Interim Results

KINGFISHER PLC 14 September 1999 KINGFISHER CONTINUES TO BUILD EUROPEAN STRENGTH Interim Results for 26 Weeks ended 31 July 1999 Results - Group Retail Sales up 61.0% to £4.8 bn (Euros 7.3 bn) - Profit before Exceptional Items up 39.1% to £254.0 m And Tax (Euros 384.5m) - Profit Before Tax up 10.3% to £249.7 m (Euros 378.0m) - Earnings Per Share up 3.2% to 9.8p Before Exceptional Items Net of Tax - Dividend Per Share up 6.7% to 4.0p Key Progress - BUILDING GLOBAL BUSINESSES WITH LEADERSHIP IN GROWING MARKETS - £ 1 IN DIY IN EUROPE - £ 3 IN ELECTRICAL IN EUROPE - GROUP AND SECTOR SYNERGIES COMING THROUGH - INVESTMENT IN SPACE EXPANSION AND SUPPLY CHAIN - INNOVATION IN NEW FORMATS AND NEW CHANNELS OF DISTRIBUTION Commenting on Kingfisher's progress, Group Chief xecutive, Sir Geoffrey Mulcahy said: 'The continuing strength of our performance is the foundation for our ongoing drive to build a broadly-based international retail Group. Our strategy is to develop market leading businesses in growth markets which focus on efficiently meeting the ever more demanding needs of our customers. In the past twelve months, in addition to substantial investment in our ongoing businesses, we have created the number one European DIY business with the merger of B&Q and Castorama, entered Germany, the largest European electricals market, and substantially increased our investment in developing our capability for e-commerce. The pace of change in retailing is accelerating. We intend to be a leader in that process and will seek to create and take advantage of opportunities to achieve that objective. Asda was such an opportunity. However, the price reached a level at which we did not think that it would add value for shareholders. The strength of the Kingfisher strategy is that we were not dependent on that or any other single opportunity. We will continually seek to offer our customers the best choice, best service and best value. Our investment in developing our businesses and strengthening our management makes us ideally placed to benefit from the opportunities that we will seek to create. We have both the experience and the financial strength to capitalise on further opportunities that may arise to accelerate our progress in line with our strategic objectives.' For further information Kingfisher plc +44 (0) 20 7724 7749 Media Enquiries Gwen Gober, Director of Corporate Affairs +44 (0) 20 7725 5714 +44 (0) 831 165419 Andrew Dowler, Financial Dynamics +44 (0) 20 7831 3113 Broker and Institutional Enquiries Andrew Mills, Director of Investor Relations +44 (0) 20 7725 5776 Web-site address www.kingfisher.co.uk Kingfisher plc Interim results for 26 weeks ended 31 July 1999 1999 1999 1998 Change Euro m £m £m - Retail Sales 7,333.8 4,844.3 3,008.4 61.0% - Profit before exceptional items and tax 384.5 254.0 182.6 39.1% - Exceptional items (6.5) (4.3) 43.7 N/A - Profit before tax 378.0 249.7 226.3 10.3% - Net operating cash flow 496.0 327.6 113.9 187.6% - Capital investment 698.4 461.3 206.1 123.8% - Net debt 1,427.3 942.8 414.7 127.3% £1=E1.5139 - Gearing 34.6% 21.8% N/A - Earnings per share before exceptional items net of tax 9.8p 9.5p 3.2% - Basic earnings per share 9.5p 11.8p (19.5)% - Dividend (per share) 4.0p 3.75p 6.7% GROUP CHIEF EXECUTIVE'S REVIEW RESULTS REFLECT STRATEGY ON COURSE Kingfisher, the European home and family retailer, today eports retail sales up by 61.0% to £4.8 billion (Euros 7.3 billion) and profit before tax and exceptional items up 39.1% to £254.0 million (Euros 384.5 million). During the first half of the year, Kingfisher's like-for-like sales grew solidly by 4.6% with market share gains in key categories continuing. Each of the three retail sectors reported like-for-like progress with the DIY sector leading the way. On a pro-forma basis, adjusting for the businesses added during the last year, like-for-like growth was 4.3%. After exceptional items of £4.3 million, principally costs relating to the attempted merger with ASDA, profit before tax rose 10.3% to £249.7 million. Earnings per share before exceptional items net of tax grew at the slower rate of 3.2% to 9.8p, because of the higher amount attributable to minority interests. Due mainly to the impact of last year's exceptional gain on the release of a VAT accrual, basic earnings per share fell 19.5% to 9.5p. The interim dividend is 4.0p, an increase of 6.7%. BUILDING PAN-EUROPEAN BUSINESSES As well as demonstrating further organic growth, the results reflect Kingfisher's successful strategy of building leading positions in the pan-European DIY and electrical sectors alongside a growing UK-based general merchandise sector. Kingfisher's objective is to use the benefits of scale to deliver improved value, choice and service to customers in existing markets and invest in further international growth. A number of businesses' results have been fully consolidated for the first time for the full six months within these figures. These include Castorama, the French market leader in DIY which was combined with its UK counterpart, B&Q, last December, the European electrical chains Wegert and BUT (which was previously an associate) and VCI, the entertainment publishing business. The net effect of this was to increase sales by £1.5 billion and operating profit by £75 million. However, there are costs associated with the implementation of Kingfisher's strategy which are being incurred in the short term in the form of higher interest expense and central costs, along with the operating loss resulting from the investment costs of positioning Kingfisher in the important German electricals market. SYNERGIES COMING THROUGH The results have benefited from the enhancement of buying synergies across the Group. In the DIY sector the £15 million target from joint sourcing in the full year has now been achieved and will be included in the full year results. INNOVATION IN NEW FORMATS The first half also saw the further implementation of a number of important strategic initiatives. B&Q opened the first western-style warehouse store in China during June. Big W, an out of town large-scale store combining products from across the UK Kingfisher businesses, was launched in the UK with the first store opening in Edinburgh. Also in Scotland, Comet opened the largest destination electricals store in a customer friendly interactive format. NEW CHANNELS OF DISTRIBUTION Further effort has been made in capitalising on the strength of the existing retail brands to reach customers through new channels of distribution. In April of this year Kingfisher formed a joint venture, called LibertySurf, with the Arnault Group. More recently there have been link-ups with two other internet service providers and further progress continues to be made in building commercial web sites in our core categories. Other complementary channels such as catalogue and interactive digital television also represent opportunities to offer customers different ways of accessing products and these are being exploited across the group. Screwfix, a fast growing UK direct mail business specialising in serving trade customers, was acquired in July to enable B&Q to accelerate its penetration of this important market category. Kingfisher will incur revenue costs relating to this investment activity of around £10m in the full year, nearly all of which will fall in the second half. INVESTMENT IN SPACE EXPANSION AND SUPPLY CHAIN Net store numbers increased by 31 and selling space increased to a total of 44.5 million sq. ft. (4.1 million sq m). In the UK we are in the enviable position of having an extensive property portfolio with strength both in the high street and out of town. This provides us with unique opportunities to manage the opening of new stores across a diverse Group portfolio. The opening of our first Big W is an example of space reutilisation. Capital expenditure on new stores, refurbishments and improving the operating infrastructure, notably systems and logistics, was £310 million. As a result of the investment in growth and increased efficiency, net debt rose to £942.8 million and gearing to 34.6%. At the period end, Kingfisher operated 2,773 stores in 14 countries and employed 117,459 people. Of this total, 647 stores and 42,182 employees, accounting for around 40% of total sales, are outside the UK, mainly in France and Germany. OPERATIONS REVIEW - DIY SECTOR B&Q/CASTORAMA MERGER DRIVES STRONG GROWTH - NUMBER 1 DIY OPERATOR IN EUROPE - SECTOR SYNERGIES BEGINNING TO SHOW THROUGH - B&Q WAREHOUSE DRIVE FOR GROWTH £m Sales % £m Retail Profit % Company 99/00 98/99 change 99/00 98/99 change B&Q* 1,186.1 995.9 19.1 99.7 86.1 15.8 Castorama** 1,124.2 - - 74.5 - - Total 2,310.3 995.9 132.0 174.2 86.1 102.3 *99/00 figures include NOMI, B&Q Taiwan and B&Q China. ** 99/00 figures for Castorama cover the same interim eriod as the rest of Kingfisher; as Castorama has now changed its financial year end to 31 January. The first half results include the first full ontribution of Castorama. B&Q merged with Castorama in December 1998, creating a business with a combined annualised turnover of around £4 billion and by far the number one DIY retailer in Europe. At the same time, Kingfisher took a 57.9% stake in the enlarged Castorama group fully consolidating its figures and reporting a minority interest for the share of the business not owned. The DIY sector enjoyed a strong first half. Sales or the sector were £2,310.3 million with profits of £174.2 million. On a proforma basis, the sector's profit would have increased by 20.2%. The first half DIY Sector results do not include any ynergy benefits arising from joint sourcing. A team made up from both businesses was set up at the beginning of the year to secure these benefits. Progress has been good, and the benefits achieved will be included in the year end results. B&Q B&Q sales rose by 19.1% to £1,186.1 million in the irst half with like-for-like growth of 7.5%. Profits grew by 15.8% to £99.7 million. B&Q continued to expand its market share in a DIY arket showing good growth, although competition was strong with price deflation widespread. The growth was driven by new Warehouse stores coming on stream, combined with strong like- for-like sales growth in both Supercentre and Warehouse formats. A key driver of the sales growth, especially during he first quarter, was the successful launch of the B&Q Value range - advertised as the lowest priced Home Improvement Range. Revamps in a number of older Warehouses also yielded significant incremental sales. During the period, B&Q opened four new Warehouse outlets in the UK, bringing the total to 39. Almost two thirds of these outlets are achieving annualised sales in excess of £20 million and Warehouse sales now account for nearly 35% of the B&Q total. Helped by the acquisition of Dickens, which brought four more Warehouse-size stores in the North East that will re-open as B&Q Warehouse during the second half, B&Q is now targeting to have around 50 Warehouses open at the end of the year representing significant progress towards its recently announced objective of 125. The acquisition of Screwfix provides B&Q with the opportunity to grow a complementary channel business focussing on trade customers but also providing a base for the development of a similar consumer offer. Direct mail sales are currently doubling every year and the small internet business is also growing rapidly confirming B&Q's view of its strong potential. B&Q's international activity has grown rapidly with sales of around £49 million during the first half. NOMI, the Polish DIY business, continued its development with the opening of two stores during the period bringing the total to 24. In the Far East two further stores are planned for Taiwan later in the year, and the new 73,500 sq ft Shanghai store marked B&Q's entry to the Chinese market. CASTORAMA Castorama, which retains its separate listing on the French Bourse, has reported separately under French Accounting Standards its results for the seven months ending 31 July 1999 including B&Q. Castorama has changed its year end to January from December coming into line with Kingfisher. Castorama's results as reviewed here do not include B&Q and cover the six months ending 31 July 1999 under UK GAAP which has the effect of increasing the level of profits reported under French GAAP by approximately £10 million, due mainly to differing treatment of depreciation on freehold property. Also, Castorama's profit as reported here is presented after deduction of certain costs, predominantly store pre-opening expenses and employee profit share, which in France are deducted after ''resultat d'exploitation'. These costs total approximately £5 million. The net effect is to increase the Castorama retail profit, as reported here, by approximately £5 million. Approximately four fifths of Castorama's sales of £1,124.2 million were generated in France. Although the business was not owned by Kingfisher last year, sales growth would have been 11.3%, including an £8.3 million currency benefit on translation into sterling, and like-for-like sales, at constant exchange rates, would have been ahead by 5.9%. This growth was driven by a very strong 30th Anniversary Promotion in May after a slow start to the year in the main chain when poor weather conditions affected sales of building and gardening products. It was also boosted by the strong growth in Brico Depot, the chain of 25 smaller, convenience- focussed stores. During the second half both the main chain and Brico Depot plan to open one store and refurbish a further two. Castorama's profits rose strongly on a proforma basis by 28% to £74.5 million, under UK GAAP and excluding B&Q. This was driven by the sales gains and also a significant reduction in pre-opening costs. Outside France, Castorama is represented in Canada, Brazil, Belgium, Germany, Italy and Poland. Strong growth has been achieved in Poland following last year's store openings and in Italy. One new store was opened in both of these markets during the first half with four due to open during the second half in Poland along with one in Germany. Taken as a whole, the profitability of Castorama's non-UK international businesses improved which provides encouragement after the investment that has taken place over recent years. OPERATIONS REVIEW - ELECTRICAL SECTOR EUROPEAN GROWTH CONTINUES - THIRD LARGEST EUROPEAN ELECTRICAL RETAILER - SECTOR STRUCTURE STRENGTHENED - SOLID FORMAT DEVELOPMENT AT DARTY AND COMET £m Sales % £m Retail Profit/ % Company 99/00 98/99 change (Loss) change 99/00 98/99 Darty 500.1 472.6 5.8 42.6 40.7 4.7 Comet 380.1 344.5 10.3 3.4 2.7 25.9 Wegert* 213.7 - - (5.3) - - BUT** 137.5 - - 14.9 2.2 - Other*** 80.3 56.9 41.1 (4.3) 1.0 - Total 1,311.7 874.0 50.1 51.3 46.6 10.1 *Wegert's results cover the six months to 30 June 1999. **BUT's 98/99 results are as a 26%-owned associate and cover the six months to 30 June 1998. The 99/00 results cover the six months to 30 June 1999 as a wholly-owned subsidiary. *** Includes central costs, BCC, New Vanden Borre and Electric City. Kingfisher's electrical sector is now the third largest electrical retailer in Europe. The first half results reflect the impact of the substantial growth by acquisition achieved last year in France, Germany and Singapore, resulting in sales growth of 50.1% to a total of £1,311.7 million. Like- for-like sales growth for the sector was 2.4% while, on a proforma basis, all store sales growth was 7.3%. Overall, sales in the sector continue to be affected by price deflation in brown goods compensated for by strong growth categories such as mobile phones, multimedia and, increasingly, digital products. Electrical sector profits totalled £51.3 million, an increase of 10.1% over the previous year. On a proforma basis, profits remain broadly level. Joint sourcing synergies have contributed £3 million to profit and this provides encouragement for future progress now that a strengthened sector organisation is in place, with Roger Holmes, Chief Executive Designate, working alongside Philippe Franc s, Chief Executive of Kingfisher Electrical S.A. The LibertySurf partnership with the Arnault Group is progressing well and we will continue to build on our capabilities with transactional web sites. FRANCE In France, Darty increased profits in sterling terms by 4.7% to £42.6 million. The increase was broadly similar in local currency terms, at 3.8% to FF 421.0 million. The French electricals market was mixed with sales of white goods growing and those of brown goods falling slightly. Against this background, Darty once again increased its share of its core markets and achieved strong growth in multimedia and mobile phones. After a positive start to the year, like-for-like sales growth was flat in the second quarter as the business came up against comparison with the strong sales triggered by the World Cup in 1998. Overall the like-for-like sales growth was 1.8% during the first half. Darty has continued to invest in the development of its store network with five new stores opened during the first half, bringing the total to 168, along with eight refurbishments. For the remainder of the year five new stores are planned along with four refurbishments and one relocation. The results for BUT, the furniture and electrical retailer, cover the six months to 30 June 1999. BUT is included as a subsidiary for its first full reporting period, it having been included as a 26% owned associate previously. Sales during its first half period were £137.5 million with profits of £14.9 million, ahead by 14.7% and 20.6% respectively. UK In the UK, Comet increased sales by 10.3% to £380.1 million with profits ahead at £3.4 million. Like-for-like sales were up 3.4% during the first half. Further market share gains were made with Comet now at 11.6% (11.3%). This progress was made despite significant price deflation, particularly in brown goods. Comet continued to invest in increased selling space opening four new stores and relocating two. The Paisley store, opened in July, is the largest destination electricals store in Scotland offering a significantly expanded range. This trial of a new format has enjoyed a successful start. A similar store in Reading opened in August, one other similar store will open during the second half and there will also be one other new opening and one relocation. Further investment has been made in customer service. Four new concept after-sales service centres, that offer same day call out, were opened during the period based on principles adapted from Darty's approach. GERMANY The results include Wegert (60% owned by Kingfisher) for the six months ending 30 June 1999 for the first time. At the end of the first half Wegert increased its presence in the German market with the completion of the purchase of Promarkt GmbH & Co, an electrical retailer operating under the ProMarkt and MakroMarkt names with seven stores. In addition, Kingfisher acquired Wegert Grosslabor GmbH, a German photographic processing company, and invested DM 9.1 million in a 55% initial interest in Tangens GmbH, which trades as a mobile phone service provider in Germany. Substantial costs have been incurred in integrating, developing and growing these businesses. OTHER At New Vanden Borre in Belgium, like-for-like sales increased by 11.8% against market growth of 6%. NVB increased the number of its new concept stores by three. Ten out of its 19 stores have now been renovated. BCC in Holland increased sales by 11.5% driven mainly by the opening of a further two new stores, bringing the total number of stores to 22. Electric City with seven stores in Singapore, which was acquired in October 1998, faced a depressed market. OPERATIONS REVIEW - GENERAL MERCHANDISE HIGH STREET SALES GROWTH CONTINUES - WOOLWORTHS STORES GROWTH, NEW CUSTOMER CHANNELS - SUPERDRUG STRENGTHENS HEALTH AND BEAUTY FOCUS - BIG W USING GROUP MUSCLE TO BUILD NEW CONCEPTS £m Sales % £m Retail Profit/ % Company 99/00 98/99 change (Loss) change 99/00 98/99 Woolworths 702.3 676.2 3.9 12.6 11.8 6.8 Superdrug 394.7 366.7 7.6 18.1 16.9 7.1 Other* 125.3 95.6 31.1 (4.3) 1.0 - Total 1,222.3 1,138.5 7.4 26.4 29.7 (11.1) * comprises EUK, MVC and VCI In the General Merchandise sector like-for-like sales growth was 3.6% with both Woolworths and Superdrug outperforming competitors on the basis of like-for-like sales growth. Despite the difficult trading conditions that continued from the latter part of 1998, they both increased their market shares in key categories. The £5.3 million reversal in 'Other' was principally due to the inclusion of VCI (traditionally a seasonal business) and a difficult entertainment market. WOOLWORTHS Woolworths grew sales by 3.9% to £702.3 million and increased its profits by 6.8% to £12.6 million, continuing its record of profits growth momentum. Like-for-like sales growth was 2.8%, reflecting increased market share in some of Woolworths' principal categories. After strong performance last year boosted by the success of the Titanic offerings in the latter part of the year, the weakness in the entertainment market caused by the lack of strong music and video releases has held back sales growth. Woolworths increased share in confectionery, boosted by its ongoing promotional approach, and toys. Woolworths has succeeded in quickly building a strong position in the rapidly growing mobile phones 'pay as you go' market. It also continued to develop key own label brands such as Chad Valley and Ladybird. During the year Woolworths continued its programme to add a total of one million square feet of new selling space and opened five new stores. It also extended three stores, relocated one and refurbished another 27 Local with 21 Heartland stores due to be refurbished in the second half of the year. Total new space added during the period was 168,000 sq ft. This new footage includes the first out of town Big W store. Big W is a general merchandise format, offering a comprehensive range at consistently low prices. For the remainder of this year eight new stores are planned, including the second Big W. A further six store extensions are planned along with one more relocation. Other development initiatives include the continuing expansion of Woolworths' home shopping offer using new channels. Woolworths Direct catalogue trials are continuing along with the Big Book which was introduced in 76 stores in July offering customers extended ranges and ease of shopping. Woolworths is the first major retailer to utilise Digital TV in the UK and, since the period end, has teamed up with AOL's UK internet service provider Netscape UK. SUPERDRUG At Superdrug profits for the first half year were £18.1 million compared with the previous year's £16.9 million. Total sales increased by 7.6% to £394.7 million, of which the like-for-like increase accounted for 5.3%. The recent investments in the store base and in pharmacies has contributed to this solid growth in a market where growth has continued to be slow. Customers' average spend continued to increase as a result of the shift to health and beauty products. Superdrug has continued to increase its market share in key medicinal and beauty categories. Continuing investment in store refurbishments and the addition of pharmacies reinforced the increased focus on the health and beauty offer. A further eleven in-store pharmacies were opened bringing the total to 188. Superdrug will continue its store refurbishment and pharmacy opening programme during the second half of the year. OTHER Entertainment UK, the Group's music and video wholesaler, achieved a 5.5% sales uplift, in an entertainment market showing little growth. The business has actively supported the launch of the new Digital Versatile Disc product and is now distributing it to around 400 Kingfisher stores. VCI, the music and video publisher acquired last year, increased its sales and market share but made a small loss in the seasonally affected first half of the year. MVC increased its store base from 61 stores to 66, with a further 15 planned for the second half of the year. OPERATIONS REVIEW - PROPERTY Chartwell Land, Kingfisher's specialist retail property company, increased operating profits by 22.8% to £37.7 million. A strong improvement in investment income more than outweighed a £1.8 million fall in development profit. The main acquisition in the first half was that of a portfolio of CRS Homeworld properties. KINGFISHER DATA BY SECTOR AND COMPANY DIY Company Store Selling space Employees nos. (FTE) (000s sq.ft.) (000s sq.m.) B &Q 299 15,558 1,445.4 16,320 Castorama 183 11,855 1,101.4 21,996 Other 24 570 52.9 1,030 TOTAL 506 27,983 2,599.7 39,346 ELECTRICAL Company Store Selling space Employees nos. (FTE) (000s sq.ft.) (000s sq.m.) Darty 168 2,081 193.3 9,031 Comet 263 2,033 188.9 6,008 Wegert 167 1,311 121.8 2,580 BUT* 61 1,763 163.8 2,086 Other 48 379 35.2 1,097 TOTAL 707 7,567 703.0 20,802 GENERAL MERCHANDISE Company Store Selling space Employees nos. (FTE) (000s sq.ft.) (000s sq.m.) Woolworths 791 6,457 599.9 14,704 Superdrug 703 2,173 201.9 6,048 Other 66 291 27.0 1,626 TOTAL 1,560 8,921 828.8 22,378 KINGFISHER 2,773 44,471 4,131.5 82,526 TOTAL *The figures for BUT include only those stores consolidated in the Group's figures. BUT also operates the following non-consolidated franchises. BUT non 174 4,531 420.9 4,020 consolidated franchises KINGFISHER PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED) For the half year ended 31 July 1999 Half Half Year year year ended £ millions notes ended 31 ended 1 30 July August January 1999 1998 1999 Turnover - continuing operations Retail 1 4,844.3 3,008.4 7,354.4 Property 35.1 19.6 41.1 Financial Services 31.1 32.5 62.3 4,910.5 3,060.5 7,457.8 Operating Profit - continuing operations DIY 174.2 86.1 191.1 Electrical 51.3 46.6 173.4 General Merchandise 26.4 29.7 186.1 Property 37.7 30.7 69.1 Exceptional item - other 2 (3.7) 44.7 44.7 operating (expense)/income Other operating costs (21.3) (11.6) (27.3) Operating profit 264.6 226.2 637.1 Exceptional items (Loss)/profit on disposal of (0.6) (1.0) 2.1 properties - continuing operations Profit on ordinary activities 264.0 225.2 639.2 before interest Interest (14.3) 1.1 (9.9) Profit on ordinary activities 249.7 226.3 629.3 before tax Taxation on ordinary (76.2) (67.0) (183.5) activities Profit on ordinary activities 173.5 159.3 445.8 after tax Minority interests (45.2) (0.3) (8.9) Profit attributable to the 128.3 159.0 436.9 members of Kingfisher plc Dividends on equity shares 3 (54.6) (50.8) (175.3) Retained profit for the 73.7 108.2 261.6 period Earnings per share (pence) 4 - basic 9.5 11.8 32.3 - diluted 8.9 11.6 31.7 - basic before exceptional 9.8 9.5 29.9 items - diluted before exceptional 9.2 9.3 29.3 items KINGFISHER PLC CONSOLIDATED BALANCE SHEET (UNAUDITED) As at 31 July 1999 £ millions notes 31 July 1 August 30 January 1999 1998 1999 Fixed assets Intangible assets 389.8 58.4 267.3 Tangible assets 3,143.1 1,933.7 2,885.4 Investments 63.5 71.9 66.4 3,596.4 2,064.0 3,219.1 Current assets Development work in progress 54.3 76.3 69.0 Stocks 1,614.6 970.9 1,465.4 Debtors 737.5 568.6 752.9 Securitised consumer 303.2 189.7 321.0 receivables Less: non-recourse secured (238.3) 64.9 (147.3) 42.4 (247.4) 73.6 notes Investments 347.6 278.8 311.7 Cash at bank and in hand 336.2 80.8 241.2 3,155.1 2,017.8 2,913.8 Creditors Amounts falling due within (3,082.2) (1,759.1) (2,726.0) one year Net current assets 72.9 258.7 187.8 Total assets less current 3,669.3 2,322.7 3,406.9 liabilities Creditors Amounts falling due after (921.1) (409.1) (768.8) more than one year Provisions for liabilities (20.7) (14.5) (21.8) and charges 2,727.5 1,899.1 2,616.3 Called up share capital 9 170.5 169.4 170.0 Reserves 2,147.4 1,729.4 2,080.6 Equity shareholders' funds 2,317.9 1,898.8 2,250.6 Equity minority interests 409.6 0.3 365.7 2,727.5 1,899.1 2,616.3 Approved by the Board Sir Geoffrey Mulcahy, Director Philip Rowley, Director 13 September 1999 KINGFISHER PLC SUMMARY CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) For the half year ended 31 July 1999 Half year Half year Year ended ended 1 ended 30 £ millions notes 31 July August January 1999 1998 1999 Net cash inflow from operating 5 327.6 113.9 698.3 activities Returns on investment and servicing of finance Net interest (paid)/received (6.8) 1.1 (13.3) Taxation Net tax paid (34.3) (17.8) (169.2) Capital expenditure and financial investment Net purchase of tangible fixed (309.5) (143.6) (378.6) assets Net purchase of fixed asset (0.9) (13.9) (14.4) investments Net cash outflow from capital expenditure and financial (310.4) (157.5) (393.0) investment Acquisitions and disposals Purchase of subsidiaries and (146.3) (48.6) (430.6) business undertakings Payments for additions to joint (4.6) - (3.8) ventures/associated undertakings Net cash outflow from acquisitions (150.9) (48.6) (434.4) and disposals Equity dividends paid (99.0) (106.0) (153.8) Management of liquid resources Net movement in short-term (56.0) 0.6 22.3 deposits Net purchase of short-term (37.0) (23.1) (43.1) investments Net cash outflow from management (93.0) (22.5) (20.8) of liquid resources Financing Issue of ordinary share capital 15.8 5.9 13.6 Capital element of finance lease (3.7) (1.5) (6.4) rental payments Net increase of loans 329.7 227.9 433.2 Net cash inflow from financing 341.8 232.3 440.4 Decrease in cash 6 (25.0) (5.1) (45.8) KINGFISHER PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Retail sales from continuing operations Half Half Year £ millions year year ended ended 31 ended 1 30 July August January 1999 1998 1999 Kingfisher 4,844.3 3,008.4 7,354.4 DIY 2,310.3 995.9 2,055.4 B&Q 1,186.1 995.9 1,908.4 Castorama 1,124.2 - 147.0 Electrical 1,311.7 874.0 2,458.1 Darty 500.1 472.6 1,123.8 Comet 380.1 344.5 862.4 Wegert 213.7 - 253.0 BUT 137.5 - 80.3 Other 80.3 56.9 138.6 General Merchandise 1,222.3 1,138.5 2,840.9 Woolworths 702.3 676.2 1,763.2 Superdrug 394.7 366.7 798.6 Other 125.3 95.6 279.1 2. The exceptional other operating expense represents the costs incurred during the period on the aborted merger with ASDA Group plc. For the half year ended 1 August 1998 the exceptional other operating income represents the release of an accrual for VAT on outstanding credit balances as at 28 February 1997 following the withdrawal of the Standard Method of Gross Takings by HM Customs & Excise. Following the Court of Appeal ruling on 17 February 1998 in a case involving Littlewoods Home Shopping Ltd, the accrual was no longer required. 3. An interim dividend of 4.00p amounting to £54.6 million (1998: 3.75p, £50.8 million) will be paid on 19 November 1999 to shareholders on the Register on 1 October 1999. A scrip dividend will be offered and forms of election will be sent to shareholders on 12 October 1999. 4. The calculation of basic earnings per share is based on the profit on ordinary activities, after taxation and minority interests, of £128.3 million (1998: £159.0 million) and the weighted average number of shares in issue during the period of 1,354.4 million (1998: 1,350.6 million). The diluted earnings per share is based on the diluted profit on ordinary activities, after taxation and minority interests, of £124.6 million (1998: £159.0 million) and the diluted weighted average number of shares in issue during the period of 1,393.8 million (1998: 1,373.1 million). 5. Reconciliation of cashflow from operating activities Half Half Year £ millions year year ended ended 31 ended 1 30 July August January 1999 1998 1999 Operating profit 264.6 226.2 637.1 Depreciation 87.3 63.8 141.0 351.9 290.0 778.1 Decrease/(increase) in 15.5 (25.0) (15.8) development work in progress Increase in stock (155.6) (61.6) (94.3) Decrease in debtors 5.2 35.5 66.1 Increase/(decrease) in creditors 109.6 (125.8) (46.0) Share of associates profits (2.1) (2.2) (4.6) Loss on disposal of fixed assets 3.1 3.0 14.8 Net cash inflow from operating 327.6 113.9 698.3 activities 6. Reconciliation of net borrowings Half Half Year year year ended £ millions ended 31 ended 1 30 July August January 1999 1998 1999 Net debt at start of period (693.4) (203.5) (203.5) Decrease in cash (25.0) (5.1) (45.8) Acquisitions - - (41.0) Net movement in short term 56.0 (0.6) (22.3) deposits Net purchase of short term 37.0 23.1 43.1 investments Change in market value of (0.4) 1.0 (0.5) investments Net increase of loans (329.7) (227.9) (433.2) Foreign exchange effects 12.7 (1.7) 9.8 Net debt at end of period (942.8) (414.7) (693.4) On 25 May 1999, the Group established a Euro 2.5 billion Euro- Medium Term Note Programme. 7. The interim financial statements have been prepared on the basis of the accounting policies set out in the Group's financial statements for the year ended 30 January 1999. The taxation charge is calculated by applying the best estimate of the annual tax rate to the profit for the period. 8. Acquisition of Screwfix Direct Limited On 26 July 1999, B&Q plc, a 57.6% subsidiary of the Group, acquired the entire share capital of Screwfix Direct Limited, a mail order and e-commerce retailer of building, plumbing and electrical products, for £84.5 million including expenses. Provisional goodwill, calculated on the closing acquisition balance sheet, of £81.9 million has been capitalised and is being amortised in accordance with Group policy. In its last financial year ended 31 January 1999 Screwfix Direct Limited and its subsidiaries made a profit of £2.2 million. Acquisition of Dickens Limited On 22 April 1999, B&Q plc, a 57.6% subsidiary of the Group, acquired the entire share capital of Dickens Limited, a DIY retailer in the North East of England, at a provisional cost of £40.3 million including expenses. Provisional goodwill arising on the acquisition of £18.3 million has been capitalised and is being amortised in accordance with Group policy. In its last financial year ended 31 January 1999 Dickens Limited made a loss after tax of £1.1 million. Acquisition of Wegert Grosslabor GmbH On 12 April 1999, the Group acquired the entire share capital of Wegert Grosslabor GmbH, a German photographic processing company, at a cost of £12.4 million including expenses. Provisional goodwill arising on the acquisition of £11.3 million has been capitalised and is being amortised in accordance with Group policy. In its last financial year ended 31 December 1998 Wegert Grosslabor GmbH under local accounting rules made a profit of £0.7 million. Other Acquisitions Effective 30 June 1999, Promarkt Holding KG, a 60% subsidiary of the Group, completed the acquisition of Promarkt GmbH and Co. KG Audio Video Elektro Foto, a German Electrical retailer for £6.6 million including expenses. The provisional goodwill arising on the acquisition of £3.0 million has been capitalised and is being amortised in accordance with Group policy. On 10 March 1999, the Group subscribed for a 55% interest in a new subsidiary, Tangens GmbH, a German mobile phone service provider, for £4.8 million, of which £3.1 million has been paid to date. Also, during the period the Group subscribed for a 40% interest in LibertySurf S.A., a pan- european internet service provider, for a consideration of £7.4 million, of which £4.6 million has been paid to date. This is included as an associate within investments. 9. On 2 July 1998, following approval on 27 May 1998, the authorised ordinary shares of 25p each in the capital of the company were divided into 2 ordinary shares of 12.5p each. 10. The results for the year to 30 January 1999 are based on full audited accounts which were filed with the Registrar of Companies and on which the auditors made a report under section 235 of the Companies Act 1985 which does not contain a statement under sections 237(2) or (3) of the Companies Act 1985 and is unqualified. 11. Copies of the results will be sent to shareholders during the week commencing 20 September 1999 and additional copies will be available from the Company Secretary, Kingfisher plc, North West House, 119 Marylebone Road, London, NW1 5PX. 12. The Group has continued to charge the costs of year 2000 compliance work to the profit and loss account as they are incurred. During the last 6 months the remaining work on the internal computer systems has continued together with work on supply chain and embedded systems. Testing procedures on all systems are scheduled to be completed early in the second half of the year. Work on other areas of the year 2000 programme, including monitoring other organisations we are dependent on for the formulation of contingency plans, is being completed to timetable and will continue through to the end of the year. Deadlines for completing all aspects of the work are linked to the business cycle which differs by company. Costs of £6.7 million were charged in the first half of the year, bringing the total to date to £21.2 million. This is forecast to increase to £30.6 million by the year end. These charges represent incremental, external costs only and do not include costs incurred in the course of normal systems enhancement programmes. Independent review report to Kingfisher plc We have been instructed by the company to review the financial information set out on pages 16 to 18 and the notes 1 to 11 thereto, and we have read the other information contained in the interim report for any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The Listing Rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with auditing standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 July 1999. PricewaterhouseCoopers Chartered Accountants London 13 September 1999

Companies

Kingfisher (KGF)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today