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Article Excerpt
OPERATOR: Welcome to Kesa Electricals interim management statement. My name is Sarah and I will be your coordinator for today's conference. For the duration of the call you will be on listen-only. However, at the end of the call you will have the opportunity to ask questions. (OPERATOR INSTRUCTIONS) I am now handing you over to Simon Herrick to begin today's conference.
SIMON HERRICK, FINANCE DIRECTOR, KESA ELECTRICALS PLC: Good morning. Thanks for joining Jean-Noel and myself for this interim management statement conference call. This covers the first three months of our new financial year to July 31. I appreciate that you all have a busy morning with other retailers reporting and we have our AGM later. So I'll briefly run through the statement and then hand over to you guys for any questions.
So helped by continuing strength of the euro, the total Group reported in sterling sales increased by 14.4%, which was a 3.3% increase at constant exchange rate. The total Group like-for-like sales fell by 4.7%. Note the revenues for Menaje del Hogar is in this year's total revenue figures. It will not be included in the like-for-like numbers until October when we'll have a full year of trading from the date of acquisition, which was September 17 last year.
As you are no doubt already aware, trading conditions across all our markets deteriorated during the quarter, but particularly in the UK. Darty's total revenue was flat in the period, down 3.2% on a like-for-like basis, but maintaining a stable margin. In a seasonally quite period, Darty Box's total subscribers reached 150,000. and we still expect to reach our full-year target of 240,000 subscribers. Darty opened three new stores during the period, and after the initial trial of last year, introduced kitchen corners in five more stores.
The market in the UK was particularly tough and promotional. Comet's revenue was down 6.6% and 9.9% on a like-for-like basis. White goods sales were particularly weak and consequently the mix impact on margin was higher than last year, circa 100 basis points. And we expect Comet to post a loss in its first half. Comet continued its store program during the period, with the installation of six mezzanine floors, one in a relocated store and five in refurbished stores, bringing the total number of mezzanines to 29.
Revenue at our our businesses grew 34.9% at constant exchange rate. And like-for-like sales grew by 1.4% against particularly strong comparatives from last year of only 11%. Overall, our smaller established businesses, BCC, Vanden Borre and Datart, operate in markets clearly not immune from the wider global conditions, but we are still seeing good total sales growth.
Very poor market conditions continued in Spain and sales at Menaje del Hogar remain disappointing. We continue to focus on implementing our integration program. Trading in Italy, Switzerland and Turkey progressed well. In Turkey, we recently opened our first stores outside Istanbul in Izmit and Izmir.
Market conditions have not changed since the period end and you cannot expect any improvement in the short term. We have in place robust action plans to protect margins, adjust costs and generate cash while maintaining key strategic investments to secure our long-term growth.
Finally, in what can only be described as very difficult credit markets, we have secured our bank funding out until 2013 by agreeing a five-year EUR500m committed revolving credit facility, which replaces the Group's existing facility which was due to expire in July 2010.
Thank you very much. Jean-Noel and I are now happy to take some questions.
OPERATOR: (OPERATOR INSTRUCTIONS) The first question comes from the line of Boris Bourdet from Natixis Securities. Go ahead please.
BORIS BOURDET, ANALYST, NATIXIS SECURITIES: Hello. Three questions for you. The first one is on the Darty margins. In the press release you say that the margins were stable. My understanding is that the gross margins were stable and then that you have implemented some measures to protect costs to optimize cost structure. So is your previous guidance of minus 30, minus 40 basis points in terms of operating margin still okay or at risk?
The second question, could you elaborate a little bit on the international division? And maybe give us the number of the sales achieved in Spain?
And, back to Darty on that Darty Box, how do you -- my understanding is that you had only 10,000 more customers over the Q1 period and I was wondering how you could still maintain the guidance of 100,000 for the full year? Thank you.
JEAN-NOEL LABROUE, CHIEF EXECUTIVE, KESA ELECTRICALS PLC: Good morning, Boris. Jean-Noel speaking.
BORIS BOURDET: Good morning.
JEAN-NOEL LABROUE: So, starting by the Darty margin, it is as we said, we are putting all our efforts in protecting margin, which we usually do in these very difficult market conditions. So we were very satisfied to have been able to stabilize the margin in Q1. And I confirm that the guidance of minus 30, minus 40, for the full year is, for us, fairly secure.
So no change on the guidance and we will try to do better. And we are aiming to stabilize Darty margin on the full year basis. This is our target, the minus 30, minus 40, is I think a reasonable guidance.
BORIS BOURDET: Okay.
JEAN-NOEL LABROUE: On the Box, I confirm that with the 10,000 on this quarter, which is a really low seasonal quarter in terms of activity. Considering the trends we are seeing in August and the back-to-school, etc., etc., I am still in...
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