Annual Report and Financial Statements

Annual Report and Financial Statements 2010 and new LTIP

Kesa Electricals plc today announces that pursuant to Listing Rule 9.6.1 and DTR 6.3.5 (3), copies of the following documents have been submitted to the UK Listing AuthorityDocument Viewing Facility, which is situated at The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS.

- Notice of Annual General Meeting 2010

- Annual report and Financial Statements 2010

- Proxy form

The Company has also published the documents on its website, www.kesaelectricals.com. 

The Company will hold its 2010 Annual General Meeting at 11.00 am on Thursday 16th September 2010 at the Novotel Hotel, 100-110 Euston Road, London, NW1 2AJ.

LTIP

As announced at the results presentation in June, the Notice of Annual General Meeting contains a resolution for the replacement of the current long term incentive arrangements with a new plan which is intended to be used to incentivise group senior management and senior business unit managers.

In summary, the Awards under the proposed scheme will normally be granted on an annual basis shortly after the full year results announcement in the form of conditional shares or nil-cost options over shares with a nominal acquisition/exercise price.

The performance period will be the three consecutive financial years starting with the year in which the date of grant falls. It is proposed that 70 per cent of the shares vesting will be based on annual adjusted earnings per share ("EPS") targets, with one third of the award available in each year, subject to the following conditions:-

(1) the achievement of a compound annual growth rate EPS target for each year in excess of 10 per cent, up to a maximum award at 30 per cent. growth; and

(2) the achievement of an underpin requirement of 10 per cent. EPS compound average growth rate at the end of 'the three year period'.

This means that while one third of the 70 per cent element may vest each year, if that years' target is achieved, it would only be released to the scheme participant if the three year cumulative 10 per cent. EPS growth target is achieved.

It is proposed that the first grant will have a 20 per cent growth target as both the threshold and the cumulative underpin, with vesting calculated on a straight line basis between the threshold and the 30 per cent maximum.

The remaining 30 per cent of the award will vest based on an annual Free Operating Cash Flow ("FCF") target, with one third of the award available in each year, subject to the following conditions:

(1) the achievement of the cumulative FCF target for each year; and

(2) the achievement of the cumulative FCF target for the three years, being the sum of the three targets in (1) above.

The concept of a cumulative underpin prevents a maximum achievement in year one, for example, resulting in shares vesting even if performance in years two and three was poor.

Each year the Remuneration Committee will review, within the above proposed authority, the performance targets and underpins for the new award cycle to ensure they are appropriately stretching and achievable.

The Remuneration Committee may change the targets if an event occurs which makes it fair and reasonable to make a change, provided the new target is not materially easier or more difficult to satisfy than the original target.

The Remuneration Report will disclose the extent to which each annual target has been met by the Executive Directors and the number of shares, subject to achieving the three year underpin, which will vest.

Ends

Kesa Electricals will issue an Interim Management Statement on 16 September 2010 for the first quarter trading period.

Enquiries

Press:

Kesa Electricals plc

Annabel Donaldson UK +44 (0) 20 7269 1400

Charles Watenphul +44 (0) 20 7251 3801