Interim Results
Kingfisher PLC
16 September 2004
EMBARGOED UNTIL 0700 HOURS
Thursday 16th September 2004
Kingfisher plc
Interim results for the 26 weeks ended 31 July 2004
Kingfisher plc, Europe's leading home improvement retailer, today announces interim results:
Adjusted pre-tax profit up 18.4% to £345.9 million
Group Financial Highlights (Continuing operations 1,2)
• Retail sales up 9.6% to £3.9 billion (2003/04: £3.6 billion), up 11.6% in constant currencies and up 6.1%
like-for-like
• Retail profit(3) up 13.2% to £355.8 million (2003/04: £314.4 million), up 15.1% in constant currencies
• Adjusted pre-tax profit (4) up 18.4% to £345.9 million (2003/04: £292.2 million), up 20.7% in constant
currencies
• Pre-tax profits up 27.1% to £346.3 million (2003/04: £272.5 million)
• Attributable post-tax profits up 29.9% to £237.3 million (2003/04: £182.6 million)
• Adjusted basic earnings per share (4) up 15.7% to 10.3p (2003/04: 8.9p)
• Basic earnings per share up 27.2% to 10.3p (2003/04: 8.1p)
• Interim dividend up 10.0% to 3.85p (2003/04: 3.5p)
• Total net debt reduced to £622.2 million (£843.8 million at 31 January 2004)
(1) Continuing home improvement business only; excludes businesses sold or demerged during 2003/04
(2) Prior year total Group retail sales, including businesses sold or demerged during 2003/04, were £5.2 billion.
Pre-tax profits were £125.4 million and attributable post-tax losses were £52.8 million as shown in the
consolidated profit and loss account.
(3) Retail profit is stated before property, other operating costs, exceptional items, and goodwill amortisation
(4) Before goodwill amortisation and exceptionals
Company Profile
Kingfisher plc is Europe's leading home improvement retailer and the third
largest in the world, with 579 stores in nine countries in Europe and Asia.
Kingfisher also has a strategic alliance with Hornbach, Germany's leading DIY
Warehouse retailer, with more than 110 stores in Germany and seven other
European countries.
Operating Highlights (all figures in constant currencies)
UK and Ireland (58.2% of Group Sales)
• Total sales up 6.3% (3.1% LFL), retail profit up 10.2%.
- B&Q total sales up 5.9% (2.5% LFL), retail profit up 12.9% to £207.8 million. Strong growth in
kitchens, bathrooms, electricals and joinery offset weaker seasonal ranges.
- 16 more B&Q mini-Warehouse conversions, 44 now trading.
- Screwfix Direct sales up 15.0%, retail profit down £3.9 million to £6.1 million after pre-opening
and transition costs of new fulfilment capacity.
France and Rest of World (41.8% of Group Sales)
• Total Sales up 19.9% (10.7% LFL), retail profit up 23.3%.
France
- Castorama sales up 7.8% (5.3% LFL), retail profit up 12.7% to £68.3 million. Castorama's
revitalisation continued with seven store revamps and two relocations. Sales were stimulated by
pricing initiatives.
- Brico Depot sales up 26.6% (19.0% LFL), retail profit up 13.9% to £36.0 million. Sales were boosted
by the new catalogue launch in April.
Rest of World
- Sales up 48.2% (15.2% LFL), retail profit up 64.2% to £37.6 million, including the exceptional first
quarter growth in Poland ahead of EU accession.
- Announcement of planned entry into Russia
Gerry Murphy, Chief Executive, said:
'Kingfisher made good progress in the first half with double digit sales and
profit growth. In the UK, B&Q's non-seasonal ranges sold well, offsetting a
weaker performance in a difficult seasonal market. In France, Castorama's
revitalisation continued and Brico Depot's new catalogue took the market by
storm. Kingfisher's other European and Asian businesses all made good progress.
Over 60% of Kingfisher's sales growth in the first half came from outside the
UK.
'Our home improvement markets are dynamic and competitive. To sustain our growth
and improve returns for our shareholders, we continue to develop our stores and
infrastructure and to work with our suppliers to deliver more choice and better
value to our customers.'
Enquiries:
Ian Harding, Director of Communications 020 7644 1029
Nigel Cope, Head of External Communications 020 7644 1030
Kingfisher plc 020 7372 8008
FIRST HALF REVIEW
HOME IMPROVEMENT - Continuing Businesses
Total reported sales grew 9.6% to £3.9 billion (2003/04: £3.6 billion), up 11.6%
on a constant currency basis, with progress in each of the Group's nine European
and Asian markets. During the first half, an additional 13 net new stores were
added, taking the store network to 579. On a like-for-like basis (LFL), Group
sales were up 6.1% (2003/04: 5.9%) supported by continuing re-investment of
supply-side benefits into lower prices and better choice for customers.
Retail profit grew 13.2% to £355.8 million (2003/04: £314.4 million), up 15.1%
on a constant currency basis. Profit growth was driven by higher sales,
operating cost efficiency improvements, and progress in cross-Group buying,
international sourcing and own-brand development.
Property income (primarily rent charged to B&Q on UK properties owned by
Kingfisher) grew 17.4% to £20.9 million (2003/04: £17.8 million) reflecting
rental inflation and some additional properties.
Other operating costs (Group central costs) fell 14.4% to £18.4 million (2003/
04: £21.5 million) following last year's reorganisation of the corporate offices
in London and Lille.
Net interest costs were reduced to £12.4 million (2003/04: £18.5 million)
reflecting lower average net debt levels during the period.
The effective tax rate on profit before exceptional items and goodwill
amortisation is 31.5% based on current expectations for the 2004/05 full year.
This compares with an effective rate for continuing operations of 31.6% on the
same basis for the last full year.
Profit after tax (attributable to shareholders) increased 29.9% to £237.3
million (2003/04: £182.6 million) with no exceptionals in the current period.
Adjusted basic earnings per share were ahead 15.7% to 10.3p (2003/04: 8.9p)
reflecting the growth in retail profit, lower Group central costs and reduced
interest.
The interim dividend is proposed at 3.85p per share (2003/04: 3.50p), up 10.0%
year on year.
Cashflow was strong with operating activities generating £543.3 million of cash
(2003/04: £467.9 million for continuing businesses). Net capital expenditure on
new and better stores and supporting infrastructure was £200.5 million (2003/04:
£157.8 million from continuing businesses) but is expected to increase in the
second half, with 33 new stores due to open compared to 13 in the first half.
Net debt fell 26.3% to £622.2 million (£843.8 million at 31 January 2004),
reflecting strong operating cashflow.
UK & IRELAND
For the 26 weeks ended 31 July 2004
Retail Sales £m % Total % LFL Retail Profit £m % Total
Change Change Change
2004 2003 2004 2003
B&Q 2,172.9 2,052.6 5.9% 2.5% 207.8 184.1 12.9%
Screwfix Direct 123.2 107.1 15.0% 15.0% 6.1 10.0 (39.0%)
Total UK 2,296.1 2,159.7 6.3% 3.1% 213.9 194.1 10.2%
B&Q's total sales grew 5.9% to £2.2 billion (2.5% LFL) and retail profit grew by
12.9% to £207.8 million.
Increased market share - In a UK repair maintenance and improvement market which
is estimated to have grown by 3% in the period, B&Q's share increased to 14.7%
(14.4% for the 12 months ended 31 January 2004).
Growth in non-seasonal categories - B&Q's Showroom ranges (kitchen, bathroom and
bedroom) sold well, as did new joinery and electrical ranges. Sales of seasonal
ranges, such as garden furniture and exterior decoration, were weak, affected by
poor weather and consequent promotional activity across a very competitive DIY
market. B&Q Direct's online sales increased by nearly 50%.
Mini-Warehouse conversions -16 Supercentre stores were converted to the
mini-Warehouse format, bringing the total now trading to 44. Results to date are
encouraging with those stores converted 12 months ago showing an additional 11%
sales uplift compared with a control group of similar stores. This reflects
higher customer count and average spend as customers respond to the improved
ranges and lower prices. Margins were maintained as the costs of lower prices
and improved store service were offset by increased sales of higher margin
products. A further 12 conversions are planned in the second half.
New store development - B&Q opened two new Warehouse stores during the period,
including B&Q's largest UK store at Trafford Park. B&Q expects to open a further
nine Warehouse stores and seven mini-Warehouses in the second half, representing
growth in selling space of 6.7% at the year-end.
Retail margin improved from 9.0% to 9.6%. The costs of lowering prices for
customers, revamping stores and introducing new products and services were more
than offset by further progress in Strategic Supplier Management and reduced
shrinkage. In addition, an overhead efficiency drive is in place which will
benefit the second half.
SCREWFIX DIRECT grew its catalogue and online sales of tools and trade materials
by 15.0% to £123.2 million. However, retail profit declined by £3.9 million to
£6.1 million due to £3.6 million of pre-opening and transition costs associated
with its new fulfilment centre at Stoke which started shipping at the end of
June. This transition, which will result in a 40% capacity expansion, is now
nearing completion with single site operation planned from October.
FRANCE
For the 26 weeks ended 31 July 2004
Retail sales £m 2004 2003 % Change % Change % LFL
(Reported) (Constant) Change
Castorama 827.1 794.8 4.1% 7.8% 5.3%
Brico Depot 463.5 379.3 22.2% 26.6% 19.0%
Total France 1,290.6 1,174.1 9.9% 13.9% 9.7%
Retail profit £m 2004 2003 % Change % Change
(Reported) (Constant)
Castorama 68.3 62.8 8.8% 12.7%
Brico Depot 36.0 32.8 9.8% 13.9%
Total France 104.3 95.6 9.1% 13.1%
2004 £1 = 1.4952 Euro; 2003 £1 = 1.4434 Euro
CASTORAMA sales were £827.1 million, up 7.8% in constant currency (5.3% LFL).
Retail profit of £68.3 million was up 12.7% in constant currency after absorbing
£2.9 million additional store revamping costs than in the same period last year,
and £3 million additional social and retail space taxes.
Sales growth ahead of the market - Castorama continued to grow ahead of a French
DIY market, estimated by Banque de France to have grown by 2.2% LFL in the first
half. Customer numbers grew and the average spend per visit rose compared with
the same period last year.
Reinforced price message - Castorama has continued to focus on price
competitiveness with the introduction of new 'premier prix' (entry-price)
products into key ranges and more prominent communication of value in stores and
marketing. The price message has also been reinforced using price-led promotions
and special buys such as 'Prix Jamais Vu' (Prices Never Seen Before).
Hardware, Showroom and Seasonal sales strong -The Hardware category was boosted
by sales of air conditioning products and pressure washers. In Showroom,
kitchens and associated fittings performed well, and Seasonal sales were strong,
driven by sales of garden furniture and maintenance equipment in favourable
second quarter weather.
Store revitalisation - Castorama revamped seven stores and relocated two to
brand new stores. These stores feature expanded ranges including more
entry-price products and more aspirational, decorative and showroom ranges, new
merchandising techniques and new store layouts. In total, 12 stores have now
been revitalised, accounting for 13% of the total selling space. The three
relocated new stores opened last year have traded well with 16% higher sales and
a similar increase in store profit compared with a control group of comparable
sized stores.
Retail profit margins were ahead, with Strategic Supplier Management and other
cost-productivity savings more than funding the cost of lower selling prices and
store refurbishment.
BRICO DEPOT delivered sales of £463.5 million, up 26.6% in constant currency
(19.0% LFL). Sales were strong in all categories, stimulated by the launch in
April of Brico Depot's first ever national catalogue, related promotional
activity, including increased 'arrivages' (special buys) and local marketing.
Reported retail profit was £36.0 million, up nearly 14% in constant currency.
Retail profit margin softened, reflecting the cost of launching the catalogue,
as well as absorbing £1.2 million of additional store pre-opening costs, and
additional social and retail space taxes of £0.7 million. Three new stores
opened in the period (2003/04: two stores opened).
REST OF WORLD
For the 26 weeks ended 31 July 2004
Retail sales £m 2004 2003 % Change % Change % LFL
(Reported) (Constant) Change
Castorama Poland 158.1 133.5 18.4% 32.7% 20.6%
Castorama Italy 110.2 83.5 32.0% 36.7% 5.5%
B&Q China 84.5 49.8 69.7% 91.6% 18.4%
Other Int'l (1) 8.4 - N/A N/A N/A
Total 361.2 266.8 35.4% 48.2% 15.2%
Retail profit £m 2004 2003 % Change % Change
(Reported) (Constant)
Castorama Poland 25.6 17.3 48.0% 66.2%
Castorama Italy 7.8 6.0 30.0% 34.5%
B&Q China (0.6) (2.7) 77.8% 75.0%
B&Q Taiwan (2) 3.0 2.3 30.4% 42.9%
Other Int'l (1) 1.8 1.8 - (10.0%)
Total 37.6 24.7 52.2% 64.2%
(1) Other international includes Hornbach in Germany, Koctas in Turkey, B&Q
Korea and Brico Stock in Spain.
(2) Joint venture sales not consolidated
Strong growth in all areas with total sales of £361.2 million, up 48.2% in
constant currencies, (15.2% LFL). Reported retail profit was £37.6 million, up
64.2% in constant currencies.
Exceptional Castorama Poland performance ahead of VAT imposition - Sales were
£158.1 million, up 32.7% in constant currencies (20.6% LFL), and retail profit
was £25.6 million, up 66.2% in constant currencies. All the sales growth was
achieved in the first quarter (LFL up 52.7%) as customers anticipated increased
VAT charges on certain building products which came into effect with EU
accession in May. Sales in the second quarter declined in a generally weak
Polish retail market as consumers adjust to the new tax regime. Castorama's
customer footfall remains strong and non-VAT impacted decorative ranges
continued to perform well. Two new stores opened (2003/04: one store opened)
bringing the total to 21.
Expansion at Castorama Italy - Sales were £110.2 million, up 36.7% in constant
currencies (5.5% LFL) and retail profit was £7.8 million, up 34.5% in constant
currencies. Sales improvement was broadly based and supported by catalogue
activity in Showroom, Garden and Decoration launches, and the modernisation of
two stores. Retail margin declined slightly reflecting the pre-opening costs of
three new stores opened (2003/04: one store opened), bringing the total to 21.
Continued progress in Asia with sales at B&Q China reaching £84.5 million,
almost doubling in constant currencies (18.4% LFL). Retail margin, before
pre-opening costs, improved strongly. Three new stores opened (2003/04: three
stores opened), taking the total to 18. B&Q Taiwan, 50% owned by Kingfisher,
delivered a strong profit uplift (up 42.9% in constant currencies), despite some
instability as a result of the presidential elections. No new stores opened in
the first half (2003/04: one store opened).
Other International includes Hornbach, which contributed £8.3 million of profit
in the period (2003/04: £6.5 million in constant currency). This was offset by
Kingfisher's development costs in Europe and Asia. Brico Stock, the Spanish
adaptation of Brico Depot, continues to develop and a further two stores were
added taking the total to three. Construction started on the first B&Q Korea
store, due to open next year. In Turkey, Koctas, 50% owned by Kingfisher,
performed well with work continuing on building a new store in Ankara.
Planned entry into Russia - In June, Kingfisher announced plans to open its
first Castorama stores in Russia, encouraged by the success of Castorama Poland.
Russia is a large and growing market with 13 cities with more than a million
inhabitants, and strong demand for home improvement products. A country manager
has been appointed and the first stores are expected to be opened in Russia
within two years.
Further copies of this announcement can be downloaded from www.kingfisher.com or
by application to: The Company Secretary, Kingfisher plc, 3 Sheldon Square,
London, W2 6PX
DATA BY COUNTRY - as at 31 July 2004
Home Improvement Store numbers Selling space Employees
(000s sq.m.) (FTE)
B&Q 328 2,162 26,974
Screwfix Direct - - 1,555
Total UK & Ireland 328 2,162 28,529
Castorama 104 978 14,580
Brico Depot 62 309 4,574
Total France 166 1,287 19,154
Castorama Poland 21 198 4,509
Castorama Italy 21 136 2,137
B&Q China 18 228 4,589
B&Q Taiwan 17 83 1,707
Other International (1) 8 40 620
Total Rest of World 85 685 13,562
Total 579 4,134 61,245
(1) Other international includes Koctas in Turkey, B&Q Korea and Brico Stock
in Spain.
SECOND QUARTER - 13 weeks to 31 July 2004
Retail Sales £m % Total % LFL Retail Profit £m % Total
2004 2003 Change Change 2004 2003 Change
(Reported)
B&Q 1,104.1 1,043.7 5.8% 3.2% 125.3 113.3 10.6%
Screwfix Direct 59.0 52.1 13.2% 13.2% 1.4 4.6 (69.6%)
Total UK & Ireland 1,163.1 1,095.8 6.1% 3.7% 126.7 117.9 7.5%
Castorama 437.2 429.1 1.9% 4.9% 40.3 35.4 13.8%
Brico Depot 250.1 197.5 26.6% 24.7% 19.4 18.3 6.0%
Total France 687.3 626.6 9.7% 11.3% 59.7 53.7 11.2%
Castorama Poland 77.4 79.0 (2.0%) (1.0%) 11.9 11.0 8.2%
Castorama Italy 64.4 46.7 37.9% 9.3% 6.3 3.3 90.9%
B&Q China 51.8 29.4 76.2% 17.2% 1.5 (0.5) 400.0%
B&Q Taiwan (2) - - - - 1.0 0.9 11.1%
Other Int'l (2) 6.1 - - - 3.3 5.0 (34.0%)
Rest of World 199.7 155.1 28.8% 5.6% 24.0 19.7 21.8%
Total 2,050.1 1,877.5 9.2% 6.3% 210.4 191.3 10.0%
(2) Joint venture sales not consolidated.
KINGFISHER PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
For the half year ended 31 July 2004
Half year ended Half year ended 2 August 2003
31 July 2004
Total Continuing Discontinued Total
operations operations
£ millions Notes (restated)* (restated)* (restated)*
Turnover including share of joint ventures 4,000.9 3,668.7 1,655.2 5,323.9
Less: share of joint ventures (49.5) (59.6) (8.2) (67.8)
Group turnover 1 3,951.4 3,609.1 1,647.0 5,256.1
Group operating profit 346.0 285.6 46.5 332.1
Share of operating profit in:
Joint ventures 3.4 3.8 2.3 6.1
Associates 9.3 7.4 2.2 9.6
Total operating profit including share of joint
ventures and associates 358.7 296.8 51.0 347.8
Analysed as:
Home Improvement 355.8 314.4 17.8 332.2
Electrical and Furniture - - 38.9 38.9
Property 20.9 17.8 - 17.8
Other operating costs (18.4) (21.5) - (21.5)
Exceptional items - operating 2 - (11.6) (3.5) (15.1)
Acquisition goodwill amortisation (net) 0.4 (2.3) (2.2) (4.5)
Total operating profit including share of joint
ventures and associates 358.7 296.8 51.0 347.8
Exceptional items - non-operating 2
Profit on the disposal of fixed assets - 0.5 - 0.5
Demerger costs - - (43.2) (43.2)
Loss on the sale or termination of operations - - (58.3) (58.3)
Exceptional amounts written off fixed asset
investments 2 - (6.3) - (6.3)
Profit/(loss) on ordinary activities before
interest 358.7 291.0 (50.5) 240.5
Net interest payable (excluding exceptional
financing charges) (12.4) (18.5) (9.7) (28.2)
Exceptional financing charges 2 - - (86.9) (86.9)
Net interest payable (12.4) (18.5) (96.6) (115.1)
Profit/(loss) on ordinary activities before
taxation 346.3 272.5 (147.1) 125.4
Tax on profit/(loss) on ordinary activities
(excluding exceptional tax) (109.1) (89.7) 9.8 (79.9)
Exceptional tax 2 - - (98.5) (98.5)
Tax on profit/(loss) on ordinary activities (109.1) (89.7) (88.7) (178.4)
Profit/(loss) on ordinary activities after
taxation 237.2 182.8 (235.8) (53.0)
Equity minority interests 0.1 (0.2) 0.4 0.2
Profit/(loss) for the period attributable to
shareholders 237.3 182.6 (235.4) (52.8)
Dividends
Ordinary dividends on equity shares 3 (88.0) (81.1)
Dividend in specie relating to the demerger of
Kesa Electricals - (1,592.9)
Retained profit/(loss) for the period 149.3 (1,726.8)
Earnings per share (pence) 4
Basic 10.3 8.1 (2.3)
Diluted 10.2 8.0 (2.3)
Basic - adjusted (1) 10.3 8.9 10.2
Diluted - adjusted (1) 10.2 8.8 10.2
(1) Adjusted EPS is stated before exceptional items and goodwill
amortisation.
* The comparative balances have been restated to reflect the
implementation of UITF38 and FRS5 Application Note G.
The profit and loss account for the half year ended 31 July 2004 relates
entirely to continuing operations.
KINGFISHER PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 January 2004
Year ended 31 January 2004
Continuing Discontinued Total
£ millions Notes operations operations
Turnover including share of joint ventures 7,177.4 1,756.3 8,933.7
Less: share of joint ventures (126.9) (8.2) (135.1)
Group turnover 1 7,050.5 1,748.1 8,798.6
Group operating profit 585.1 50.1 635.2
Share of operating profit/(loss) in:
Joint ventures 7.5 2.3 9.8
Associates 16.1 2.4 18.5
Total operating profit including share of joint
ventures and associates 608.7 54.8 663.5
Analysed as:
Home Improvement 638.2 21.6 659.8
Electrical and Furniture - 38.9 38.9
Property 32.3 - 32.3
Other operating costs (46.2) - (46.2)
Exceptional items - operating 2 (11.6) (3.5) (15.1)
Acquisition goodwill amortisation (net) (4.0) (2.2) (6.2)
Total operating profit including share of joint
ventures and associates 608.7 54.8 663.5
Exceptional items - non-operating 2
Demerger costs - (43.2) (43.2)
Loss on the sale or termination of operations - (58.3) (58.3)
Profit on the disposal of fixed assets 2.0 - 2.0
Exceptional amounts written off fixed asset
investments 2 (6.3) - (6.3)
Profit/(loss) on ordinary activities before interest 604.4 (46.7) 557.7
Net interest payable (excluding exceptional financing
charges) (33.6) (10.5) (44.1)
Exceptional financing charges 2 - (86.9) (86.9)
Net interest payable (33.6) (97.4) (131.0)
Profit/(loss) on ordinary activities before taxation 570.8 (144.1) 426.7
Tax on profit/(loss) on ordinary activities
(excluding exceptional tax) (182.5) 8.4 (174.1)
Exceptional tax 2 75.2 (98.5) (23.3)
Tax on profit/(loss) on ordinary activities (107.3) (90.1) (197.4)
Profit/(loss) on ordinary activities after taxation 463.5 (234.2) 229.3
Equity minority interests (0.2) 0.5 0.3
Profit/(loss) for the financial year attributable to
shareholders 463.3 (233.7) 229.6
Dividends
Ordinary dividends on equity shares (221.1)
Dividend in specie relating to the demerger of Kesa (1,592.9)
Electricals
Retained loss for the financial year (1,584.4)
Earnings per share (pence) 4
Basic 20.3 10.1
Diluted 20.2 10.0
Basic - adjusted 17.8 19.2
Diluted - adjusted 17.7 19.1
KINGFISHER PLC
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 31 July 2004
£ millions Notes 31 July 2004 2 August 2003 31 January 2004
(restated)
Fixed assets
Intangible assets - goodwill 2,455.3 2,495.3 2,455.3
Tangible assets 2,890.7 2,524.1 2,781.2
Investments in joint ventures
Share of gross assets 51.1 59.9 50.6
Share of gross liabilities (28.0) 23.1 (39.5) 20.4 (30.0) 20.6
Investments in associates 129.0 122.2 125.1
Other investments 0.2 0.2 0.2
5,498.3 5,162.2 5,382.4
Current assets
Stocks 1,228.7 1,219.6 1,071.7
Debtors 437.3 447.4 518.8
Investments 15.7 32.3 23.8
Cash at bank and in hand 311.4 100.7 144.2
1,993.1 1,800.0 1,758.5
Creditors
Amounts falling due within one year (2,112.7) (2,280.0) (1,925.2)
Net current liabilities (119.6) (480.0) (166.7)
Total assets less current liabilities 5,378.7 4,682.2 5,215.7
Creditors
Amounts falling due after more than one year (739.7) (665.7) (744.9)
Provisions for liabilities and charges (63.7) (38.7) (64.2)
4,575.3 3,977.8 4,406.6
Called up share capital 367.3 364.1 366.3
Reserves 6 4,205.2 3,610.8 4,037.4
Equity shareholders' funds 4,572.5 3,974.9 4,403.7
Equity minority interests 2.8 2.9 2.9
4,575.3 3,977.8 4,406.6
Approved by the Board
Duncan Tatton-Brown
Director
15 September 2004
KINGFISHER PLC
SUMMARY CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
For the half year ended 31 July 2004
Notes Half year ended Half year ended Year ended
31 July 2004 2 August 2003 31 January 2004
£ millions
Net cash inflow from operating activities 5 543.3 569.4 777.4
Dividends received from joint ventures and
associates - 1.5 2.4
Returns on investment and servicing of finance
Net interest received/(paid) 1.4 (39.9) (55.9)
Exceptional financing charges - (111.2) (113.9)
Exceptional interest receipt 2(c) 23.9 - -
Net cash inflow/(outflow) from returns on
investment and servicing of finance 25.3 (151.1) (169.8)
Taxation
Tax paid (68.0) (125.8) (286.7)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (204.4) (194.6) (389.1)
Receipts from the sale of tangible fixed assets 3.9 788.0 819.2
Net cash (outflow)/inflow from capital
expenditure and financial investment (200.5) 593.4 430.1
Acquisitions and disposals
Purchase of subsidiary and business
undertakings - (57.8) (63.7)
Sale of subsidiary and business undertakings 6.5 (39.2) 203.6
Loan to former subsidiary net of repayment - - (18.1)
Purchase of associates and joint ventures - (1.8) (1.8)
Non-operating demerger costs - (33.6) (40.7)
Cash disposed on sale of subsidiary
undertakings - - (27.3)
Net cash inflow/(outflow) from acquisitions and
disposals 6.5 (132.4) 52.0
Equity dividends paid to shareholders (136.1) (75.8) (119.2)
Net cash inflow before use of liquid resources
and financing 170.5 679.2 686.2
Management of liquid resources
Net movement in short-term deposits (146.6) 13.0 (41.4)
Net movement in short-term investments 8.5 (52.9) (41.7)
Net cash outflow from management of liquid
resources (138.1) (39.9) (83.1)
Financing
Issue of ordinary share capital 6.8 1.1 2.7
Capital element of finance lease rental payment (7.3) (6.5) (11.6)
Receipts from the sale of own shares 1.4 14.9 17.6
Net movement in loans 7.7 (519.4) (584.6)
Net cash inflow/(outflow) from financing 8.6 (509.9) (575.9)
Increase in cash 41.0 129.4 27.2
Reconciliation of net cash flow to movement in
net debt
Net debt at start of period (843.8) (1,926.4) (1,926.4)
Increase in cash 41.0 129.4 27.2
Increase/(decrease) in short-term deposits 146.6 (13.0) 41.4
Increase in investments (8.5) 52.9 41.7
Debt demerged with KESA Electricals - 423.0 423.0
Amortisation of underwriting and issue costs - (1.5) (1.5)
Decrease in debt and lease financing 21.2 525.9 597.7
Foreign exchange effects 21.3 (73.1) (46.9)
Net debt at end of period (622.2) (882.8) (843.8)
KINGFISHER PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS (UNAUDITED)
For the half year ended 31 July 2004
1. Turnover
Half year ended Half year ended Year ended
£ millions 31 July 2004 2 August 2003 31 January 2004
(restated)
Retail sales from continuing operations 3,947.9 3,600.6 7,038.2
Third party rental income 3.5 6.4 10.1
Property development sales - 2.1 2.2
Property turnover 3.5 8.5 12.3
Continuing operations 3,951.4 3,609.1 7,050.5
Discontinued operations - 1,647.0 1,748.1
Total turnover 3,951.4 5,256.1 8,798.6
2. Exceptional items
There were no exceptional items during the half year ended 31 July 2004.
2(a) Operating exceptional items
Prior year exceptional group restructuring costs of £9.8m (continuing) include
the costs of restructuring the Kingfisher plc head office following the demerger
of Kesa Electricals plc and additional costs relating to the integration of the
head offices in London and Lille.
Prior year demerger costs of £5.3m (£1.8m continuing, £3.5m discontinued) relate
to incremental internal costs directly attributable to the Kesa demerger.
2(b) Non-operating exceptionals
Prior year provisions for loss on the sale of operations amounting to £58.3m for
the half year ended 2 August 2003 relate to the disposals of non-core DIY
businesses; Reno Depot in Canada, NOMI in Poland, Dubois Materiaux in France,
Castorama Brazil and Castorama Belgium.
Prior year demerger costs of £43.2m relate to external costs, principally
professional advisors' and commitment fees, directly attributable to the Kesa
demerger.
Exceptional amounts written off fixed asset investments in the prior year relate
to the Group's investment in the World Wide Retail Exchange, a company providing
an independent online e-marketplace for products and services.
2(c) Other exceptional charges
Prior year exceptional financing charges of £86.9m related to the restructuring
of the Group's debt as a result of the demerger of Kesa Electricals.
The prior year exceptional tax charge of £98.5m related to tax paid to the
French tax authorities as a consequence of the demerger of Kesa Electricals. The
Group has initiated proceedings for the recovery of the tax paid and although
these proceedings may take some time to be resolved, considers that its risk of
being ultimately liable for this amount is low.
3. Dividends
Half year ended Half year ended Year ended
£ millions 31 July 2004 2 August 2003 31 January 2004
Interim dividend payable 89.9 81.1 81.1
Final proposed - 143.4
-
Dividend payable to Employee Share Ownership
Plan Trust (ESOP) shares
(1.9) - (3.4)
Dividend in specie relating to the demerger of
Kesa Electricals
- 1,592.9 1,592.9
88.0 1,674.0 1,814.0
An interim dividend of 3.85p amounting to £89.9m will be paid on 12th November
2004 to shareholders on the Register at 24th September 2004. A scrip dividend
will be offered and forms of election will be sent to shareholders on 6th
October 2004.
4. 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.
The weighted average number of shares in issue during the period was 2,301.3m
(2003: 2,263.7m) and the diluted weighted average number of shares in issue
during the period was 2,318.7m (2003: 2,274.4m).
Supplementary earnings per share are presented. These exclude the effects of
operating and non-operating exceptional items and acquisition goodwill
amortisation to allow comparison to the prior year on a comparable basis.
4(a) Continuing operations
Earnings per share for continuing operations is presented in order to provide a
more meaningful comparison.
The calculation of basic and diluted earnings per share for continuing
operations is based on the profit on ordinary activities, after taxation and
minority interests, of £237.3m (2003: restated £182.6m).
The difference between the basic and diluted earnings per share and the basic
adjusted and diluted adjusted earnings per share is reconciled as follows:
Half year ended Half year ended Year ended
Pence per share 31 July 2004 2 August 2003 31 January 2004
(restated)
Basic earnings per share 10.3 8.1 20.3
Effect of exceptional items - 0.7 (2.7)
Acquisition goodwill amortisation (net of - 0.1 0.2
tax)
Basic adjusted earnings per share 10.3 8.9 17.8
Diluted earnings per share 10.2 8.0 20.2
Effect of exceptional items - 0.7 (2.7)
Acquisition goodwill amortisation (net of
tax) - 0.1 0.2
Diluted adjusted earnings per share 10.2 8.8 17.7
4(b) Total Group
The calculation of basic and diluted earnings per share for the total Group is
based on the profit on ordinary activities, after taxation and minority
interests, of £237.3m (2003: restated loss of £52.8m).
The difference between the basic and diluted earnings per share and the basic
adjusted and diluted adjusted earnings per share is reconciled as follows:
Half year ended Half year ended Year ended
Pence per share 31 July 2004 2 August 2003 31 January 2004
(restated)
Basic earnings per share 10.3 (2.3) 10.1
Effect of exceptional items - 12.3 8.8
Acquisition goodwill amortisation (net of tax) - 0.2 0.3
Basic adjusted earnings per share 10.3 10.2 19.2
Diluted earnings per share 10.2 (2.3) 10.0
Effect of exceptional items - 12.3 8.8
Acquisition goodwill amortisation (net of tax) - 0.2 0.3
Diluted adjusted earnings per share 10.2 10.2 19.1
5. Reconciliation of cashflow from operating activities
Half year ended Half year ended Year ended
31 July 2004 2 August 2003 31 January 2004
£ millions (restated)
Group operating profit 346.0 332.1 635.2
Depreciation and amortisation 73.0 97.5 175.2
419.0 429.6 810.4
Decrease in development work in progress - 5.1 5.1
Increase in stocks (169.0) (87.2) (74.5)
Decrease in debtors 18.1 86.9 1.1
Increase in creditors 276.1 126.1 41.3
(Loss)/profit on disposal of fixed assets (0.9) 8.9 (6.0)
Net cash inflow from operating activities 543.3 569.4 777.4
In the prior year, the cash flow incorporated cash flows from the discontinued
businesses.
Depreciation and amortisation shown above includes £73.0m in respect of the
Group's continuing operations (2003: £63.4m; and £139.3m for the year ended 31
January 2004).
6. Reserves
The movement in the Group's consolidated reserves in the period to 31 July 2004
is summarised as follows:
Share Revaluation Non- Profit Total
Premium Reserve Distributable and loss
Account Reserve account
At 1 February 2004 2,150.9 441.3 159.0 1,286.2 4,037.4
Shares issued under option schemes 7.0 - - (0.8) 6.2
Scrip dividend alternative (0.3) - - 5.4 5.1
Profit for the financial period - - - 237.3 237.3
Ordinary dividends on equity shares - - (88.0) (88.0)
-
ESOP shares disposed - - - 1.8 1.8
Net foreign exchange adjustments - - - 10.9 10.9
Tax on exchange adjustments - - - (5.5) (5.5)
At 31 July 2004 2,157.6 441.3 159.0 1,447.3 4,205.2
The cost of ESOP shares deducted from the profit and loss reserve at 31 July
2004 is £123.7m (2003: £127.2m; and £126.8m for the year ended 31 January 2004).
7. Accounting policies
Accounting policies have been consistently applied on the basis set out in the
Group's financial statements for the year ended 31 January 2004. As a result,
the comparatives at 2 August 2003 have been restated for first time adoption of
Application Note G of Financial Reporting Standard 5 'Revenue Recognition' and
Urgent Issues Task Force 38 'Accounting for ESOP Trusts'.
8. Full year comparatives
The results for the year to 31 January 2004 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.
9. Shareholder information
Copies of the results will be sent to shareholders on 8th October 2004 and
additional copies will be available from Kingfisher plc, 3 Sheldon Square,
Paddington, London W2 6PX.
The results can also be accessed on line at www.kingfisher.com as well as other
shareholder information.
Timetable of events
22nd September 2004 Ex-dividend date
24th September 2004 Record date for interim dividend
6th October 2004 Posting of scrip dividend circular and forms of election
28th October 2004 Final date for receipt of forms of election
11th November 2004 Date for posting of certificates for new shares
12th November 2004 Date for payment of interim dividend
Independent review report to Kingfisher plc
We have been instructed by the company to review the financial information which
comprises the profit and loss account, the balance sheet, the cash flow
statement and the related notes. We have read the other information contained in
the interim report and considered whether it contains 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 directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which 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. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
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 2004.
PricewaterhouseCoopers LLP
Chartered Accountants
London
15 September 2004
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