Interim Results
Kingfisher PLC
18 September 2002
EMBARGOED UNTIL 0700 HOURS
Wednesday 18 September 2002
Interim results for 26 weeks ended 3 August 2002
Kingfisher reports strong first half growth, with pre tax profits (1) ahead
26.5% to £274.7 million.
• Total retail sales growth of 10.1%, with like-for-like sales up 1.3%
• Retail profit ahead by 19.8% to £294.3m
• Profits before tax up 26.5% to £274.7m (1)
• Earnings per share ahead by 24.6% to 7.1p (2)
• Dividends at 3.45p per share are up 5.2% (2)
• Balance sheet strengthened by strong operating cash flow
Note (1) Before exceptional items and acquisition goodwill amortisation.
(2) Adjusted to reflect the bonus element of the recent rights issue and
the share consolidation effected in August 2001.
Kingfisher today announced first half year results, with retail sales ahead by
just over 10% to £5.1 billion and retail profit up almost 20% to £294.3 million.
The period saw weak consumer confidence in France and Germany, along with
relatively better conditions in the UK.
The Home Improvement sector performed strongly. Total sales grew 14.6%, up 2.8%
on a like-for-like basis, with growth in the core categories offset by slower
growth in seasonal areas in B&Q. Retail profit grew by 24.9% to £256.1 million,
out-pacing sales growth, in large part due to the margin benefits arising from
the ongoing cost price reduction programme in the UK.
The Electrical and Furniture sector grew total sales by 1.7%, but like-for-like
sales were down 1.5%. Sales performance in the second quarter was stronger than
the first, with consumer demand for vision products boosted by the World Cup.
Retail profit declined by 6.1% to £38.2 million. Market share gains were
achieved in the UK and France, but the slower rate of sales growth, combined
with a mix shift into faster growing but lower margin products, led to the
profit decline.
Overall the Group's profit before tax and exceptional items grew by 26.5% and,
after accounting for minority interests and an increased taxation rate, adjusted
earnings per share grew 24.6% to 7.1p.
An interim dividend of 3.45p will be payable, up 5.2% on last year's 3.28p.
Sir Geoffrey Mulcahy, Kingfisher's Chief Executive, said:
'Overall, these are a strong set of results achieved in a tough consumer
environment. We are on track to deliver our strategic transformation into
Europe's leading pure play Home Improvement retailer with a unified management
team responsible for developing the business. In Electricals, our strong
positions in France and the UK have enabled us to trade successfully in
challenging market conditions, whilst in Germany we clearly have more work to
do.
'In the short term we expect the slowdown in the rate of economic growth to
result in a continuing difficult market environment. In Home Improvement, where
we have market-leading positions in the UK and France through B&Q and Castorama,
the strategic alliance with Hornbach in Germany and operations in eight other
countries, we will be well-placed to compete in this exciting growth market.
Meanwhile, we are committed to the separation of the Electricals business within
the timetable previously announced.'
-ends-
Note to Editors
This news release contains forward-looking statements based on current
assumptions and forecasts made by Kingfisher's management. Various known and
unknown risks, uncertainties and other factors could lead to substantial
differences between the actual future results, financial situation, development
or performance of the Group and the estimates given here. The Group accepts no
obligation to continue to report or update these forward-looking statements or
adjust them to future events or developments.
Company profile
Kingfisher is Europe's leading home improvement retailer and is ranked number
three in the world. The Company operates more than 590 home improvement stores
in 11 countries and enjoys market-leading positions in the UK, France, Poland
and Taiwan. Sales for the Home Improvement sector for the year to 2 February
2002 were more than £5.8 billion, with retail profit in excess of £430 million.
Kingfisher's Electrical & Furniture business operates more than 830 stores in
nine countries. It is Europe's third largest electricals retailing business by
sales and number two by retail profit. As well as holding the leading position
in France and the number two position in the UK, Kingfisher also enjoys leading
positions in Belgium and in the Czech and Slovak Republics. Sales for the year
to 2 February 2002 were more than £3.7 billion, with retail profit of £184
million.
Broker and Institutional Enquiries
Ian Harding, Director of Investor Relations +44 (0) 20 7725 4889
Media Enquiries
Andrew Mills, Director of Corporate Affairs +44 (0) 20 7725 5776
Media Enquiries, France
Graham Fairbank, Head of Corporate Communications +33 (0) 1 43 18 52 26
Kingfisher plc +44 (0) 20 7724 7749
Kingfisher website www.kingfisher.com
SUMMARY RESULTS
SECTOR Retail sales (£m)
% total % like-for-like
2002 2001 change change
HOME IMPROVEMENT 3,421.9 2,985.0 14.6 2.8
ELECTRICAL AND
FURNITURE (2) 1,650.1 1,622.9 1.7 (1.5)
TOTAL 5,072.0 4,607.9 10.1 1.3
SECTOR Retail profit (£m) (1)
%
2002 2001 change
HOME IMPROVEMENT 256.1 205.0 24.9
ELECTRICAL AND
FURNITURE (2) 38.2 40.7 (6.1)
TOTAL 294.3 245.7 19.8
(1) Retail sectors only, excluding property, financial services, acquisition
goodwill amortisation and other operating costs.
(2) Electrical & Furniture includes ProMarkt for the six months to end July
2002 and the seven months to end July 2001 respectively. The prior year
results for ProMarkt include sales of £52.0m and a retail loss of
£5.0m relating to the additional month of January 2001.
SUMMARY OTHER DATA
Selling space Employees
SECTOR Store nos. (000s sq. m.) (FTE)
2002 2001 2002 2001 2002 2001
HOME IMPROVEMENT 595 557 3,980.7 3,504.4 56,883 48,603
ELECTRICAL AND FURNITURE 838 806 1,055.8 965.4 26,711 25,012
TOTAL 1,433 1,363 5,036.5 4,469.8 83,594 73,615
HOME IMPROVEMENT
Retail sales (£m) % % like-for-like
2002 2001 total change change
UK 1,940.3 1,672.0 16.0 3.0
France 1,017.9 930.6 9.4 1.4
International 463.7 382.4 21.3 5.5
Total 3,421.9 2,985.0 14.6 2.8
Retail profit (£m) %
2002 2001 change
UK 173.1 140.9 22.9
France 63.6 61.3 3.8
International 19.4 2.8 n/a
Total 256.1 205.0 24.9
UK
The Repair, Maintenance and Improvement (RMI) market showed growth of 4.0% for
the first half of the year and B&Q continued to outperform the competition and
grow overall market share through its focus on new range introduction and lower
prices. New rangeing activity included the new 'IT' takeaway kitchens, free
standing kitchen appliances and contemporary bathroom suites. Prices continued
to be rolled back, reinforcing B&Q's commitment to bring down the cost of DIY
for its customers.
Margin benefits have arisen from both a positive mix shift into higher margin
internal decorative ranges and also the ongoing Cost Price Reduction (CPR)
programme.
Eight new Warehouses (including one relocation) opened in the period including
the new double-decker Warehouse at Sutton, a key initiative for the penetration
of under-represented metropolitan locations. One of the Warehouse openings was
in Dublin, B&Q's first store in the fast growing Eire market. Also, two new
Destination Supercentres opened during the period.
Screwfix, the specialist catalogue and Internet business, grew sales and profit
strongly, with customers responding well to increased on-line marketing
activity.
France
In France the market grew by 2.5% with the combined chains of Castorama and
Brico Depot growing overall market share.
Castorama main chain stores in France reported total sales growth of 1.7% and
like-for-like sales growth of 0.9% for the first six months. Strongest growth
was delivered in the Garden category which achieved like-for-like growth of
5.0%, benefiting from new ranges and competitive pricing.
Gross margins improved, but costs grew faster, with significant investment in
advertising and increased pre-opening costs. The first half saw two new stores
and four relocations, which built on the experience from previous Warehouse
style operating formats.
Brico Depot had a strong first half, outpacing market growth. Total sales grew
35.8% with like-for-like sales up 5.3%. Following a relatively flat first
quarter, sales growth accelerated in the second quarter as Brico Depot
reaffirmed its value proposition. Sales were adversely impacted following the
introduction of the Euro, but highlighting French Franc equivalent prices
restored customer confidence in the pricing structure. As a result of stronger
gross margins and cost economies of scale, Brico Depot's operating margins
increased significantly in the first half.
International
Sales grew by 21.3% in the International businesses with growth in all countries
except Brazil and Belgium which experienced small declines. Like-for-like sales
grew by 5.5% with Castorama Poland showing double digit growth. Profit growth
was stimulated by an improved performance from Reno-Depot and strong organic
growth at Castorama Poland.
In Canada, Reno-Depot achieved like-for-like growth of 4.1% despite increasing
competition. Profit has improved dramatically compared to the prior year,
benefiting from higher buying margins and lower cost ratios. Store opening and
marketing costs fell following the one-off expenditure relating to the launch of
the Building Box last year.
Despite difficult economic conditions, Castorama Poland grew sales by 39.0% and
profits by more than 50% on the prior year. There were three new store openings
in the first half, bringing the total to 15.
ELECTRICAL AND FURNITURE
Sales (£m) % % like-for- like
2002 2001 total change change
France 767.8 731.8 4.9 (1.3)
UK 551.0 518.5 6.3 2.4
Germany (1) 226.9 285.0 (20.4) (10.5)
Other 104.4 87.6 19.2 1.0
Total 1,650.1 1,622.9 1.7 (1.5)
Retail Profit (£m) %
2002 2001 change
France 60.4 65.2 (7.4)
UK 4.8 3.4 41.2
Germany (1) (21.6) (23.4) 7.7
Other (5.4) (4.5) (20.0)
Total 38.2 40.7 (6.1)
(1) Includes six months to end July 2002; comparative results are for the
seven months to end July 2001. The prior year results include sales of
£52.0m and a retail loss of £5.0m relating to the additional month of
January 2001.
France
The French electricals market suffered from weak consumer confidence and
uncertainty over political elections in the first half. Between February and end
July the market shrank by 1.0%, according to GFK.
Against this tough background Darty was able to increase its market share,
growing total sales by 0.6% in local currency. On a like-for-like basis sales
fell by 1.5% across the period, although the second quarter performance was
stronger than the first. Overall Darty's sales were £567.2 million and retail
profit was £36.6 million.
Selling space grew by 3.9% during the first half of the year with four store
openings, two relocations and the extension of a further six stores.
Darty's sales were driven by digital technology. The business significantly
increased its market share in this product segment, with strong growth in LCD
and plasma screen TV's as well as in digital cameras. Multimedia exhibited
strong volume growth, particularly in laptop computers and high specification
printers. White product sales remain in-line with the flat market trend over
the period.
As a result of the sales mix changing towards faster growth but lower margin
products, the gross margin rate declined slightly during the first half of the
year.
BUT exhibited a similar impact from depressed consumer confidence and the weak
state of the French market and, while total sales grew by 13.9% in local
currency, like-for-like sales declined by 0.6%. BUT's total sales were £200.6
million with retail profit ahead slightly at £23.8 million.
Product margins continued to improve reflecting the increasing shift to directly
sourced products, although overall this was offset by the growing proportion of
wholesale sales. During the period a further 11 franchisee acquisitions were
completed.
UK
Comet's core market grew by 3.8% between February and end July 2002. Comet
increased its market share slightly (GFK white and brown products only) to 13.2%
during the period.
Comet's Every Day Low Prices (EDLP) policy continued to drive sales growth.
Initiatives to improve the shopping experience including improved in-store
product information, better in-store service and wider ranges continued to be a
success. As a result, the average prices of products sold again increased
compared to last year as customers bought more higher specification products,
benefiting margins. Sales were fuelled by strong demand for large screen
televisions, laptop computers and games, with mobile phone sales improving in
the second quarter after the anniversary of the networks' increase in handset
prices.
Following the opening of a further six interactive destination stores in the
first half there are now a total of 37. Another five stores are planned in the
second half of the year. Destination stores contributed over 26% of sales
during the first half.
Following positive trial results 20 existing core stores received new improved
in-store layouts and a further 24 stores are due to be relaid in the next
quarter.
Germany
The German electricals market declined further in the first half of the year.
The recovery programme put in place last year has continued to deliver higher
average selling prices, improved margins and lower costs. However, these
improvements have been insufficient to offset the impact of the lower sales
arising from the weak market conditions and intense competitor activity.
Consequently, despite the early promising results delivered by the recovery
programme, the business is now not delivering the required performance
improvements. In the light of this it is clear that more work remains to be
done.
International
This includes Vanden Borre in Belgium, BCC in the Netherlands and Datart in the
Czech and Slovak republics. Each market has been tough, demonstrating similar
sales trends in the various product categories to those seen in the UK, France
and Germany. Total sales growth was mostly driven by new store openings and
store refurbishment across all four markets.
E-COMMERCE
All of the Group's principal brands have now been transactional on-line for over
a year. Total on-line sales increased by over 150% compared to last year and,
in the NetRatings on-line 'Home and Garden' category, the B&Q and Castorama
websites consistently attract the highest number of visitors in their respective
markets.
Comet's multi-channel retailing approach is proving a success and the website is
on target to break even this year. The website is the fourth most visited on-
line retailer in the UK.
Average transaction values and sales conversion rates are increasing across the
Group's websites as the experience of the earlier established sites is shared
throughout the businesses.
PROPERTY
In the first half Chartwell Land, the Group's property development and
investment business, increased income by 15% to £28.6 million. In addition to
this, the Group as a whole disposed of fixed assets (mainly operating freehold
and investment properties) generating proceeds of £148 million (2001: £15
million) and a net exceptional profit of £4.1 million (2001: £(0.3) million
loss) during the period.
CENTRAL COSTS
These include the cost of centralised functions including business development,
taxation, treasury and financial control. Also included are the statutory costs
associated with a public listing, including company secretariat, corporate
communications and investor relations. In the first half of the year, central
costs fell by 9% to £19.8 million.
KINGFISHER DATA BY SECTOR AND MARKET
HOME IMPROVEMENT SECTOR
Store nos. Selling space Employees
(000s sq.m.) (FTE)
UK 318 1,920.5 24,871
France 155 1,196.8 17,983
International 122 863.4 14,029
TOTAL 595 3,980.7 56,883
ELECTRICAL AND FURNITURE SECTOR
Store nos. Selling space Employees (FTE)
(000s sq.m.)
France (1) 290 492.0 13,815
UK 257 235.3 7,560
Germany 189 229.2 3,182
Other 102 99.3 2,154
TOTAL 838 1,055.8 26,711
TOTAL 1,433 5,036.5 83,594
(1) The figures for Electrical and Furniture France include only those stores
consolidated in the Group's figures. Electrical and Furniture France also
operates 130 non-consolidated franchise stores with 334,000
sq metres of selling space and 3,000 FTE employees.
KINGFISHER PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
For the half year ended 3 August 2002
Half year* ended Half year Half year Half year
3 August 2002 ended 4 August ended 4 August
2001 2001 ended 4
Continuing Discontinued August 2001
operations operations Total
£ millions Note
Turnover including share of joint 5,191.7 4,694.0 1,397.7 6,091.7
ventures
Less: share of joint ventures' (70.0) (48.2) (3.3) (51.5)
turnover
Group turnover 1 5,121.7 4,645.8 1,394.4 6,040.2
Group operating profit/(loss) 276.8 126.9 (26.2) 100.7
Share of operating profit in:
Joint ventures 1.8 3.5 - 3.5
Associates 5.2 1.8 - 1.8
Total operating profit/(loss)
including share of joint ventures and
associates 283.8 132.2 (26.2) 106.0
Analysed as:
Home Improvement 256.1 205.0 - 205.0
Electrical and Furniture 38.2 40.7 - 40.7
General Merchandise - - (23.1) (23.1)
Property 28.6 24.8 21.4 46.2
E-commerce and other new channels (6.8) (11.0) (11.1) (22.1)
Other operating costs (19.8) (21.7) - (21.7)
Exceptional items - operating 2 (3.3) (97.9) (9.6) (107.5)
Acquisition goodwill amortisation (9.2) (7.7) (3.8) (11.5)
Total operating profit/(loss)
including share of joint ventures and
associates 283.8 132.2 (26.2) 106.0
Exceptional items - non-operating: 3
Profit/(loss) on the disposal of fixed 4.1 (31.3) (17.5) (48.8)
assets
Demerger costs - - (27.2) (27.2)
Loss on the sale of operations - - (342.5) (342.5)
Profit/(loss) on ordinary activities
before interest 287.9 100.9 (413.4) (312.5)
Net interest payable (21.6) (20.6) (22.2) (42.8)
Profit/(loss) on ordinary activities 266.3 80.3 (435.6) (355.3)
before tax
Taxation on ordinary activities (85.0) (64.9) 21.2 (43.7)
Profit/(loss) on ordinary activities 181.3 15.4 (414.4) (399.0)
after tax
Equity minority interests (67.9) (54.8) - (54.8)
Profit/(loss) attributable to the
members of Kingfisher plc 113.4 (39.4) (414.4) (453.8)
Earnings/(loss) per share (pence) 5
Basic 6.8 (2.4) (27.3)
Diluted 6.6 (2.5) (27.3)
Adjusted basic 7.1 5.7 4.4
Adjusted diluted 6.9 5.5 4.2
Memorandum:
Profit/(loss) before tax, exceptional
items and acquisition goodwill
amortisation 274.7 217.2 (35.0) 182.2
*The profit and loss account for the half year ended 3 August 2002 relates
entirely to continuing operations
KINGFISHER PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 2 February 2002
Continuing Discontinued Total
£ millions Notes operations operations
Turnover including share of joint ventures 9,819.4 1,532.3 11,351.7
Less: share of joint ventures' turnover (109.9) (3.7) (113.6)
Group Turnover 1 9,709.5 1,528.6 11,238.1
Group operating profit/(loss) 474.8 (26.0) 448.8
Share of operating profit in:
Joint ventures 9.4 - 9.4
Associates 4.3 - 4.3
Total operating profit/(loss) including share of
joint ventures and associates 488.5 (26.0) 462.5
Analysed as:
Home Improvement 430.7 - 430.7
Electrical and Furniture 183.7 - 183.7
General Merchandise - (29.6) (29.6)
Property 45.3 29.0 74.3
E-commerce and other new channels (18.8) (12.0) (30.8)
Other operating costs (39.6) - (39.6)
Exceptional items - operating 2 (97.9) (9.6) (107.5)
Acquisition goodwill amortisation (14.9) (3.8) (18.7)
Total operating profit/(loss) including share of
joint ventures and associates 488.5 (26.0) 462.5
Exceptional items - non-operating: 3
Loss on the disposal of fixed assets (34.7) (19.4) (54.1)
Demerger costs - (27.2) (27.2)
Profit/(loss) on the sale of operations 57.7 (342.5) (284.8)
Profit/(loss) on ordinary activities before
interest 511.5 (415.1) 96.4
Net interest payable (41.2) (27.2) (68.4)
Profit/(loss) on ordinary activities before tax 470.3 (442.3) 28.0
Taxation on ordinary activities (168.1) 12.1 (156.0)
Profit/(loss) on ordinary activities after tax 302.2 (430.2) (128.0)
Equity minority interests (120.8) - (120.8)
Profit/(loss) attributable to the members of
Kingfisher plc 181.4 (430.2) (248.8)
Earnings/(loss) per share (pence) 5
Basic 10.9 (14.9)
Diluted 10.6 (15.0)
Adjusted basic 16.0 14.4
Adjusted diluted 15.6 14.0
Memorandum:
Profit/(loss) before tax, exceptional items and
acquisition goodwill amortisation 560.1 (39.8) 520.3
KINGFISHER PLC
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 3 August 2002
£ millions 3 August 2002 4 August 2001 2 February 2002
Fixed assets
Intangible assets 299.7 389.9 295.4
Tangible assets 3,505.5 4,177.9 3,503.9
Investments in joint ventures
- share of gross assets 169.7 167.6 66.9
- share of gross liabilities (139.8) (141.4) (40.8)
29.9 26.2 26.1
Investments in associates 91.4 14.1 87.6
Other investments 149.3 109.9 122.4
4,075.8 4,718.0 4,035.4
Current assets
Development work in progress 50.6 104.1 61.5
Stocks 1,683.6 1,951.8 1,575.3
Debtors 692.4 796.9 962.0
Securitised consumer receivables - 275.8 -
Less: non-recourse secured notes - (225.1) 50.7 -
- -
Investments 74.7 191.7 174.7
Cash at bank and in hand 2,127.8 123.9 387.4
4,629.1 3,219.1 3,160.9
Creditors
Amounts falling due within one year (2,929.0) (3,725.1) (3,233.2)
Net current assets/(liabilities) 1,700.1 (506.0) (72.3)
Total assets less current liabilities 5,775.9 4,212.0 3,963.1
Creditors
Amounts falling due after more than one year (621.5) (800.0) (780.2)
Provisions for liabilities and charges (49.1) (61.0) (44.9)
5,105.3 3,351.0 3,138.0
Called up share capital 348.6 175.8 177.7
Reserves 4,027.2 2,552.5 2,295.0
Equity shareholders' funds 4,375.8 2,728.3 2,472.7
Equity minority interests 729.5 622.7 665.3
5,105.3 3,351.0 3,138.0
Approved by the Board
Sir Geoffrey Mulcahy Director
Helen Weir Director
17 September 2002
KINGFISHER PLC
CONSOLIDATED CASH FLOW (UNAUDITED)
For the half year ended 3 August 2002
Half year ended Half year ended Year ended
£ millions Notes 3 August 2002 4 August 2001 2 February 2002
Net cash inflow from operating activities 6 444.8 389.2 825.3
Dividends received from joint ventures 3.6 2.0 2.0
Returns on investment and servicing of finance
Net interest paid (30.8) (54.1) (84.3)
Dividends paid by subsidiaries to minorities (33.0) (30.2) (31.2)
Net cash outflow from returns on investment and servicing
of finance (63.8) (84.3) (115.5)
Taxation
Tax paid (73.0) (78.4) (165.9)
Capital expenditure and financial investment
Net purchase of fixed assets (81.3) (343.2) (100.4)
Net (purchase)/sale of investments (16.1) 113.3 (29.0)
Net cash outflow from capital expenditure and financial
investment (97.4) (229.9) (129.4)
Acquisitions and disposals
Purchase of subsidiary and business undertakings 9 (23.7) (10.2) (18.0)
Sale of subsidiary and business undertakings - 252.0 428.1
Net sale of joint ventures/associated undertakings - 2.4 23.8
Cash acquired on joint venture becoming a subsidiary - - 12.9
Non-operating demerger costs - - (27.2)
Issue of shares by Group companies to minority shareholders 6.7 3.7 10.3
Net cash (outflow)/inflow from acquisitions and disposals (17.0) 247.9 429.9
Equity dividends paid to shareholders (97.0) (125.2) (148.4)
Net cash inflow before use of liquid resources and
financing 100.2 121.3 698.0
Management of liquid resources
Net movement in short-term deposits 246.6 - (276.3)
Net movement in short-term investments 100.6 (23.1) (1.6)
Net cash inflow/(outflow) from management of liquid
resources 347.2 (23.1) (277.9)
Financing
Issue of ordinary share capital 1,912.5 6.9 18.0
Capital element of finance lease rental payments (6.3) (4.4) (6.2)
Net movement in loans (297.4) (114.4) (372.7)
Net cash inflow/(outflow) from financing 1,608.8 (111.9) (360.9)
Increase/(decrease) in cash 7 2,056.2 (13.7) 59.2
KINGFISHER PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Turnover
Half year ended Half year ended Year ended
£ millions 3 August 2002 4 August 2001 2 February 2002
Home Improvement 3,421.9 2,985.0 5,833.9
UK 1,940.3 1,672.0 3,214.6
France 1,017.9 930.6 1,833.5
International 463.7 382.4 785.8
Electrical and Furniture 1,650.1 1,622.9 3,784.8
France 767.8 731.8 1,700.0
UK 551.0 518.5 1,253.2
Germany 226.9 285.0 624.7
Other 104.4 87.6 206.9
Retail sales from continuing operations 5,072.0 4,607.9 9,618.7
Property 35.7 11.6 35.7
Financial Services 14.0 26.3 55.1
Total continuing operations 5,121.7 4,645.8 9,709.5
Discontinued operations - 1,394.4 1,528.6
Total 5,121.7 6,040.2 11,238.1
2. Exceptional items: operating
The operating exceptional item of £3.3m in the half year ended 3 August
2002 represents costs incurred by Castorama Dubois Investissements SCA in
relation to the buy out of the minority interest by Kingfisher (see
note 10).
The operating exceptional item of £107.5m in the half year ended 4 August
2001 and the year ended 2 February 2002 represents £93.7m in relation to
the impairment charge against the remaining goodwill in respect of the
ProMarkt business, and £13.8m of incremental internal costs directly
attributable to the demerger of the Woolworths Group.
3. Exceptional items: non-operating
(a) The profit /(loss) on disposal of fixed assets can be analysed as follows:
Half year ended Half year ended Year ended
£ millions 3 August 2002 4 August 2001 2 February 2002
Continuing operations
Profit/(loss) on disposal of properties 4.1 (0.3) (3.7)
Provisions for losses on disposal of
investments - (31.0) (31.0)
4.1 (31.3) (34.7)
Discontinued operations
Loss on disposal of properties - - (1.9)
Provisions for losses on disposal of
investments - (17.5) (17.5)
- (17.5) (19.4)
Total 4.1 (48.8) (54.1)
(b) Demerger costs of £27.2m in the prior year related to external costs,
principally professional advisors' and commitment fees, directly
attributable to the demerger of the Woolworths Group.
(c) The (loss)/profit on the sale of operations in the prior year represents
the loss of £(342.5)m on the sale of the Superdrug business and the profit
of £57.7m on the sale of the Time Retail Finance business.
4. Dividends
An interim dividend of 3.45p amounting to £89.3m (2001: 3.281p amounting
to £53.4m), after adjusting for the effect of the bonus element of the
rights issue (4.345p before adjustment), will be paid on 22 November 2002
to shareholders on the Register at 4 October 2002. A scrip dividend will
be offered and forms of election will be sent to shareholders on 15
October 2002.
5. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period, excluding those held in the
ESOP which are treated as cancelled.
For the half year ended 4 August 2001 the weighted average number of
shares has been adjusted for the share consolidation which took place on
28 August 2001 when the ordinary shares of 12.5p were consolidated on a 10
for 11 basis into ordinary shares of 13.75p.
The weighted average number of shares has also been adjusted for the bonus
element of the rights issue, which took place in July 2002. Prior year
earnings per share figures have been restated accordingly.
(a) Continuing operations
Earnings per share for continuing operations is presented in order to
provide a more meaningful comparison.
The calculation of basic earnings per share for continuing operations is
based on the profit on ordinary activities, after taxation and minority
interests, of £113.4m (2001: loss of £(39.4)m) and the weighted
average number of shares in issue during the period of 1,678.7m (2001:
1,659.8m). The diluted earnings per share for continuing operations is
based on the diluted profit on ordinary activities, after taxation and
minority interests, of £111.6m (2001: loss of £(41.9)m) and the diluted
weighted average number of shares in issue during the period of 1,686.3m
(2001: 1,668.9m).
The difference between the basic and diluted earnings per share and the
basic adjusted and diluted adjusted earnings per share is reconciled as
follows:
As restated As restated
Half year ended Half year ended Year ended
Pence per share 3 August 2002 4 August 2001 2 February 2002
Basic earnings/(loss) per share 6.8 (2.4) 10.9
Earnings per share relating to exceptional
items (0.2) 7.6 4.3
Earnings per share relating to acquisition
goodwill amortisation 0.5 0.5 0.8
Basic adjusted earnings per share 7.1 5.7 16.0
Diluted earnings/(loss) per share 6.6 (2.5) 10.6
Earnings per share relating to exceptional
items (0.2) 7.5 4.2
Earnings per share relating to acquisition
goodwill amortisation 0.5 0.5 0.8
Diluted adjusted earnings per share 6.9 5.5 15.6
(b) Total Group
The calculation of basic earnings per share for the total Group is based
on the profit on ordinary activities, after taxation and minority
interests, of £113.4m (2001: loss of £(453.8)m) and the weighted
average number of shares in issue during the period of 1,678.7m
(2001: 1,659.8m). The diluted earnings per share for the total Group is
based on the diluted profit on ordinary activities, after taxation and
minority interests, of £111.6m (2001: loss of £(456.3)m) and the diluted
weighted average number of shares in issue during the period of 1,686.3m
(2001: 1,668.9m).
The difference between the basic and diluted earnings per share and the
basic adjusted and diluted adjusted earnings per share is reconciled as
follows:
As restated As restated
Half year ended Half year ended Year ended
Pence per share 3 August 2002 4 August 2001 2 February 2002
Basic earnings/(loss) per share 6.8 (27.3) (14.9)
Earnings per share relating to exceptional
items (0.2) 31.0 28.2
Earnings per share relating to acquisition
goodwill amortisation 0.5 0.7 1.1
Basic adjusted earnings per share 7.1 4.4 14.4
Diluted earnings/(loss) per share 6.6 (27.3) (15.0)
Earnings per share relating to exceptional
items (0.2) 30.8 27.9
Earnings per share relating to acquisition
goodwill amortisation 0.5 0.7 1.1
Diluted adjusted earnings per share 6.9 4.2 14.0
6. Reconciliation of cashflow from operating activities
Half year ended Half year ended Year ended
£ millions 3 August 2002 4 August 2001 2 February 2002
Group operating profit 276.8 100.7 448.8
Impairment charge - 93.7 93.7
Depreciation and amortisation 97.9 138.0 232.2
374.7 332.4 774.7
Decrease/(increase) in development work
in progress 10.9 (14.9) 27.7
Increase in stocks (96.7) (13.8) (72.3)
Decrease/(increase) in debtors 118.2 161.1 (119.1)
Increase/(decrease) in creditors 30.1 (78.8) 210.6
Loss on disposal of fixed assets 7.6 3.2 3.7
Net cash inflow from operating activities 444.8 389.2 825.3
7. Reconciliation of net borrowings
(a) Net cash/(debt) at the period end date is analysed as follows:
Half year ended Half year ended Year ended
£ millions 3 August 2002 4 August 2001 2 February 2002
Net debt at start of period (1,044.2) (1,873.8) (1,873.8)
Increase/(decrease) in cash 2,056.2 (13.7) 59.2
Debt in subsidiary becoming a joint venture/ joint
venture becoming a subsidiary 172.3 - (102.3)
Net movement in short-term deposits (246.6) - 276.3
Net movement in investments (100.6) 23.1 1.6
(Decrease)/increase in market value of investments (0.1) - 6.2
Debt demerged with Woolworths Group plc - - 191.8
Net movement in loans 303.7 114.4 378.9
Foreign exchange effects (11.9) 16.7 17.9
Net cash/(debt) at end of period 1,128.8 (1,733.3) (1,044.2)
(b) Crealfi S.A.
During 2001, the Group reorganised its consumer credit operations in
France. As a result, the Group had an economic interest of 49.99% in
Crealfi S.A. At 2 February 2002, Crealfi was recognised as a subsidiary
company because of the Group's ability to exercise control of the venture
by way of a commitment to increase the Group's economic interest.
Since that date, as a consequence of the Group's announcement to separate
the Home Improvement and Electricals businesses, the Group's arrangements
with its joint venture partner have been amended such that
the Group will no longer increase its economic interest above 49.99%.
As a result, the Group no longer has the ability to exercise control and
the business is no longer a subsidiary. Therefore, Crealfi is no
longer consolidated but is shown within investments in joint ventures.
The Group's share of the net assets of Crealfi of £7.6m (£101.6m assets
and £94.0m liabilities) are shown on the face of the balance sheet within
the Group's fixed asset investments.
There was no payment associated with the change of control, and the
Group's share of net assets remained unchanged and no profit or loss
arose in the consolidated financial statements.
8. Accounting policies
Accounting policies have been consistently applied on the basis set out
in the Group's financial statements for the year ended 2 February 2002.
9. Acquisitions
During the half year ended 3 August 2002, the Group has made a number of
acquisitions for a total consideration of £23.7m giving rise to
provisional goodwill of £9.7m. These include the acquisition of a
further 11 BUT stores previously operated by franchisees, an increase of
the Group's interest in the DIY business in China and the acquisition of
a number of Home Improvement assets in France.
10. Post balance sheet events
(a) Rights Issue
On 11 July 2002 the Company launched a one for one Rights Issue of
1,293,642,792 new Kingfisher shares at 155 pence per share in connection
with the Offer for Castorama Dubois Investissements SCA, as approved by
the shareholders on 7 June 2002. At the balance sheet date the Company
had received and processed acceptances for 1,241,323,467 shares raising
net proceeds, after expenses, of £1.91 billion. After the
balance sheet date, underwriters placed the remaining 52,319,325 shares
raising a further £81.1 million.
(b) Offer for the equity and equity-linked securities of Castorama Dubois
Investissements SCA
The Company made an offer on 4 September 2002 for the shares, bonds
convertible into shares, bonds exchangeable for shares and warrants to
subscribe for shares issued by Castorama Dubois Investissements
S.C.A. ('Castorama') whose main terms are the following:
• euros 67 in cash for each Castorama share tendered;
• euros 268 in cash for each Castorama May 1996 bond convertible into
Castorama shares tendered;
• euros 268 in cash for each Castorama 1998-2003 bond convertible into
Castorama shares tendered;
• euros 305.3 in cash for each Castorama 1999-2004 bond convertible
into Castorama shares tendered;
• euros 401.8 in cash for each Castorama 2000-2005 bond convertible
into Castorama shares tendered;
• euros 438.6 in cash for each Castorama 2001-2006 bond exchangeable
into Castorama shares tendered;
• euros 3,168 in cash for each warrant to subscribe for Castorama
shares tendered.
This offer will normally close on 16 October 2002.
Following the start of the Offer, no separate announcement of Castorama's
results for the half year to 31 July 2002 will be made but the
consolidated sales figures for the half year will be published in the BALO
of 18 September 2002 and the full results in the BALO of 25 September 2002.
A copy of the full results will also be available on
www.castorama-group.com from today.
11. Full year comparatives
The results for the year to 2 February 2002 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.
12. Shareholder information
Copies of the results will be sent to shareholders on 2 October 2002 and
additional copies will be available from Kingfisher plc, North West House,
119 Marylebone Road, London NW1 5PX.
The results can also be accessed on line at www.kingfisher.com/shareholder
as well as other shareholder information.
Timetable of events
2 October 2002 Ex-dividend date
4 October 2002 Record date for interim dividend
15 October 2002 Posting of scrip dividend circular and forms of
election
6 November 2002 Final date for receipt of forms of election
21 November 2002 Date for posting of certificates for new shares
22 November 2002 Date for payment of interim dividend
Independent review report to the members of Kingfisher plc
We have been instructed by the Company to review the financial information set
out on pages 12 to 15 and the notes 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 Financial Services Authority 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 for use in the United Kingdom. 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 United Kingdom 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 3 August 2002.
PricewaterhouseCoopers
Chartered Accountants
London
17 September 2002
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 10 hours ago Alphawave IP Group
- 11 hours ago WH Smith
- 11 hours ago Staffline Group
- 12 hours ago Manchester & London Investment Trust
- 12 hours ago Associated British Foods