Rona aims for 10-15 percent EPS growth

Mon Jan 25, 2010 4:03pm EST
 
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By Scott Anderson

TORONTO (Reuters) - Rona Inc, Canada's biggest home improvement chain, said on Monday it plans to boost earnings per share by 10 percent to 15 percent over the next two years and bulk up its national presence by adding new stores and bringing some of its other chains under one banner.

The Boucherville, Quebec-based company, which has about 700 stores across the country, said during an investor presentation that it would also continue its aggressive growth strategy by looking for further acquisition opportunities.

The overall aim of Rona's "New World Program" is to boost its share of the Canadian market to 20 percent from its present 17.5 percent, while increasing its EBITDA margin by 20 basis points to 30 basis points during the period.

It also sees same store sales growth of about 2.5 percent.

This follows a disappointing quarter in which the company's results hit by weak consumer sentiment and a weak home renovation market.

In November it reported that its quarterly earnings fell to C$49.1 million ($46 million), or 38 Canadian cents a share, from C$52.5 million, or 45 Canadian cents a share, a year earlier.

Revenue fell 4.4 percent to C$1.32 billion as same store sales, a measure of the performance of stores open for at least a year, dropped 5.3 percent.

Rona's shares were up 0.7 percent at C$16.68 on Monday afternoon on the Toronto Stock Exchange.   Continued...