Interim Results - Part 2

Kingfisher PLC 20 September 2007 KINGFISHER PLC CONSOLIDATED INCOME STATEMENT (UNAUDITED) For the half year ended 4 August 2007 Half year ended 4 August 2007 Half year ended 29 July 2006 Before Exceptional Total Before Exceptional Total exceptional items exceptional items Â£ millions Notes items (note 4) items (note 4) Continuing operations: Revenue 3 4,775.1 - 4,775.1 4,349.1 - 4,349.1 Cost of sales (3,147.4) - (3,147.4) (2,860.0) - (2,860.0) Gross profit 1,627.7 - 1,627.7 1,489.1 - 1,489.1 Selling and distribution (1,191.0) - (1,191.0) (1,081.8) - (1,081.8) expenses Administrative expenses (235.8) (10.7) (246.5) (216.9) - (216.9) Other income 10.6 47.9 58.5 11.2 42.0 53.2 Share of post-tax results of joint ventures and associates 3 8.4 - 8.4 5.8 - 5.8 Operating profit 219.9 37.2 257.1 207.4 42.0 249.4 Analysed as: Retail profit 3 240.1 32.2 272.3 231.5 42.0 273.5 Central costs (18.7) 5.0 (13.7) (18.2) - (18.2) Amortisation of acquisition (0.1) - (0.1) (0.1) - (0.1) intangibles Share of interest and taxation (1.4) - (1.4) (5.8) - (5.8) of joint ventures and associates Finance income 18.9 - 18.9 10.6 - 10.6 Finance costs (46.6) - (46.6) (36.9) - (36.9) Net finance costs 5 (27.7) - (27.7) (26.3) - (26.3) Profit before taxation 192.2 37.2 229.4 181.1 42.0 223.1 Income tax expense 6 (57.0) (13.8) (70.8) (62.4) 6.4 (56.0) Profit for the period 135.2 23.4 158.6 118.7 48.4 167.1 Attributable to: Equity shareholders of the 159.6 168.5 Company Minority interests (1.0) (1.4) 158.6 167.1 Earnings per share 7 Basic 6.8p 7.2p Diluted 6.8p 7.2p Adjusted (basic) 5.7p 5.1p The proposed interim dividend for the period ended 4 August 2007 is 3.85p per share. KINGFISHER PLC CONSOLIDATED INCOME STATEMENT (UNAUDITED) For the half year ended 4 August 2007 Year ended 3 February 2007 Before Exceptional Total exceptional items Â£ millions Notes items (note 4) Continuing operations: Revenue 3 8,675.9 - 8,675.9 Cost of sales (5,623.7) - (5,623.7) Gross profit 3,052.2 - 3,052.2 Selling and distribution expenses (2,207.3) - (2,207.3) Administrative expenses (433.7) - (433.7) Other income 23.7 49.5 73.2 Share of post-tax results of joint ventures and associates 3 16.9 - 16.9 Operating profit 451.8 49.5 501.3 Analysed as: Retail profit 3 503.7 49.5 553.2 Central costs (39.1) - (39.1) Amortisation of acquisition intangibles (0.3) - (0.3) Share of interest and taxation of joint ventures and associates (12.5) - (12.5) Finance income 24.8 - 24.8 Finance costs (75.6) - (75.6) Net finance costs 5 (50.8) - (50.8) Profit before taxation 401.0 49.5 450.5 Income tax expense 6 (119.4) 7.3 (112.1) Profit for the year 281.6 56.8 338.4 Attributable to: Equity shareholders of the Company 336.8 Minority interests 1.6 338.4 Earnings per share 7 Basic 14.4p Diluted 14.4p Adjusted (basic) 11.9p KINGFISHER PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED) For the half year ended 4 August 2007 Â£ millions Notes Half year ended Half year ended Year ended 4 August 2007 29 July 2006 3 February 2007 Actuarial gains on post employment benefits 7.0 62.3 95.3 Currency translation differences 43.4 (15.0) (70.9) Cash flow hedges Fair value losses (5.3) (4.8) (9.1) Losses/(gains) transferred to inventories 4.2 (1.1) 3.1 Tax on items recognised directly in equity (0.2) (17.0) (30.1) Net income/(expense) recognised directly in 49.1 24.4 (11.7) equity Profit for the period 158.6 167.1 338.4 Total recognised income for the period 207.7 191.5 326.7 Attributable to: Equity shareholders of the Company 11 208.5 192.9 325.1 Minority interests (0.8) (1.4) 1.6 207.7 191.5 326.7 KINGFISHER PLC CONSOLIDATED BALANCE SHEET (UNAUDITED) As at 4 August 2007 As at As at As at Â£ millions Notes 4 August 2007 29 July 2006 3 February 2007 Non-current assets Goodwill 2,552.5 2,555.3 2,551.5 Intangible assets 85.9 100.4 89.5 Property, plant and equipment 3,386.6 3,223.9 3,210.5 Investment property 29.9 14.2 29.4 Investments in joint ventures and associates 193.1 187.1 184.9 Deferred tax assets 23.8 - 30.2 Other receivables 36.2 45.3 46.6 6,308.0 6,126.2 6,142.6 Current assets Inventories 1,773.5 1,474.1 1,531.0 Trade and other receivables 497.2 560.4 505.4 Current tax assets 1.0 4.8 14.6 Other investments 38.3 10.2 28.4 Cash and cash equivalents 370.4 576.3 394.5 2,680.4 2,625.8 2,473.9 Total assets 8,988.4 8,752.0 8,616.5 Current liabilities Trade and other payables (2,318.5) (2,054.5) (1,958.3) Current tax liabilities (102.0) (62.2) (86.9) Borrowings (273.4) (249.8) (241.0) Provisions (42.8) (60.1) (56.3) (2,736.7) (2,426.6) (2,342.5) Non-current liabilities Other payables (50.8) (22.0) (50.8) Deferred tax liabilities (270.4) (217.7) (262.7) Borrowings (1,361.5) (1,480.5) (1,431.7) Provisions (58.5) (83.2) (53.2) Post employment benefits (32.8) (157.0) (54.6) (1,774.0) (1,960.4) (1,853.0) Total liabilities (4,510.7) (4,387.0) (4,195.5) Net assets 4,477.7 4,365.0 4,421.0 Equity Share capital 10 370.9 370.3 370.7 Share premium 10 2,187.4 2,180.9 2,185.2 Own shares held 10 (67.9) (90.4) (81.3) Reserves 11 1,981.1 1,897.6 1,939.9 Minority interests 6.2 6.6 6.5 Total equity 4,477.7 4,365.0 4,421.0 The interim financial report was approved by the Board of Directors on 19 September 2007 and signed on its behalf by: Gerry Murphy Duncan Tatton-Brown Group Chief Executive Group Finance Director KINGFISHER PLC CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) For the half year ended 4 August 2007 Â£ millions Notes Half year ended 4 Half year ended 29 Year ended August 2007 July 2006 3 February 2007 Net cash flows from operating activities 12 389.9 427.4 559.4 Cash flows from investing activities Purchase of subsidiary and business undertakings, (0.9) (0.7) (2.2) net of cash acquired Purchase of intangible assets (4.5) (12.2) (28.3) Disposal of intangible assets - - 0.1 Purchase of property, plant and equipment and (278.3) (253.6) (438.6) investment property Disposal of property, plant and equipment and 86.1 210.2 251.0 investment property Net purchase of other investments (7.9) (10.1) (29.3) Disposal of other investments - 0.4 0.4 Dividends received from joint ventures and 1.5 0.8 5.1 associates Net cash flows from investing activities (204.0) (65.2) (241.8) Cash flows from financing activities Interest received 9.6 6.6 18.5 Interest paid (31.8) (27.2) (70.3) Interest element of finance lease rental payments (2.8) (2.6) (5.8) Issue of Medium Term Notes and other fixed term - 252.4 252.4 debt Net receipt/(repayment) of bank loans 35.9 (49.6) (133.3) Capital element of finance lease rental payments (4.2) (4.2) (11.8) Issue of share capital to equity shareholders of 2.4 4.9 10.8 the Company Issue of share capital to minority interests 2.7 - 1.0 Disposal of own shares held 1.5 2.5 7.1 Dividends paid to equity shareholders of the (159.1) (158.5) (248.4) Company Dividends paid to minority interests (2.4) (0.8) (2.1) Net cash flows from financing activities (148.2) 23.5 (181.9) Net increase in cash and cash equivalents and bank 37.7 385.7 135.7 overdrafts Cash and cash equivalents and bank overdrafts at 244.8 113.7 113.7 beginning of period Exchange differences 1.1 2.6 (4.6) Cash and cash equivalents and bank overdrafts at 283.6 502.0 244.8 end of period KINGFISHER PLC NOTES TO THE INTERIM FINANCIAL REPORT (UNAUDITED) For the half year ended 4 August 2007 1. Basis of preparation The interim financial report for the half year ended 4 August 2007 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 Interim Financial Reporting as adopted by the European Union. This report should be read in conjunction with the annual financial statements for the year ended 3 February 2007, which have been prepared in accordance with IFRSs as adopted by the European Union. The half year results are unaudited and were approved by the Board of Directors on 19 September 2007. The results for the year ended 3 February 2007 are based on full audited accounts prepared in accordance with IFRSs as adopted by the European Union. These accounts were filed with the Registrar of Companies and contain a report of the auditors under section 240 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. Use of adjusted measures Kingfisher believes that retail profit, adjusted pre-tax profit, adjusted post-tax profit and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These measures are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items' and ' adjusted' are not defined terms under IFRS and may therefore not be comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, GAAP measurements of profit. The term 'adjusted' refers to the relevant measure being reported excluding exceptional items, financing fair value remeasurements and amortisation of acquisition intangibles. Retail profit is defined as operating profit before central costs (principally the costs of the Group's head office), exceptional items and the Group's share of interest and taxation of joint ventures and associates. The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group's underlying business performance. The principal items which will be included as exceptional items are: â€¢ non trading items included in operating profit such as profits and losses on the disposal or closure of subsidiaries, associates and investments which do not form part of the Group's trading activities; â€¢ profits and losses on the disposal of properties; and â€¢ the costs of significant restructuring and incremental acquisition integration costs. 2. Accounting policies The accounting policies adopted are consistent with those of the annual financial statements for the year ended 3 February 2007, as described in those financial statements. The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year ending 2 February 2008. â€¢ IFRS 7 Financial Instruments: Disclosures, IAS 1 Amendments to Capital Disclosures, and IFRS 4 Insurance Contracts revised implementation guidance. As this interim report contains only condensed financial statements, and as there are no material financial instrument related transactions in the period, full IFRS 7 disclosures are not required at this stage. The full IFRS 7 disclosures, including the sensitivity analysis to market risk and capital disclosures required by the amendment of IAS 1, will be given in the annual financial statements. â€¢ IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies. This interpretation is not relevant for the Group. â€¢ IFRIC 8 Scope of IFRS 2. This interpretation has not had any impact on the recognition of share-based payments in the Group. â€¢ IFRIC 9 Reassessment of Embedded Derivatives. This interpretation has not had any impact on the Group. â€¢ IFRIC 10 Interim Financial Reporting and Impairment. This interpretation has not had any impact on the Group. 3. Segmental analysis Half year ended 4 August 2007 Â£ millions United France Poland Rest of Asia Total Kingdom Europe External revenue 2,321.0 1,614.4 330.8 281.8 227.1 4,775.1 Retail profit 85.0 104.7 45.5 15.9 (11.0) 240.1 Exceptional items before central costs 39.8 3.2 (0.1) - (10.7) 32.2 Amortisation of acquisition intangibles - - - - (0.1) (0.1) Less: Share of operating profit of joint ventures and - (0.5) - (7.1) (2.2) (9.8) associates Segment result before joint ventures and associates 124.8 107.4 45.4 8.8 (24.0) 262.4 Share of post-tax results of joint ventures and - 0.3 - 6.6 1.5 8.4 associates Segment result 124.8 107.7 45.4 15.4 (22.5) 270.8 Central costs (13.7) Operating profit 257.1 Net finance costs (27.7) Profit before taxation 229.4 Income tax expense (70.8) Profit for the period 158.6 Half year ended 29 July 2006 Â£ millions United France Poland Rest of Asia Total Kingdom Europe External revenue 2,169.7 1,497.0 230.7 242.7 209.0 4,349.1 Retail profit 90.5 95.5 27.8 24.3 (6.6) 231.5 Exceptional items before central costs 43.3 0.3 (1.6) 0.1 (0.1) 42.0 Amortisation of acquisition intangibles - - - - (0.1) (0.1) Less: Share of operating profit of joint ventures and - (0.5) - (8.2) (2.9) (11.6) associates Segment result before joint ventures and associates 133.8 95.3 26.2 16.2 (9.7) 261.8 Share of post-tax results of joint ventures and - 0.3 - 3.4 2.1 5.8 associates Segment result 133.8 95.6 26.2 19.6 (7.6) 267.6 Central costs (18.2) Operating profit 249.4 Net finance costs (26.3) Profit before taxation 223.1 Income tax expense (56.0) Profit for the period 167.1 Year ended 3 February 2007 Â£ millions United France Poland Rest of Asia Total Kingdom Europe External revenue 4,261.5 2,955.2 507.9 494.6 456.7 8,675.9 Retail profit 182.6 206.3 58.4 52.0 4.4 503.7 Exceptional items before central costs 50.5 (1.0) (0.5) - 0.5 49.5 Amortisation of acquisition intangibles - - - - (0.3) (0.3) Less: Share of operating profit of joint ventures and - (0.8) - (23.2) (5.4) (29.4) associates Segment result before joint ventures and associates 233.1 204.5 57.9 28.8 (0.8) 523.5 Share of post-tax results of joint ventures and - 0.5 - 12.5 3.9 16.9 associates Segment result 233.1 205.0 57.9 41.3 3.1 540.4 Central costs (39.1) Operating profit 501.3 Net finance costs (50.8) Profit before taxation 450.5 Income tax expense (112.1) Profit for the year 338.4 The Group's primary reporting segments are geographic, with the Group operating in four main geographical areas, being the UK, France, Rest of Europe and Asia. The 'Rest of Europe' segment consists of B&Q Ireland, Castorama Poland, Castorama Italy, Castorama Russia, Brico Depot Spain, Koctas and Hornbach. Poland has been shown separately as it meets the reportable segment criteria as prescribed by IAS 14 Segment Reporting. The 'Asia' segment consists of B&Q China, B&Q Taiwan and B&Q Home in South Korea. The Group's revenues, although not highly seasonal in nature, do increase over the Easter period and during the summer months leading to slightly higher revenues being recognised in the first half of the year. 4. Exceptional items Half year ended Half year ended Year ended Â£ millions 4 August 2007 28 January 2006 3 February 2007 Included within administrative expenses Loss on closure of B&Q Home in South Korea (10.7) - - Included within other income Profit on disposal of properties 42.9 41.6 49.1 Profit on disposal of available for sale financial assets - 0.4 0.4 Recovery of loan receivable previously written off 5.0 - - 47.9 42.0 49.5 Exceptional items 37.2 42.0 49.5 Closure costs of Â£10.7m have been expensed in relation to the closure of B&Q Home in South Korea. The Group has recorded Â£42.9m exceptional profit on disposal of properties in the current period, of which Â£40.0 million arose in connection with the sale and leaseback of the Worksop Distribution Centre by B&Q UK. The Group has recognised Â£5.0 million income in relation to the repayment of a loan made to ProMarkt which had previously been written off as an exceptional item. 5. Net finance costs Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 Bank and other interest receivable 12.4 7.8 18.5 Net interest return on defined benefit schemes 6.5 2.8 6.3 Finance income 18.9 10.6 24.8 Bank and other interest payable (46.7) (35.1) (74.1) Less amounts capitalised in the cost of qualifying assets 1.3 0.7 1.2 (45.4) (34.4) (72.9) Finance lease charges (2.8) (2.6) (5.8) Financing fair value remeasurements 2.7 2.7 4.7 Unwinding of discount on provisions (1.1) (2.6) (1.6) Finance costs (46.6) (36.9) (75.6) Net finance costs (27.7) (26.3) (50.8) 6. Income tax expense Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 UK corporation tax Current tax on profits for the period 14.5 16.9 30.2 Adjustments in respect of prior years 0.2 - (0.3) 14.7 16.9 29.9 Overseas tax Current tax on profits for the period 43.9 42.9 80.7 Adjustments in respect of prior years 0.2 (0.1) (2.3) 44.1 42.8 78.4 Deferred tax Current period 16.9 (3.7) 12.7 Adjustments in respect of prior years (0.4) - (8.9) Adjustments in respect of changes in tax rates (4.5) - - 12.0 (3.7) 3.8 Income tax expense 70.8 56.0 112.1 The effective rate of tax on profit before exceptional items and excluding tax adjustments in respect of prior years and changes in tax rates is 32.0% (2006: 34.5%), representing the best estimate of the effective rate for the full financial year. The effective tax rate for the year ended 3 February 2007 was 32.0%. The tax charge on exceptional items for the current period is Â£13.8m (2006: Â£6.4m credit). The tax credit on exceptional items for the year ended 3 February 2007 was Â£7.3m, of which Â£2.7m related to adjustments in respect of prior years. 7. Earnings per share Half year ended Half year ended Year ended Pence 4 August 2007 29 July 2006 3 February 2007 Basic earnings per share 6.8 7.2 14.4 Effect of non-recurring costs Exceptional items (1.6) (1.8) (2.1) Tax on exceptional items 0.6 (0.2) (0.3) Financing fair value remeasurements (0.1) (0.1) (0.2) Tax on financing fair value remeasurements - - 0.1 Basic - adjusted earnings per share 5.7 5.1 11.9 Diluted earnings per share 6.8 7.2 14.4 Effect of non-recurring costs Exceptional items (1.6) (1.8) (2.2) Tax on exceptional items 0.6 (0.2) (0.3) Financing fair value remeasurements (0.1) (0.1) (0.2) Tax on financing fair value remeasurements - - 0.1 Diluted - adjusted earnings per share 5.7 5.1 11.8 The calculation of basic and diluted earnings per share is based on the profit for the period attributable to equity shareholders of the Company of Â£159.6 million (2006: Â£168.5 million). For the year ended 3 February 2007, the profit for the year attributable to equity shareholders of the Company was Â£336.8 million. The weighted average number of shares in issue during the period, excluding those held in the Employee Share Ownership Plan Trust (ESOP), was 2,340.7 million (2006: 2,331.8 million). The diluted weighted average number of shares in issue during the period was 2,354.3 million (2006: 2,338.9 million). For the year ended 3 February 2007, the weighted average number of shares in issue was 2,333.0 million and the diluted weighted average number of shares in issue was 2,343.8 million. 8. Dividends Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 Dividends to equity shareholders of the Company Final dividend for the year ended 28 January 2006 of 6.8p - 158.5 158.5 per share Interim dividend for the year ended 3 February 2007 of 3.85p - - 89.9 per share Final dividend for the year ended 3 February 2007 of 6.8p 159.1 - - per share 159.1 158.5 248.4 The proposed interim dividend for the half year ended 4 August 2007 is 3.85p per share, amounting to Â£90.9m. 9. Capital expenditure In the period, there were additions to intangible assets of Â£4.7m (2006: Â£12.2m). In the period, there were additions to property, plant and equipment and investment property of Â£279.9m (2006: Â£222.1m). In the period there were disposals of, property, plant and equipment and investment property of Â£41.9m (2006: Â£164.3m). Capital commitments contracted but not provided for by the Group amounted to Â£35.1m. 10. Share capital, share premium and own shares held Number of Share Share Own shares ordinary shares capital premium held millions Â£ millions Â£ millions Â£ millions At 4 February 2007 2,359.0 370.7 2,185.2 (81.3) Shares issued under share schemes 1.1 0.2 2.2 13.4 At 4 August 2007 2,360.1 370.9 2,187.4 (67.9) At 29 January 2006 2,353.3 369.8 2,175.3 (95.1) Shares issued under share schemes 2.9 0.5 5.6 4.7 At 29 July 2006 2,356.2 370.3 2,180.9 (90.4) 11. Reserves Cash flow Translation Other Retained Total hedge reserve reserves earnings reserve Â£ millions At 4 February 2007 (3.0) 21.2 159.0 1,762.7 1,939.9 Actuarial gains on post employment benefits - - - 7.0 7.0 Currency translation differences - 43.2 - - 43.2 Cash flow hedges - fair value losses (5.3) - - - (5.3) Cash flow hedges - losses transferred to inventories 4.2 - - - 4.2 Tax on items recognised directly in equity 0.2 - - (0.4) (0.2) Net income recognised directly in equity (0.9) 43.2 - 6.6 48.9 Profit for the period - - - 159.6 159.6 Total recognised income for the period (0.9) 43.2 - 166.2 208.5 Share-based compensation charge - - - 3.7 3.7 Own shares disposed - - - (11.9) (11.9) Dividends - - - (159.1) (159.1) At 4 August 2007 (3.9) 64.4 159.0 1,761.6 1,981.1 At 29 January 2006 1.2 92.1 159.0 1,608.7 1,861.0 Actuarial gains on post employment benefits - - - 62.3 62.3 Currency translation differences - (15.0) - - (15.0) Cash flow hedges - fair value losses (4.8) - - - (4.8) Cash flow hedges - gains transferred to inventories (1.1) - - - (1.1) Tax on items recognised directly in equity 1.8 - - (18.8) (17.0) Net income recognised directly in equity (4.1) (15.0) - 43.5 24.4 Profit for the period - - - 168.5 168.5 Total recognised income for the period (4.1) (15.0) - 212.0 192.9 Share-based compensation charge - - - 5.5 5.5 Share-based compensation - shares awarded - - - (0.8) (0.8) Own shares disposed - - - (2.5) (2.5) Dividends - - - (158.5) (158.5) At 29 July 2006 (2.9) 77.1 159.0 1,664.4 1,897.6 12. Cash flows from operating activities Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 Operating profit 257.1 249.4 501.3 Depreciation and amortisation 117.0 95.3 207.0 Impairment losses - - 1.3 Share-based compensation charge 3.7 5.5 9.0 Share of post-tax results of joint ventures and associates (8.4) (5.8) (16.9) Profit on disposal of property, plant and equipment (38.5) (37.6) (43.9) Loss on disposal of intangible assets - - 5.7 Profit on disposal of available for sale financial assets - (0.4) (0.4) Increase in inventories (222.3) (123.1) (215.0) Decrease in trade and other receivables 38.6 3.7 44.0 Increase in trade and other payables 290.8 331.4 295.1 Decrease in working capital 107.1 212.0 124.1 Decrease in post employment benefits (8.9) (17.4) (82.5) Decrease in provisions (9.2) (14.7) (47.0) Cash generated by operations 419.9 486.3 657.7 Income tax paid (30.0) (58.9) (98.3) Net cash flows from operating activities 389.9 427.4 559.4 13. Net debt Net debt comprises the Group's borrowings, interest rate and cross currency swaps that hedge those borrowings (excluding accrued interest), bank overdrafts and obligations under finance leases, less cash and cash equivalents and current other investments. Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 Cash and cash equivalents 370.4 576.3 394.5 Current other investments 38.3 10.2 28.4 Bank overdrafts (86.8) (74.3) (149.7) Bank loans (183.1) (233.5) (146.8) Medium Term Notes and other fixed term debt (1,295.7) (1,350.7) (1,306.6) Interest rate and cross currency swaps (excluding accrued (63.7) (9.9) (44.0) interest) Finance leases (69.3) (71.8) (69.6) Net debt (1,289.9) (1,153.7) (1,293.8) Half year ended Half year ended Year ended Â£ millions 4 August 2007 29 July 2006 3 February 2007 Net debt at beginning of period (1,293.8) (1,355.2) (1,355.2) Net increase in cash and cash equivalents and bank 37.7 385.7 135.7 overdrafts Net increase in current other investments 8.3 10.1 29.3 Amortisation of issue costs of debt (0.4) (0.4) (0.9) Net increase in debt and lease financing (35.0) (198.2) (107.3) Exchange differences and fair value adjustments on (6.7) 4.3 4.6 financial instruments Net debt at end of period (1,289.9) (1,153.7) (1,293.8) During the half year ended 29 July 2006, the Group issued $466.5 million (Â£252.4 million) of fixed term debt through the US Private Placement market. The proceeds were swapped to Sterling at floating interest rates. 14. Acquisitions There were no significant acquisitions in the current or prior half year periods. 15. Contingent liabilities Kingfisher plc has an obligation to provide a bank guarantee for Â£50.0m to the liquidators of Kingfisher International France Limited in the event that Kingfisher plc's credit rating falls below 'BBB'. The obligation arises from an indemnity provided in June 2003 as a result of the demerger of Kesa Electricals. In addition, the Group has arranged for certain bank guarantees to be provided to third parties in the ordinary course of business. 16. Related party transactions The Group's significant related parties are its associates and joint ventures as disclosed in the Kingfisher plc Annual Report for 3 February 2007. There were no material related party transactions in the period or prior half year period. STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8. The Directors of Kingfisher plc are listed in the Kingfisher plc Annual Report for 3 February 2007. There have been no changes in the period. By order of the Board Gerry Murphy Group Chief Executive 19 September 2007 Duncan Tatton-Brown Group Finance Director 19 September 2007 INDEPENDENT REVIEW REPORT TO KINGFISHER PLC Introduction We have been instructed by the Company to review the financial information for the half year ended 4 August 2007 which comprises the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement and the related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of Kingfisher plc are prepared in accordance with IFRSs as adopted by the European Union. The financial information included in this interim financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. 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 management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the disclosed accounting policies have been applied. 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 and therefore provides a lower level of assurance. 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 Disclosure and Transparency 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 half year ended 4 August 2007. PricewaterhouseCoopers LLP Chartered Accountants London 19 September 2007 SHAREHOLDER INFORMATION Copies of the results will be sent to shareholders on 10 October 2007 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 3 October 2007 Ex-dividend date for interim dividend 5 October 2007 Record date for interim dividend 26 October 2007 Final date for receipt of Drip Mandate Forms by Registrars 16 November 2007 Date for payment of interim cash dividend 23 November 2007 Trade settlement date for the interim Drip dividend If shareholders wish to elect for the Dividend Reinvestment Plan (Drip), and have not already done so, for the forthcoming interim dividend, a letter or Drip Mandate Form must be received by Kingfisher's Registrars, Computershare Investor Services PLC, by 26 October 2007. Copies of the Terms and Conditions of the Drip can be obtained from Kingfisher's Registrars at the address below, by calling 0870 702 0129 or online at www.kingfisher.com. Computershare Investor Services PLC PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH This information is provided by RNS The company news service from the London Stock Exchange

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