basis points with an improving trend through the quarter.

Revenue change

    * Group like-for-like sales up 1.0 per cent after adjusting for negative calendar effect of 1.5 per cent in the quarter.

Régis Schultz, Chief Executive, commented:

"All our businesses outperformed their markets in the quarter where we saw total sales grow strongly thanks to both the increasing appeal of our multi-channel offer in-store and on-line and our strategic initiatives where we opened a further six franchise stores and have largely completed the rebranding to BCC of the 18 stores acquired in the Netherlands.

"Despite improving consumer confidence our markets remain challenging, particularly in multimedia. We continue to develop our customer offer through initiatives such as the recent launch of same day delivery in Paris and Lyon, improve productivity and deliver our strategic growth initiatives."

¹ Based on unaudited management accounts

Continuing Group

Total Group revenue was up 3.5 per cent including Mistergooddeal.com and revenues from franchise stores.  Like-for-like sales were down 0.5 per cent, but up 1.0 per cent after adjusting for a material calendar impact in the quarter. In terms of product categories, revenue growth continued to be driven by communication and white goods sales, but multimedia remained weak with both falling volumes and average selling prices in tablets and digital cameras. Our web-generated sales continued to see strong growth of over 13 per cent, and including Mistergooddeal.com, were up 16 percent to represent over 16 per cent of total product sales. The decline in underlying Group gross margin moderated, down 20 basis points, benefiting from the product mix and excluding the dilutive mix impact of around 50 basis points in total from the franchise business and Mistergooddeal.com.

France

Darty outperformed the market, with total revenue up 2.8 per cent including Mistergooddeal.com and the franchise business, and like-for-like sales were down 0.7 per cent. Web-generated sales continued to grow, to over 15 per cent of total product sales, and 17 per cent including Mistergooddeal.com. Sales at a refreshed Darty.com grew by over eight per cent with further growth in our multi-channel click and collect offer, with over 20 per cent of all web sales in the period collected in store. Underlying gross margin was down around 50 basis points excluding the dilutive mix impact from the franchise business and Mistergooddeal.com.

During the period Darty received the "Nuit des Rois" digital marketing award for Le Bouton and the "IREF Satisfaction Clients" award for the electricals sector. Our leading service offer was further enhanced with the launch of same day delivery in Paris and Lyon for large appliances ordered by 16:00, with delivery by 21:00 and same day service intervention in Paris if contacted by16:00.

The sales performance of the franchise stores remains encouraging with significant sales uplifts in the period. We opened a further six stores during the period, giving a total of 43 franchise stores.

The integration of Mistergooddeal.com into Darty progressed as planned with the back office operations now fully integrated and the new website launched on Darty's IT platform.

Belgium and the Netherlands

At Vanden Borre in Belgium and BCC in the Netherlands overall revenue was up 6.4 per cent, benefitting from the store acquisition in the Netherlands, and was flat on a like-for-like basis. BCC continued to see positive like-for-like sales and Vanden Borre saw an improved trend with its best quarterly performance of the year. Web-generated sales continued to grow, up nearly 37 per cent, to over 15 per cent of total product sales, benefiting from Vanden Borre introducing same day delivery during the period. Overall gross margin was up around 90 basis points.

The acquisition of 18 profitable stores from HiM Retail was completed on 2 February and the majority of the stores have been rebranded to BCC. BCC now has 75 stores making it the leading multi-channel electrical retailer in its market.

Restatement of financial statements for the year ended 30 April 2014

Two accounting treatments are possible for the business tax, CVAE (Cotisation sur la Valeur Ajoutée des Entreprises) - either as an operating expense or as income tax. In line with the treatment adopted by French retail listed peers the decision has been taken to reclassify from an operational expense in the retail profit of the France reported segment, to income tax. CVAE was €11.1 million for the year ended 30 April 2014 and is expected to be a similar amount for the year ended 30 April 2015.

In addition, having reviewed possible treatments under IAS19 Revised, retirement benefit scheme expenses of €1.4 million relating to the legacy UK pension scheme have been reclassified from finance costs to operating profit in line with most common practice. These costs have been reclassified as an operating cost, outside of retail profit, as they relate to Comet, a discontinued business.

Restatement of the Group income statement ended 30 April 2014 is attached as an appendix to this announcement.

There will be a telephone conference call for analysts at 08:00 on 21 May 2015. Dial-in number: +44 (0) 20 3003 2666. A recording of this call will be made available after 10.00am. Replay dial-in number: +44 (0) 20 8196 1998, Access Pin: 8495139#.

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

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 400 stores in three European countries. It generated an annual turnover of nearly €3.5 billion in 2013/14 through operations in 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.

APPENDICES

Store numbers as at 30 April

* Includes stores in Martinique, Guadeloupe, Guiana and Reunion

Segmental revenue for 2014/15

Total revenue change

Like-for-like sales

Restatement of financial statements for the year ended 30 April 2014

Group income statement