REG - Kingfisher PLC - Interim results part 2

Wed Sep 12, 2012 2:01am EDT

* Reuters is not responsible for the content in this press release.

RNS Number : 0450M
Kingfisher PLC
12 September 2012
 



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED INCOME STATEMENT

 








Half year ended 28 July 2012


Half year ended 30 July 2011



Before

Exceptional



Before

Exceptional




exceptional

items



exceptional

items


£ millions

Notes

items

(note 5)

Total


items

(note 5)

Total

Sales

4

5,478

-

5,478


5,662

-

5,662

Cost of sales


(3,453)

-

(3,453)


(3,559)

-

(3,559)

Gross profit


2,025

-

2,025


2,103

-

2,103

Selling and distribution expenses


(1,406)

4

(1,402)


(1,407)

-

(1,407)

Administrative expenses


(271)

(11)

(282)


(282)

-

(282)

Other income


19

1

20


16

-

16

Share of post-tax results of joint ventures and associates

 

 

7

-

7


13

-

13

Operating profit


374

(6)

368


443

-

443










Analysed as:









Retail profit

 4

403

(6)

397


473

-

473

Central costs


(22)

-

(22)


(21)

-

(21)

Share of interest and tax of joint ventures and associates


(7)

-

(7)


(9)

-

(9)










Finance costs


(11)

-

(11)


(12)

-

(12)

Finance income


7

-

7


7

-

7

Net finance costs

6

(4)

-

(4)


(5)

-

(5)

Profit before taxation


370

(6)

364


438

-

438

Income tax expense

7

(106)

1

(105)


(118)

-

(118)

Profit for the period


264

(5)

259


320

-

320










Attributable to:









Equity shareholders of the Company




259




321

Non-controlling interests




-




(1)





259




320










Earnings per share

8








Basic




11.1p




13.7p

Diluted




10.9p




13.5p

Adjusted basic




11.5p




13.5p

Adjusted diluted




11.2p




13.2p

 

The proposed interim dividend for the period ended 28 July 2012 is 3.09p per share.



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED INCOME STATEMENT

 



Year ended 28 January 2012



Before

Exceptional




exceptional

items


£ millions

Notes

items

(note 5)

Total

Sales

4

10,831

-

10,831

Cost of sales


(6,748)

-

(6,748)

Gross profit


4,083

-

4,083

Selling and distribution expenses


(2,769)

(9)

(2,778)

Administrative expenses


(560)

-

(560)

Other income


33

(3)

30

Share of post-tax results of joint ventures and associates


32

-

32

Operating profit


819

(12)

807






Analysed as:





Retail profit

 4

882

(12)

870

Central costs


(43)

-

(43)

Share of interest and tax of joint ventures and associates


(20)

-

(20)






Finance costs


(31)

-

(31)

Finance income


21

-

21

Net finance costs

6

(10)

-

(10)

Profit before taxation


809

(12)

797

Income tax expense

7

(165)

7

(158)

Profit for the year


644

(5)

639






Attributable to:





Equity shareholders of the Company




640

Non-controlling interests




(1)





639






Earnings per share

8




Basic




27.5p

Diluted




26.9p

Adjusted basic




25.1p




24.6p



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

£ millions

Half year ended

28 July 2012

Half year ended

30 July 2011

Year ended

28 January 2012

Profit for the period

259

320

639

Actuarial (losses)/gains on post employment benefits

(66)

(19)

20

Currency translation differences




Group

(144)

16

(128)

Joint ventures and associates

(12)

3

(10)

Cash flow hedges




Fair value gains/(losses)

10

(13)

10

(Gains)/losses transferred to inventories

(8)

12

8

Tax on other comprehensive income

21

5

(9)

Other comprehensive income for the period

(199)

4

(109)

Total comprehensive income for the period

60

324

530





Attributable to:




Equity shareholders of the Company

61

325

530

Non-controlling interests

(1)

(1)

-


60

324

530



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 


Attributable to equity shareholders of the Company

 

 

£ millions

Share capital

 

Share

premium

Own shares held

 

Retained earnings

Other reserves (note 12)

Total

Non-controlling interests

Total equity

At 29 January 2012

372

2,199

(134)

2,869

413

5,719

8

5,727

Profit for the period

-

-

-

259

-

259

-

259

Actuarial losses on post employment benefits

-

-

-

(66)

-

(66)

-

(66)

Currency translation differences Group

-

-

-

-

(143)

(143)

(1)

(144)

Joint ventures and associates

-

-

-

-

(12)

(12)

-

(12)

Cash flow hedges

Fair value gains

-

-

-

-

10

10

-

10

Gains transferred to inventories

-

-

-

-

(8)

(8)

-

(8)

Tax on other comprehensive income

-

-

-

19

2

21

-

21

Other comprehensive income for the period

-

-

-

(47)

(151)

(198)

(1)

(199)

Total comprehensive income for the period

-

-

-

212

(151)

61

(1)

60

Share-based compensation

-

-

-

11

-

11

-

11

New shares issued under share schemes

-

1

-

-

-

1

-

1

Own shares issued under share schemes

-

-

61

(57)

-

4

-

4

Dividends

-

-

-

(148)

-

(148)

-

(148)

At 28 July 2012

372

2,200

(73)

2,887

262

5,648

7

5,655










At 30 January 2011

371

2,194

(42)

2,390

539

5,452

8

5,460

Profit for the period

-

-

-

321

-

321

(1)

320

Actuarial losses on post employment benefits

-

-

-

(19)

-

(19)

-

(19)

Currency translation differences Group

-

-

-

-

16

16

-

16

Joint ventures and associates

-

-

-

-

3

3

-

3

Cash flow hedges

Fair value losses

-

-

-

-

(13)

(13)

-

(13)

Losses transferred to inventories

-

-

-

-

12

12

-

12

Tax on other comprehensive income

-

-

-

6

(1)

5

-

5

Other comprehensive income for the period

-

-

-

(13)

17

4

-

4

Total comprehensive income for the period

-

-

-

308

17

325

(1)

324

Share-based compensation

-

-

-

17

-

17

-

17

New shares issued under share schemes

1

-

-

-

-

1

-

1

Own shares issued under share schemes

-

-

21

(20)

-

1

-

1

Own shares purchased

-

-

(117)

-

-

(117)

-

(117)

Dividends

-

-

-

(121)

-

(121)

-

(121)

Purchase of non-controlling interests

-

-

-

(7)

-

(7)

-

(7)

At 30 July 2011

372

2,194

(138)

2,567

556

5,551

7

5,558



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 


Attributable to equity shareholders of the Company

 

 

 

£ millions

Share capital

 

Share

premium

Own shares held

 

Retained earnings

Other reserves (note 12)

Total

Non-controlling interests

Total equity

At 30 January 2011

371

2,194

(42)

2,390

539

5,452

8

5,460

Profit for the year

-

-

-

640

-

640

(1)

639

Actuarial gains on post employment benefits

-

-

-

20

-

20

-

20

Currency translation differences

Group

-

-

-

-

(129)

(129)

1

(128)

Joint ventures and associates

-

-

-

-

(10)

(10)

-

(10)

Cash flow hedges

Fair value gains

-

-

-

-

10

10

-

10

Losses transferred to inventories

-

-

-

-

8

8

-

8

Tax on other comprehensive income

-

-

-

(4)

(5)

(9)

-

(9)

Other comprehensive income for the year

-

-

-

16

(126)

(110)

1

(109)

Total comprehensive income for the year

-

-

-

656

(126)

530

-

530

Share-based compensation

-

-

-

32

-

32

-

32

New shares issued under share schemes

1

5

-

-

-

6

-

6

Own shares issued under share schemes

-

-

25

(23)

-

2

-

2

Own shares purchased

-

-

(117)

-

-

(117)

-

(117)

Dividends

-

-

-

(178)

-

(178)

-

(178)

Purchase of non-controlling interests

-

-

-

(8)

-

(8)

-

(8)

At 28 January 2012

372

2,199

(134)

2,869

413

5,719

8

5,727



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED BALANCE SHEET

£ millions

Notes

At

28 July 2012

At

30 July 2011

At

28 January 2012

Non-current assets





Goodwill


2,396

2,398

2,397

Other intangible assets


148

98

123

Property, plant and equipment


3,573

3,754

3,667

Investment property


52

40

55

Investments in joint ventures and associates


256

266

271

Post employment benefits

11

-

-

25

Deferred tax assets


20

24

23

Derivatives


57

56

66

Other receivables


18

19

17



6,520

6,655

6,644

Current assets





Inventories


1,932

1,956

1,844

Trade and other receivables


567

574

531

Derivatives


33

11

26

Current tax assets


2

38

1

Cash and cash equivalents


613

594

587



3,147

3,173

2,989

Total assets


9,667

9,828

9,633






Current liabilities





Trade and other payables


(2,558)

(2,558)

(2,356)

Borrowings


(315)

(253)

(367)

Derivatives


(5)

(19)

(6)

Current tax liabilities


(314)

(386)

(305)

Provisions


(45)

(26)

(16)



(3,237)

(3,242)

(3,050)

Non-current liabilities





Other payables


(107)

(79)

(121)

Borrowings


(334)

(563)

(375)

Derivatives


(2)

(14)

(8)

Deferred tax liabilities


(252)

(262)

(269)

Provisions


(36)

(42)

(43)

Post employment benefits

 11

(44)

(68)

(40)



(775)

(1,028)

(856)

Total liabilities


(4,012)

(4,270)

(3,906)






Net assets


5,655

5,558

5,727






Equity





Share capital


372

372

372

Share premium


2,200

2,194

2,199

Own shares held


(73)

(138)

(134)

Retained earnings


2,887

2,567

2,869

Other reserves

12

262

556

413

Total attributable to equity shareholders of the Company


5,648

5,551

5,719

Non-controlling interests


7

7

8

Total equity


5,655

5,558

5,727

 

The interim financial report was approved by the Board of Directors on 11 September 2012 and signed on its behalf by:

 

 

 

Ian Cheshire, Group Chief Executive

Kevin O'Byrne, Group Finance Director



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED CASH FLOW STATEMENT

 

£ millions

Notes

Half year ended

28 July 2012

Half year ended

30 July 2011

Year ended

28 January 2012

Operating activities





Cash generated by operations

13

535

375

827

Income tax paid


(74)

(68)

(148)

Net cash flows from operating activities


461

307

679






Investing activities





Purchase of businesses


-

(2)

(2)

Purchase of property, plant and equipment, investment property and intangible assets


(172)

(263)

(450)

Disposal of property, plant and equipment, investment property and intangible assets


6

-

9

Interest received


7

6

19

Dividends received from joint ventures and associates


10

9

10

Net cash flows from investing activities


(149)

(250)

(414)






Financing activities





Interest paid


(9)

(9)

(22)

Interest element of finance lease rental payments


(2)

(2)

(5)

Repayment of bank loans


(5)

(8)

(10)

Repayment of Medium Term Notes and

other fixed term debt


-

(10)

(30)

Payment on financing derivatives


-

(3)

(5)

Capital element of finance lease rental payments


(6)

(6)

(16)

New shares issued under share schemes


1

1

6

Own shares issued under share schemes


4

1

2

Own shares purchased


-

(117)

(117)

Purchase of non-controlling interests


-

(7)

(8)

Dividends paid to equity shareholders of the Company


(148)

(121)

(178)

Net cash flows from financing activities


(165)

(281)

(383)






Net increase/(decrease) in cash and cash equivalents and bank overdrafts


147

(224)

(118)

Cash and cash equivalents and bank overdrafts at beginning of period


485

636

636

Exchange differences


(51)

22

(33)

Cash and cash equivalents and bank overdrafts at end of period

14

581

434

485



KINGFISHER PLC

2012/13 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.         General information

Kingfisher plc ('the Company'), its subsidiaries, joint ventures and associates (together 'the Group') supply home improvement products and services through a network of retail stores and other channels, located mainly in the United Kingdom, continental Europe and China.

 

Kingfisher plc is a company incorporated in the United Kingdom.

 

The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.

 

The Company is listed on the London Stock Exchange.

 

The interim financial report does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Audited statutory accounts for the year ended 28 January 2012 were approved by the Board of Directors on 21 March 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.

 

The interim financial report has been reviewed, not audited, and was approved by the Board of Directors on 11 September 2012.

 

2.         Basis of preparation

 

The interim financial report for the 26 weeks ended 28 July 2012 ('the half year') has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial Reporting', as adopted by the European Union. It should be read in conjunction with the annual financial statements for the year ended 28 January 2012, which have been prepared in accordance with IFRSs as adopted by the European Union. The consolidated income statement and related notes represent results for continuing operations, there being no discontinued operations in the periods presented. Where comparatives are given, '2011/12' refers to the prior half year.

 

There have been no changes in estimates of amounts reported in prior periods that have had a material effect in the current period.

 

The Directors of Kingfisher plc, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the condensed consolidated financial statements for the half year ended 28 July 2012.

 

Principal rates of exchange against Sterling

 


Half year ended
28 July 2012

Half year ended
30 July 2011

Year ended
28 January 2012


Average

rate

Period end

rate

Average

rate

Period end

rate

Average

rate

Year end

rate

Euro

1.23

1.27

1.14

1.14

1.15

1.19

US Dollar

1.58

1.57

1.62

1.65

1.60

1.57

Polish Zloty

5.16

5.24

4.54

4.57

4.80

5.04

Chinese Renminbi

9.99

10.02

10.56

10.59

10.31

9.94

 

Use of non-GAAP measures

 

Kingfisher believes that retail profit, adjusted pre-tax profit, effective tax rate, adjusted post-tax profit and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These and other non-GAAP measures such as net debt/cash are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items', 'adjusted', 'effective tax rate' and 'net debt/cash' are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures.

 

Retail profit is defined as continuing operating profit before central costs (principally the costs of the Group's head office), exceptional items, amortisation of acquisition intangibles and the Group's share of interest and tax of joint ventures and associates.

The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group's underlying business performance. The principal items which are included as exceptional items are:

·      non trading items included in operating profit such as profits and losses on the disposal, closure or impairment of subsidiaries, joint ventures, associates and investments which do not form part of the Group's trading activities;

·      profits and losses on the disposal of properties; and

·      the costs of significant restructuring and incremental acquisition integration costs.

 

The term 'adjusted' refers to the relevant measure being reported for continuing operations excluding exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and prior year tax items. Financing fair value remeasurements represent changes in the fair value of financing derivatives, excluding interest accruals, offset by fair value adjustments to the carrying amount of borrowings and other hedged items under fair value hedge relationships. Financing derivatives are those that relate to underlying items of a financing nature.

 

The effective tax rate represents the effective income tax expense as a percentage of continuing profit before taxation excluding exceptional items. Effective income tax expense is the continuing income tax expense excluding tax on exceptional items and tax adjustments in respect of prior years and the impact of changes in tax rates on deferred tax.

 

Net debt (or net cash) comprises borrowings and financing derivatives (excluding accrued interest), less cash and cash equivalents and current other investments.

 

3.         Accounting policies

 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 28 January 2012, as described in note 2 of those financial statements.

 

Taxes on income for interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

 

There are no standards, amendments to standards or interpretations that are both mandatory for the first time for the financial year ending 2 February 2013 and expected to have a material impact on the Group's results.

4.         Segmental analysis

 

Income statement


Half year ended 28 July 2012

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Sales

2,264

2,206

513

495

5,478

Retail profit

145

191

54

13

403

Exceptional items





(6)

Central costs





(22)

Share of interest and tax of joint ventures and associates





(7)

Operating profit





368

Net finance costs





(4)

Profit before taxation





364

 


Half year ended 30 July 2011

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Sales

2,306

2,341

570

445

5,662

Retail profit

182

201

70

20

473

Central costs





(21)

Share of interest and tax of joint ventures and associates





(9)

Operating profit





443

Net finance costs





(5)

Profit before taxation





438

 


Year ended 28 January 2012

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Sales

4,338

4,470

1,094

929

10,831

Retail profit

271

423

135

53

882

Exceptional items





(12)

Central costs





(43)

Share of interest and tax of joint ventures and associates





(20)

Operating profit





807

Net finance costs





(10)

Profit before taxation





797



Balance sheet


At 28 July 2012

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Segment assets

1,350

1,237

480

564

3,631

Central liabilities





(401)

Goodwill





2,396

Net cash





29

Net assets





5,655

 

At 30 July 2011

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Segment assets

1,472

1,255

472

581

3,780





(434)





2,398

Net debt





(186)

Net assets





5,558

 

At 28 January 2012

£ millions

UK & Ireland

 

France

Other International

 

Total

Poland

Other

Segment assets

1,403

1,309

505

596

3,813





(395)





2,397

Net debt





(88)

Net assets





5,727

 

The 'Other International' segment consists of Poland, China, Spain, Russia, the joint venture Koçtaş in Turkey and the associate Hornbach which has operations in Germany and other European countries. Poland has been shown separately due to its significance.

 

Central costs principally comprise the costs of the Group's head office. Central liabilities comprise unallocated head office and other central items including pensions, interest and tax.

 

The Group's sales, although not highly seasonal in nature, do increase over the Easter period and during the summer months leading to slightly higher sales usually being recognised in the first half of the year.

5.         Exceptional items

 


Half year ended

Half year ended

Year ended

£ millions

28 July 2012

30 July 2011

28 January 2012

Included within selling and distribution expenses




UK restructuring

4

2

2

UK stores acquisition integration

-

(2)

(11)


4

-

(9)

Included within administrative expenses




UK restructuring

(22)

-

-

Net pension gain

11

-

-


(11)

-

-

Included within other income




Profit/(loss) on disposal of properties

1

-

(3)


1

-

(3)

Exceptional items before tax

(6)

-

(12)

Tax on exceptional items

1

-

7

Exceptional items

(5)

-

(5)

 

The UK restructuring net charge of £18m principally reflects the streamlining of B&Q UK & Ireland's store support office and kitchen, bathroom and bedroom business as well as IT services. It also includes a £4m release (2011/12: £2m) of an onerous property contract provision for idle stores either sublet or exited in the period, which had previously been included as part of the B&Q UK store closure and downsizing programme in 2005/06.

 

In the prior year the Group acquired 29 Focus stores in the UK and incurred £2m of costs in the first half, £11m for the full year, integrating these into the B&Q store network.

 

The net pension gain of £11m includes a £27m curtailment gain arising due to the closure of the UK final salary scheme to future benefit accrual. Offsetting the gain is a charge of £16m for transitional payments to scheme members.

 

The gain on disposal of properties is £1m (2011/12: £nil) and for the year ended 28 January 2012 was a loss of £3m.

 

6.         Net finance costs

 


Half year ended

Half year ended

Year ended  

£ millions

28 July 2012

30 July 2011

28 January 2012

Bank overdrafts and bank loans

(3)

(5)

(12)

Medium Term Notes and other fixed term debt

(4)

(5)

(10)

Finance leases

(2)

(2)

(5)

Financing fair value remeasurements

(1)

(1)

2

Unwinding of discount on provisions

-

-

(4)

Expected net interest charge on defined benefit pension schemes

(2)

-

-

Other interest payable

-

-

(3)

Capitalised interest

1

1

1

Finance costs

(11)

(12)

(31)





Cash and cash equivalents and current other investments

7

6

19

Expected net interest return on defined benefit pension schemes

-

1

2

Finance income

7

7

21





Net finance costs

(4)

(5)

(10)



7.         Income tax expense

 


Half year ended

Half year ended

Year ended  

£ millions

28 July 2012

30 July 2011

28 January 2012

UK corporation tax




Current tax on profits for the period

30

55

68

Adjustments in respect of prior years

3

2

(16)


33

57

52

Overseas tax




Current tax on profits for the period

65

65

142

Adjustments in respect of prior years

(1)

-

(31)


64

65

111

Deferred tax




Current period

8

4

12

Adjustments in respect of prior years

3

(3)

(12)

Adjustments in respect of changes in tax rates

(3)

(5)

(5)


8

(4)

(5)





Income tax expense

105

118

158

 

The effective rate of tax on profit before exceptional items and excluding prior year tax adjustments and the impact of changes in tax rates on deferred tax is 28% (2011/12: 28%), representing the best estimate of the effective rate for the full financial year. The effective tax rate for the year ended 28 January 2012 was 28%. Tax on exceptional items for the current period is a credit of £1m (2011/12: £nil). Tax on exceptional items for the year ended 28 January 2012 was a credit of £7m, £5m of which related to prior year items.

 

Kingfisher paid €138m tax to the French tax authorities in the year ended 31 January 2004 as a consequence of the Kesa Electricals demerger and recorded this as an exceptional tax charge.  Kingfisher appealed successfully against this tax liability and as a result received €169m from the French tax authorities in September 2009, representing a refund of the €138m and €31m of repayment supplement. The French tax authorities appealed this decision and the hearing took place in May 2011 with the Court of Appeal finding in Kingfisher's favour. The French tax authorities have appealed this decision to the final level of court although a date for this hearing has not yet been set.  Therefore no income has yet been recognised relating to this receipt.

 

8.         Earnings per share

 


Half year ended

Half year ended

Year ended  

Pence

28 July 2012

30 July 2011

28 January 2012

Basic earnings per share

11.1

13.7

27.5

Effect of dilutive share options

(0.2)

(0.2)

(0.6)

Diluted earnings per share

10.9

13.5

26.9





Basic earnings per share

11.1

13.7

27.5

Exceptional items

0.3

-

0.5

Tax on exceptional and prior year items

0.1

(0.3)

(2.8)

Financing fair value remeasurements

-

0.1

(0.1)

Adjusted basic earnings per share

11.5

13.5

25.1





Diluted earnings per share

10.9

13.5

26.9

Exceptional items

0.2

-

0.5

Tax on exceptional and prior year items

0.1

(0.3)

(2.7)

Financing fair value remeasurements

-

-

(0.1)

Adjusted diluted earnings per share

11.2

13.2

24.6

 

The calculation of basic and diluted earnings per share is based on the profit for the period attributable to equity shareholders of the Company. A reconciliation of statutory earnings to adjusted earnings is set out below:

 


Half year ended

Half year ended

Year ended  

£ millions

28 July 2012

30 July 2011

28 January 2012

Earnings

259

321

640

Exceptional items

6

-

12

Tax on exceptional and prior year items

1

(6)

(66)

Financing fair value remeasurements

1

1

(2)

Adjusted earnings

267

316

584

 

The weighted average number of shares in issue during the period, excluding those held in the Employee Share Ownership Plan Trust (ESOP), is 2,332m (2011/12: 2,339m). The diluted weighted average number of shares in issue during the period is 2,379m (2011/12: 2,385m). For the year ended 28 January 2012, the weighted average number of shares in issue was 2,331m and the diluted weighted average number of shares in issue was 2,375m.

 

9.         Dividends

 


Half year ended

Half year ended

Year ended  

£ millions

28 July 2012

30 July 2011

28 January 2012

Dividends to equity shareholders of the Company




Final dividend for the year ended 28 January 2012 of

6.37p per share

148

-

-

Interim dividend for the year ended 28 January 2012 of

2.47p per share

-

-

57

Final dividend for the year ended 29 January 2011 of

5.145p per share

-

121

121


148

121

178

 

The proposed interim dividend for the period ended 28 July 2012 is 3.09p per share.

 

10.        Capital expenditure

 

Additions to the cost of property, plant and equipment, investment property and intangible assets are £176m (2011/12: £238m) and for the year ended 28 January 2012 were £443m. Disposals in net book value of property, plant and equipment, investment property and intangible assets are £5m (2011/12: £1m) and for the year ended 28 January 2012 were £20m.

 

Capital commitments contracted but not provided for at the end of the period are £34m (2011/12: £84m) and at 28 January 2012 were £139m.

 

11.        Post employment benefits

 


Half year ended

Half year ended

Year ended  

£ millions

28 July 2012

30 July 2011

28 January 2012

Net deficit in schemes at beginning of period

(15)

(58)

(58)

Current service cost

(14)

(14)

(29)

Interest on defined benefit obligations

(44)

(46)

(93)

Expected return on pension scheme assets

42

47

95

Curtailment gain

27

-

-

Actuarial (losses)/gains

(66)

(19)

20

Contributions paid by employer

23

23

49

Exchange differences

3

(1)

1

Net deficit in schemes at end of period

(44)

(68)

(15)

 

The assumptions used in calculating the costs and obligations of the Group's defined benefit pension schemes are set by the Directors after consultation with independent professionally qualified actuaries. The assumptions are based on the conditions at the time and changes in these assumptions can lead to significant movements in the estimated obligations, as illustrated in the sensitivity analysis provided in note 27 of the annual financial statements for the year ended 28 January 2012.

 

A key assumption in valuing the pension obligation is the discount rate. Accounting standards require this to be set based on market yields on high quality bonds at the balance sheet date. The UK scheme discount rate is based on the yield on the iBoxx over 15 year AA-rated Sterling corporate bond index adjusted for the difference in term between iBoxx and scheme liabilities.

 

The discount rate and price inflation actuarial valuation assumptions for the UK scheme, being the Group's principal defined benefit scheme, are set out below:


At 

At 

At 

Annual % rate

28 July 2012

30 July 2011

28 January 2012

Discount rate

4.0

5.3

4.5

Price inflation

2.6

3.5

3.0

 

The UK final salary scheme was closed to future benefit accrual with effect from 30 June 2012, resulting in a curtailment gain of £27m. From this date all UK employees have had the opportunity to join an enhanced defined contribution scheme. The reduction in future contributions to the final salary scheme is expected to be offset significantly by the increased employee participation in, and employer contributions to, the enhanced defined contribution scheme.

12.        Other reserves

 

 

£ millions

Cash flow hedge reserve

 

Translation reserve

 

  Other

 

 

Total

At 29 January 2012

7

247

159

413

Currency translation differences

Group

-

(143)

-

(143)

Joint ventures and associates

-

(12)

-

(12)

Cash flow hedges

Fair value gains

10

-

-

10

Gains transferred to inventories

(8)

-

-

(8)

Tax on other comprehensive income

(1)

3

-

2

Other comprehensive income for the period

1

(152)

-

(151)

At 28 July 2012

8

95

159

262






At 30 January 2011

(5)

385

159

539

Currency translation differences

Group

-

16

-

16

Joint ventures and associates

-

3

-

3

Cash flow hedges

Fair value losses

(13)

-

-

(13)

Losses transferred to inventories

12

-

-

12

Tax on other comprehensive income

-

(1)

-

(1)

Other comprehensive income for the period

(1)

18

-

17

At 30 July 2011

(6)

403

159

556






At 30 January 2011

(5)

385

159

539

Currency translation differences

Group

-

(129)

-

(129)

     Joint ventures and associates

-

(10)

-

(10)

Cash flow hedges

Fair value gains

10

-

-

10

Losses transferred to inventories

8

-

-

8

Tax on other comprehensive income

(6)

1

-

(5)

Other comprehensive income for the year

12

(138)

-

(126)

At 28 January 2012

7

247

159

413

 

13.        Cash generated by operations

 


Half year ended

Half year ended

Year ended

£ millions

28 July 2012

30 July 2011

28 January 2012

Operating profit

368

443

807

Share of post-tax results of joint ventures and associates

(7)

(13)

(32)

Depreciation and amortisation

122

115

237

Impairment losses

-

-

7

(Profit)/loss on disposal of property, plant and equipment, investment property and intangible assets

(1)

1

7

Share-based compensation charge

11

17

32

Increase in inventories

(152)

(155)

(94)

Increase in trade and other receivables

(57)

(63)

(28)

Increase/(decrease) in trade and other payables

264

50

(65)

Movement in provisions

23

(11)

(24)

Movement in post employment benefits

(36)

(9)

(20)

Cash generated by operations

535

375

827



14.        Net cash/(debt)

 


At 

At 

At 

£ millions

28 July 2012

30 July 2011

28 January 2012

Cash and cash equivalents

613

594

587

Bank overdrafts

(32)

(160)

(102)

Cash and cash equivalents and bank overdrafts

581

434

485

Bank loans

(91)

(96)

(98)

Medium Term Notes and other fixed term debt

(464)

(493)

(478)

Financing derivatives

65

36

67

Finance leases

(62)

(67)

(64)

Net cash/(debt)

29

(186)

(88)

 


Half year ended 

Half year ended 

Year ended 

£ millions

28 July 2012

30 July 2011

28 January 2012

Net (debt)/cash at beginning of period

(88)

14

14

Net increase/(decrease) in cash and cash equivalents and

bank overdrafts

147

(224)

(118)

Repayment of bank loans

5

8

10

Repayment of Medium Term Notes and other fixed term debt

-

10

30

Payment on financing derivatives

-

3

5

Capital element of finance lease rental payments

6

6

16

Cash flow movement in net cash/(debt)

158

(197)

(57)

Exchange differences and other non-cash movements

(41)

(3)

(45)

Net cash/(debt) at end of period

29

(186)

(88)

 

15.        Contingent assets and liabilities

 

Kingfisher plc has an obligation to provide a bank guarantee for £50m (2011/12: £50m) to the liquidators of Kingfisher International France Limited in the event that Kingfisher plc's credit rating falls below 'BBB'. The obligation arises from an indemnity provided in June 2003 as a result of the demerger of Kesa Electricals. At 28 January 2012 the amount was £50m.

 

The Group has arranged for certain guarantees to be provided to third parties in the ordinary course of business. Of these guarantees, only £6m (2011/12: £9m) would crystallise due to possible future events not wholly within the Group's control. At 28 January 2012 the amount was £10m.

 

The Group is subject to claims and litigation arising in the ordinary course of business and provision is made where liabilities are considered likely to arise on the basis of current information and legal advice.

 

16.        Related party transactions

 

The Group's significant related parties are its joint ventures, associates and pension schemes as disclosed in note 36 of the annual financial statements for the year ended 28 January 2012. There have been no significant changes in related parties or related party transactions in the period.



STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

The Directors confirm that this set of interim condensed financial statements has been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

·      an indication of important events that have occurred during the period and their impact on the interim condensed financial statements, and a description of the principal risks and uncertainties for the remainder of the financial year; and

·      material related party transactions in the period and any material changes in the related party transactions described in the last annual report.

 

The Directors of Kingfisher plc were listed in the Kingfisher plc Annual Report for the year ended 28 January 2012. There have been no changes in the period.

 

By order of the Board

 

 

Ian Cheshire                                                                        Kevin O'Byrne

Group Chief Executive                                                        Group Finance Director

11 September 2012                                                            11 September 2012

 

INDEPENDENT REVIEW REPORT TO KINGFISHER PLC

 

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the half year ended 28 July 2012 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 16. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

 

Directors' responsibilities

 

The interim financial report is the responsibility of, and has been approved by, the Directors.  The Directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

As disclosed in note 2, the annual financial statements of Kingfisher plc are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the half year ended 28 July 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

 

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

11 September 2012


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR BIGDCBXBBGDB