21st Mar 2007 07:02
Kesa Electricals plc21 March 2007 21 March 2007 Preliminary Results for the year ended 31 January 2007 Financial Highlights • Group revenue increased by 9.8% to £4,500.9 million during the period, up 7.8% on a like for like basis • Group retail profit(1) increased by 9.7% to £180.9 million. • Profit before tax was up by 15.4% to £165.4 million • Cash generated from operations was £307.9 million, enabling net debt to be reduced from £166.3 million to £75.4 million. • Basic earnings per share were 20.7 pence, up 16.3%. • The Board recommends a final dividend of 10.05 pence per share, making a total dividend for the year of 13.3 pence per share, an increase of 9.9%. (1)Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. Jean-Noel Labroue, Chief Executive, commented: "I am very pleased that all our businesses delivered strong revenue performancesin positive market conditions, helped by the new technology product cycle,particularly flat screen televisions, and the market for white goods returningto small growth. All our electrical businesses gained market share. "Product and margin mix management and productivity gains helped us make goodprogress in retail profit. "For 2007 we expect the same sales trends to continue, but not at the same rateas last year. We will continue to focus on cost control and productivity tooffset the negative mix effect on margin. "The current success of all our businesses gives us the confidence to accelerateour investments with particular emphasis on Darty's new services, Comet'strading mezzanine floor development programme and developing our three newbusinesses in Italy, Switzerland and Turkey. Whilst this will impact this year'searnings growth and cash flow, it will secure the future success of the Group." David Newlands, Chairman, commented: "This is a very strong performance for the Group with all our businessesdelivering pleasing results. "The cash generation has again increased and this enables the Board to recommenda final dividend of 10.05 pence per share, an increase of 9.8 per cent." ENDS Enquiries Press:Kesa Electricals plcAnnabel Donaldson +44 (0) 20 7269 1400Guy Lavaud +33 (0) 1 43 18 52 00 FinsburyRollo Head +44 (0) 20 7251 3801 Euro RSCGLaurent Dondey +33 (0) 1 58 47 95 17 Analysts:Kesa Electricals plcSimon Herrick +44 (0) 20 7269 1400Simon Ward +44 (0) 20 7269 1400 There will be a presentation today to analysts and institutions at 9.30am at TheConference Centre, UBS, 2 Finsbury Avenue, London EC2 This announcement is available on the KESA Electricals website:www.kesaelectricals.com. A live webcast of the presentation to analysts andinstitutions will also be available on the site at 9.30am, and recorded foraccess later in the day. Certain statements made in this announcement are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual results to differ materiallyfrom any expected future results in forward looking statements GROUP OVERVIEW These are Kesa Electricals plc's financial results for the year ended 31 January2007. Results as reported in sterling +--------+---------+---------+---------+-----------+-----------+----------+| | Revenue | Revenue | Change | Retail | Retail | Change || | 2006/07 | 2005/06 | | profit(1) | profit(1) | || | | | | 2006/07 | 2005/06 | |+--------+---------+---------+---------+-----------+-----------+----------+| | £m | £m | | £m | £m | |+--------+---------+---------+---------+-----------+-----------+----------+|Darty | 1733.9 | 1597.4 | 8.5% | 114.2 | 109.9 | 3.9% |+--------+---------+---------+---------+-----------+-----------+----------+|Comet | 1676.5 | 1529.8 | 9.6% | 46.1 | 38.3 | 20.4% |+--------+---------+---------+---------+-----------+-----------+----------+|BUT | 595.7 | 578.0 | 3.1% | 36.1 | 34.2 | 5.6% |+--------+---------+---------+---------+-----------+-----------+----------+|Other* | 494.8 | 394.8 | 25.3% | (2.4) | (5.4) | - |+--------+---------+---------+---------+-----------+-----------+----------+|Central | - | - | - | (13.1) | (12.1) | - |+--------+---------+---------+---------+-----------+-----------+----------+| Total | 4500.9 | 4100.0 | 9.8% | 180.9 | 164.9 | 9.7% |+--------+---------+---------+---------+-----------+-----------+----------+ •/£ exchange rates of 1.4712 (2006/07) and 1.4645 (2005/06) *Includes BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and DartyTurkey. Results as reported in local currency +--------+-----------+---------+---------+-----------+-----------+----------+| | Revenue | Revenue | Change | Retail | Retail | Change || | 2006/07 | | | profit(1) | profit(1) | || | | | | 2006/07 | 2005/06 | |+--------+-----------+---------+---------+-----------+-----------+----------+| | m | 2005/06 | | M | M | |+--------+-----------+---------+---------+-----------+-----------+----------+| | | M | | | | |+--------+-----------+---------+---------+-----------+-----------+----------+|Darty | €2550.9 |€2339.4 | 9.0% | €168.0 | €160.9 | 4.4% |+--------+-----------+---------+---------+-----------+-----------+----------+|Comet | £1676.5 |£1529.8 | 9.6% | £46.1 | £38.3 | 20.4% |+--------+-----------+---------+---------+-----------+-----------+----------+|BUT | €876.4 | €846.5 | 3.5% | €53.1 | €50.1 | 6.0% |+--------+-----------+---------+---------+-----------+-----------+----------+|Other* | €727.9 | €578.2 | 25.9% | •(3.5) | •(7.9) | - |+--------+-----------+---------+---------+-----------+-----------+----------+ •/£ exchange rates of 1.4712 (2006/07) and 1.4645 (2005/06) *Includes BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and DartyTurkey. Financial Highlights Group revenue was £4,500.9 million, up 9.8 per cent on last year (up 10.2 percent in constant currency and 7.8 per cent on a like-for-like basis). Groupretail profit(1) was £180.9 million, an increase of 9.7 per cent on last year. Adjusted profit before tax excluding the share of joint venture and associatesinterest and taxation, demerger award plan charges and profits/losses ondisposal of property plant and equipment grew 13.6 per cent to £168.5 million.Reported profit before tax increased by 15.4 per cent to £165.4 million. (1) Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. The net finance costs amounted to £12.4 million against £16.6 million last year.The tax charge was £56.0 million which, together with the share of joint ventureand associates tax of £2.7 million, represented an effective tax rate of 34.9per cent (34.9 per cent in the previous year). Total operating profit included net premiums on exiting leased premises of £6.4million (2006: £0.1 million), including the receipt by Comet of a net £3.5million on exiting the store at Fosse Park, Leicester. Cash generated from operations was £307.9 million, enabling net debt to bereduced from £166.3 million last year to £75.4 million. Basic earnings per share grew by 16.3 per cent to 20.7 pence. The Board is recommending a final dividend of 10.05 pence per share making atotal dividend for the year of 13.3 pence per share, an increase of 9.9 percent, and covered 1.6 times by earnings. Trading Highlights In positive market conditions, helped by the strength of the TV replacementcycle and increased demand for new technologies, our businesses delivered goodrevenue growth and market share gains. The negative mix effect on margin wasmore than offset by productivity gains. Total revenue growth at Darty was up 9.0 per cent in local currency (up 7.8 percent on a like-for-like basis). During the year Darty successfully introducedits 'paid for' services and launched Darty Box, its own triple play proposition.Web generated sales grew 81 per cent. In the UK, Comet's revenue grew by 9.6 per cent, an increase of 8.8 per cent ona like for like basis. Comet continued to improve the day to day execution ofits repositioning programme with particular emphasis on its property portfolio.During the year four stores were refurbished to include a trading mezzaninefloor. The launch of the new 'click and collect' initiative helped web generatedsales grow by 18 per cent. BUT's total revenue grew by 3.5 per cent in local currency. Total store revenuewas up 3.9 percent, up 1.2 per cent on a like for like basis. Revenue at thein-house wholesale business grew by 2.4 per cent in local currency. Thecontinuation of BUT's relay programme for its small to mid sized stores and therepositioning of its furniture offer resulted in improved performance in thesecond half. Total revenue at the other businesses, BCC, Vanden Borre, Datart, Darty ItalyDarty Switzerland and Darty Turkey, grew by 25.9 per cent in local currency, up10.6 per cent on a like for like basis. This very good performance was helped bycontinuing market consolidation in Holland and Belgium. Retail profit in theestablished businesses, BCC, Vanden Borre and Datart increased by 97.6 per centto €16.2 million. Start up losses for Darty Italy, Darty Switzerland and DartyTurkey totalled €19.7 million. Outlook Overall trading since the year-end has remained positive and we expect thistrend to continue, although at a lower rate than last year. We anticipate that sales will again be led by the strong new technology productcycle and that the small growth of the white goods market will continue. We will strive to maintain margins by focussing on cost control and productivitygains in logistics. We will drive cash generation and accelerate investment inour existing businesses, with particular emphasis on Darty's new services,Comet's mezzanine floor opening programme and developing our three newbusinesses in Italy, Switzerland and Turkey. Whilst this will have a short termimpact on earnings growth and cash flow, it will provide additional growth forthe Group in the future. DARTY +-----------+---------+------------+--------+---------+----------+---------+| | 2006/07 | 2005/06 | Change | 2006/07 | 2005/06 | Change |+-----------+---------+------------+--------+---------+----------+---------+| | £m | £m | | •m | •m | |+-----------+---------+------------+--------+---------+----------+---------+|Revenue | 1733.9 | 1597.4 | 8.5% | 2550.9 | 2339.4 | 9.0% |+-----------+---------+------------+--------+---------+----------+---------+|Retail | 120.3 | 109.9 | 9.5% | 177.0 | 160.9 | 10.0% ||profit(1) | | | | | | |+-----------+---------+------------+--------+---------+----------+---------+|Darty Box | (6.1) | - | - | (9.0) | - | - |+-----------+---------+------------+--------+---------+----------+---------+| Total | 114.2 | 109.9 | 3.9% | 168.0 | 160.9 | 4.4% |+-----------+---------+------------+--------+---------+----------+---------+| | | | | | | |+-----------+---------+------------+--------+---------+----------+---------+|No of | 209* | 206 | +3 | | | ||stores | | | | | | |+-----------+---------+------------+--------+---------+----------+---------+|Sales space| 274.4* | 269.0 | 2.0% | | | |+-----------+---------+------------+--------+---------+----------+---------+|(000s sq m)| | | | | | |+-----------+---------+------------+--------+---------+----------+---------+ *as at 31 January 2007 (1) Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. Total revenue grew by 9.0 per cent in local currency with like for like salesincreasing by 7.8 per cent. This was helped by strong sales of new technologies,triggered by the TV replacement market and the increased demand for laptops inthe back to school period in September. Sales of white goods returned to year onyear growth. The negative impact on the margin mix caused by the strong sales in newtechnologies was offset by productivity gains mostly achieved through therationalisation of the warehousing and after sales service operations. During the first half of the year Darty launched its 'new paid' for servicesoffer including four installation services and five training services, all ofwhich continue to show good levels of customer interest. Darty Box, Darty's own triple play proposition, was successfully launched onschedule in Paris at the end of October and rolled out nationwide by the end ofNovember. Whilst it is early days with limited trading history, subscribers atthe end of January totalled 28,000, with a target of an additional 140,000subscribers by the end of 2007. Customers are satisfied with the quality of theassociated customer service. Start-up losses were €9.0 million in 2006/07 andare expected to be €24 million in total. Capital expenditure was €20 millionlast year and is forecast to be €25 million next year. Darty's store modernisation programme continued on schedule with the opening of15 new format stores. Of the 15, three were new stores, five were relocatedstores and 7 were refurbished/extended stores. During 2007, Darty will open afurther 26 new format stores of which seven will be new stores, five will berelocated stores and 14 will be refurbished/extended stores. By the end of 2007there will be 83 new format stores in total. Web generated sales delivered a year on year sales uplift of 81 per cent to 3per cent of total revenue. Darty will further enhance its service proposition in 2007. A 'click andcollect' service will be launched and a trial of a new kitchen offer willcommence in two stores. COMET +---------------+--------------+--------------+--------------+| | 2006/07 | 2005/06 | Change |+---------------+--------------+--------------+--------------+| | £m | £m | |+---------------+--------------+--------------+--------------+|Revenue | 1676.5 | 1529.8 | 9.6% |+---------------+--------------+--------------+--------------+|Retail profit | | | |(1) | 46.1 | 38.3 | 20.4% |+---------------+--------------+--------------+--------------+| | | | |+---------------+--------------+--------------+--------------+|No of stores | 248* | 249 | -1 |+---------------+--------------+--------------+--------------+|Sales space | 258.9* | 258.0 | 0.3% |+---------------+--------------+--------------+--------------+|(000s sq m) | | | |+---------------+--------------+--------------+--------------+ * as at 31 January 2007 (1) Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. Comet delivered total revenue of £1,676.5 million, up 9.6 per cent on theprevious year and up 8.8 per cent on a like for like basis. Sales were driven bythe very strong demand for flat screen televisions and multimedia, particularlylaptops. Sales of white goods increased ahead of the growth in the market. This strong performance was driven by the improved progress in day to dayexecution of Comet's re-positioning programme. Increased product training forall store staff and the move towards a better offer of higher quartile productsled to improved conversion rates and higher average selling price in all majorproduct categories. The after sales operations also improved with the introduction of customerservice training for home delivery staff and further integration of the homedelivery and after sales service centres. The store development programme continued with the opening of two new stores,two relocations and six refurbishments, four of which now trade with a mezzaninefloor. During the year, three stores were closed**. The introduction of mezzanine trading floors adds selling space at attractiveincremental cost, limiting the impact of rising rents and rates and Comet willfocus on this for the future. Currently, the stores trading with a mezzaninefloor have seen an average sales uplift of 50 per cent post the initialre-opening period. Of the 23 new, refurbished and relocated stores to becompleted during 2007, 10 will include a trading mezzanine floor. A further 30are planned for the subsequent three years. **Comet received a net lease premium of £3.5 million on the closure of the FossePark store During the year, Comet introduced its new 'click and collect' initiative whichhelped web generated sales grow by 18 per cent to 7.5 per cent of total revenue. In the second half of the year Comet trialled a multi-media support service forhome and small business users under the brand 'IT Therapy' that was extended toa total of 34 stores. The trial confirmed the customer demand for such servicesand accordingly Comet will launch an enhanced and rebranded nationwide service'Comet on Call' in the first half of 2007. BUT +-----------+---------+----------+---------+-----------+---------+---------+| | 2006/07 | 2005/06 | Change | 2006/07 | 2005/06 | Change |+-----------+---------+----------+---------+-----------+---------+---------+| | £m | £m | | •m | •m | |+-----------+---------+----------+---------+-----------+---------+---------+|Revenue | 595.7 | 578.0 | 3.1% | 876.4 | 846.5 | 3.5% |+-----------+---------+----------+---------+-----------+---------+---------+|Retail | 36.1 | 34.2 | 5.6% | 53.1 | 50.1 | 6.0% ||profit(1) | | | | | | |+-----------+---------+----------+---------+-----------+---------+---------+| | | | | | | |+-----------+---------+----------+---------+-----------+---------+---------+|No of | 107* | 106 | +1 | | | ||stores | | | | | | |+-----------+---------+----------+---------+-----------+---------+---------+|Sales space| 348.1* | 345.5 | 0.8% | | | |+-----------+---------+----------+---------+-----------+---------+---------+|(000s sq m)| | | | | | |+-----------+---------+----------+---------+-----------+---------+---------+ *at 31 January 2007 (1) Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. In a French furniture market that returned to growth, total revenue at BUT grewby 3.5 per cent in local currency. Total store revenue grew by 3.9 per cent, up1.2 per cent on a like for like basis. Revenue at the in-house wholesalebusiness grew by 2.4 per cent. Following an improved performance in the secondhalf, BUT's retail profit increased by 6.0 per cent to €53.1 million. BUT's store relay programme for its small to mid sized stores progressed onschedule. These relayed stores continue to outperform the chain. During 2006,ten relays and one relocation were completed, plus one new store was opened. Bythe end of 2007 a further 10 relays are planned with three closures. The modernisation of BUT's furniture offer in kitchens also progressed well andon schedule. The re-designed ranges, including built-in electrical goods andrelated services, are now on offer in 30 stores where kitchen sales are showingan uplift of 20 per cent. The offer will be available across the chain withinthe next two years. A new television advertising programme focussing on thisproposition was launched in early March 2007. BUT maintains its medium termtarget to increase kitchen sales from 10 per cent of total furniture sales to 20per cent. OTHER BUSINESSES +----------+---------+----------+---------+-----------+----------+---------+| | 2006/07 | 2005/06 | Change | Local | Local | Change || | | | | Currency | Currency | |+----------+---------+----------+---------+-----------+----------+---------+| | £m | £m | | 2006/07 | 2005/06 | |+----------+---------+----------+---------+-----------+----------+---------+| | | | | •m | •m | |+----------+---------+----------+---------+-----------+----------+---------+| | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+|Revenue | 494.8 | 394.8 | 25.3% | 727.9 | 578.2 | 25.9% |+----------+---------+----------+---------+-----------+----------+---------+|Retail | 11.0 | 5.6 | 96.4% | 16.2 | 8.2 | 97.6% ||profit(1) | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+|Start up | (13.4) | (11.0) | (21.8)%| (19.7) | (16.1) | - ||losses | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+| Total | (2.4) | (5.4) | 55.6% | (3.5) | (7.9) | - |+----------+---------+----------+---------+-----------+----------+---------+| | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+|No of | 141* | 129 | +12 | | | ||stores | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+|Sales | 162.5* | 145.5 | 11.7% | | | ||space | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+|(000s sq | | | | | | ||m) | | | | | | |+----------+---------+----------+---------+-----------+----------+---------+ *at 31 January 2007 (1) Retail profit equates to the total operating profit before the effects of the Demerger Award Plan charge, profits/losses on disposal of property, plant and equipment and the share of joint venture and associates interest and taxation. Total revenue for all our Other businesses** grew by 25.9 per cent in localcurrency, 10.6 per cent on a like-for-like basis. The established businesses,BCC, Vanden Borre and Datart, are all profitable and in total increased retailprofit by 97.6 per cent to €16.2 million. Start up losses for Darty Italy, DartySwitzerland and Darty Turkey totalled €19.7 million. All three of our established businesses made significant market share gains.Overall sales growth was helped by very strong revenue performances at BCC andVanden Borre demonstrating the success of our specialist business model inconsolidating markets. Investment in the store modernisation programme for thesebusinesses continued with the opening of 11 new stores, three relocated storesand three refurbished/extended stores, while four stores were closed. During thenext year, 14 new stores will be opened and seven refurbishments completed whileone store will close. Stores at Darty Italy continued to receive positive customer feedback andsatisfactory sales performance, although gross margin still remains belowinitial expectations. Three former family owned stores were successfullyintegrated towards the end of 2006, bringing the total number of stores to ninein the Milan and Turin region. In 2007 the focus will be on margin improvementand the addition of a further four stores. **BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland and Darty Turkey Darty Switzerland also continued to receive positive customer feedback anddelivered a high conversion rate and average selling price throughout the year.With three stores currently trading, a further two will open in 2007. The first store at Darty Turkey opened ahead of schedule, last December, and isalready showing very encouraging levels of customer traffic. Four further storeswill open by the end of this year, all in the Istanbul area. The start-up losses for the three developing business in 2007/08 is expected tobe similar to last year. FINANCIAL REVIEW Revenue and operating profit Group revenue increased by 9.8 per cent from £4,100 million to £4,501 million. Operating profit increased by 11.2 per cent from £159.9 million to £177.8million, after taking account charges of £3.1 million (2006: £5.0 million) forprofits and losses on property disposals, taxation of associates and the costsof the Demerger award plan. Currency translation Currency translation decreased group revenue by £8.2 million (2006: £17.7million) and retail profit by £0.7 million (2006: £0.9 million). For the year to31 January 2007, 61 per cent of the Group's revenue and 85 per cent of theGroup's retail profit were denominated in euros. Financing costs Net financing costs in the financial year amounted to £12.4 million (2006 :£16.6 million), including net interest on bank borrowings of £8.4 million (2006:£11.0 million) and net financing expense on pension schemes of £3.4 million(2006: £3.0 million). Finance costs for 2006 included a one off charge of £2.1million for the accelerated amortisation of loan arrangement fees following thereplacement and repayment of the loan facility negotiated at the time of thedemerger from Kingfisher. The reduction in net financing costs also reflected the reduction in debt as aresult of the improved earnings and further reduction in working capital. Taxation The tax charge included within the Group income statement is £56.0 million(2006: £48.6 million).This excludes a charge of £2.7 million (2006: £2.2million) in respect of its joint venture and associates, which is includedwithin operating profit. Including the charge for the joint venture andassociates, the tax charge is £58.7 million (2006: £50.8 million) and theeffective tax rate would be 34.9 per cent (2006: 34.9 per cent). Further detailsare set out in Note 6 in the preliminary announcement. Earnings per share Basic and diluted earnings per share were 20.7 pence in the year to 31 January2007 compared with 17.8 pence last year, an increase of 16.3 per cent. Basic adjusted earnings per share was 20.8 pence (2006: 18.1 pence) computedafter excluding the effects of the Demerger Award Plan and profit/loss ondisposal of property, plant and equipment, plus the tax effect of theseadjustments. Dividends The Board has proposed a final dividend of 10.05 pence per share, a rise of 9.8per cent on last year. The dividend for the year as a whole of 13.3 pence pershare represents an increase of 9.9 per cent and is covered by 1.6 timesearnings. The proposed increase reflects the strong earnings growth in the yearand the continuing cash generative nature of the group. The final dividend willbe paid on 13 July 2007 to shareholders registered at close of business on 15June 2007. Financial position Shareholders' funds increased by £71.7 million from £294.5 million to £366.2million due to retained earnings and favourable movements on the pensionschemes. As a result of changes in the treatment of put options over minorityinterests, the opening shareholders' funds were restated, resulting in a netreduction of £24.4 million. Working capital reduced in the year as a result of unchanged inventory levelsdespite higher sales and an increase in trade and other payables to £896.8million (2006: £836.6 million) Pensions The IAS 19 disclosures show a net deficit for all the Group's defined benefitpension schemes at 31 January 2007 of £87.0 million (2006: £119.7 million)before taking account of any deferred tax asset. The deficit reduced due to theimprovement in fair value of plan assets and an increase in the discount rate.The total deficit is equal to less than 5 per cent of the Group's marketcapitalisation and we believe it can be prudently resolved over a period oftime. Property In May 2006 an external review of the Group's property portfolio was undertakenwhich attributed approximately £495 million as a total fair market value. Thisrepresents an estimated 85 per cent uplift against the £268 million net bookvalue disclosed in the year end Group financial statements as at 31 January2006. Cash Flow Free Cash Flow in the year was £154.0 million (2006: £102.0 million) comprisingcash generated from operations of £307.9 million (2006: £259.7 million), lessoutflows in respect of taxation of £37.8 million (2006: £54.1 million) andcapital expenditure and other investments. Cash generation improved as a result of the earnings growth and working capitalmanagement. Inventory levels remained flat despite a near 10 per cent increasein revenue as improvement in warehousing and logistics were delivered fromrecent investment. An increase in net other working capital balances, includingsupplier rebate collection, resulted in a positive cash flow of £60.0 million(2006: £47.7 million). Capital expenditure Net capital expenditure and investments totalled £111.6 million (2006: £97.4million). Expenditure largely relates to the expansion and improvement of theGroup's store portfolios, plus the initial investment in the Darty Box, Darty'striple play service. In the coming year the group intends to accelerate itsdevelopment of the Group's stores. In particular after the successfulintroduction of mezzanine floors in nine Comet stores, including four in thepast year, the Group intends to add mezzanine floors to a further ten stores inthe next year as part of a programme affecting 40 stores over the next fouryears. Net Debt As a result of the strong cash generation of the Group, net debt at the year endwas £75.4 million (2006: £166.3 million) a reduction of £90.9 million. Due tothe substantial seasonality of its sales, the Group does experience significantseasonal variation in its borrowings, with peak borrowings during October andNovember around £150 million higher than earlier in the year. Financial Reporting Following an announcement by IFRIC in July 2006, the Group has revised itstreatment for the put options granted in respect of outstanding minorityinterests (comparative figures have been updated for this change). The overalleffect was to reduce net assets at 31 January 2006 by £24.4 million. There wasno impact on the prior year profit. There have been no other changes to accounting policies applied by the Group inthe year. Change of Year End The Group will be changing its year end from 31 January to 30 April with effectfrom the period to 30 April 2008. Outline timetables of the changes to the financial reporting and dividendpayment schedules will be made available on the Group's website,www.kesaelectricals.com. KESA ELECTRICALS plc Group income statementfor the financial year ended 31 January 2007 Year ended Year ended Year ended 31 January 31 January 31 January 2007 2006 2007 Note £m £m •m---------------------------------- ----- -------- -------- -------- Revenue 3 4,500.9 4,100.0 6,621.7Group operating profit 2 167.5 151.8 246.4Share of post tax profit injoint ventures and associates 10.3 8.1 15.1---------------------------------- ----- -------- -------- -------- Operating profit 3 177.8 159.9 261.5---------------------------------- ----- -------- -------- -------- Analysed as:Retail profit 180.9 164.9 266.1Share of joint ventures andassociates interest and taxation (2.7) (2.2) (4.0)Demerger award plan charge (0.5) (1.8) (0.7)Profit/(loss) on disposal ofproperty, plant and equipment 0.1 (1.0) 0.1---------------------------------- ----- -------- -------- -------- Operating profit 3 177.8 159.9 261.5---------------------------------- ----- -------- -------- -------- Finance costs 4 (19.3) (24.4) (28.4)Finance income 5 6.9 7.8 10.2---------------------------------- ----- -------- -------- -------- Profit before income tax 165.4 143.3 243.3 UK taxation (5.8) (3.7) (8.5)Overseas taxation (50.2) (44.9) (73.9)---------------------------------- ----- -------- -------- -------- Total taxation 6 (56.0) (48.6) (82.4)---------------------------------- ----- -------- -------- -------- Profit for the financial yearfrom continuing operations 109.4 94.7 160.9---------------------------------- ----- -------- -------- -------- Profit attributable to:- Equity shareholders 109.4 94.2 160.9- Minority interests - 0.5 ----------------------------------- ----- -------- -------- -------- 109.4 94.7 160.9---------------------------------- ----- -------- -------- -------- Earnings per share - basicand diluted (pence) 7 20.7 17.8 30.5---------------------------------- ----- -------- -------- -------- Dividends - Paid 12.4 11.2- Interim & final proposed for year 8 13.3 12.1---------------------------------- ----- -------- -------- -------- Translation rate - euro 1.47121.4645 - Note: Income statement information in Euros is provided for illustrative purposes onlyand is translated at the average exchange rate of €1.4712 for £1. Group statement of recognised income and expense for the financial year ended 31 January 2007 Year ended Year ended Year ended 31 January 31 January 31 January 2007 2006 2007 Restated Note £m £m •m---------------------------------- ----- -------- -------- -------- Exchange differences (5.7) (1.5) (8.4)Actuarial gains/(losses) on retirement benefit obligations 28.3 (14.6) 41.6Tax on actuarial (gains)/losseson retirement benefit obligations (8.7) 4.4 (12.8)Available for sale assets - fair value gains net of tax 1.6 2.3 2.4 - recycled and reported in net profit - (0.3)Cash flow hedges - fair value gains net of tax 2.7 2.8 4.0 - recycled and reported in net profit 0.6 - 0.9Impact of put options exercised/(entered into) during the year 10.9 (5.6) 16.0Tax on employee share schemes (1.2) (0.7) (1.8)---------------------------------- ----- -------- -------- -------- Net profit/(loss) recogniseddirectly in equity 28.5 (13.2) 41.9Profit for the year 3 109.4 94.7 160.9---------------------------------- ----- -------- -------- -------- Total recognised income for theyear 137.9 81.5 202.8 Adjustment for the first timeadoption of IAS 32 and IAS 39 - (16.2) ----------------------------------- ----- -------- -------- -------- Total recognised income 137.9 65.3 202.8---------------------------------- ----- -------- -------- -------- Attributable to:- Equity shareholders 137.9 81.0 202.8- Minority interests - 0.5 ----------------------------------- ----- -------- -------- -------- Total recognised income for theyear 137.9 81.5 202.8---------------------------------- ----- -------- -------- -------- The adjustment for first time adoption of IAS 32 and IAS 39 is attributable toequity shareholders. Notes: 1) Statement of recognised income and expense information in Euros isprovided for illustrative purposes only and is translated at the averageexchange rate of €1.4712 for £1. 2) The adjustment for the first time adoption of IAS 32 and IAS 39 hasbeen restated to reflect the change in accounting policy for put optionsexplained in note 1 of these statements. Group balance sheetas at 31 January 2007 31 January 31 January 31 January 2007 2006 2007 restated Note £m £m •m----------------------------------- ----- -------- -------- -------- AssetsNon-current assetsIntangible assets 217.9 200.8 328.6Property, plant and equipment 513.9 530.8 775.0Available for sale financial assets 20.0 20.0 30.2Investments in joint ventures andassociates 43.7 39.1 65.9Other receivables 10.9 9.8 16.4Derivative financial instruments 5.0 1.0 7.5Deferred income tax assets 26.3 38.0 39.7---------------------------------- ----- -------- -------- -------- Total non-current assets 837.7 839.5 1,263.3---------------------------------- ----- -------- -------- -------- Current assetsInventories 614.3 616.7 926.4Trade and other receivables 280.5 244.4 423.0Income tax 12.1 9.3 18.2Other investments 72.3 80.5 109.0Derivative financial instruments 0.2 1.4 0.3Cash and cash equivalents 163.3 159.6 246.3---------------------------------- ----- -------- -------- -------- Total current assets 1,142.7 1,111.9 1,723.2---------------------------------- ----- -------- -------- -------- Total assets 1,980.4 1,951.4 2,986.5---------------------------------- ----- -------- -------- -------- LiabilitiesCurrent liabilitiesBorrowings (105.9) (56.6) (159.7)Income tax liabilities (21.2) (11.9) (31.9)Trade and other payables (896.8) (836.6) (1,352.5)Derivative financial instruments (0.1) (1.0) (0.2)Provisions (1.2) (0.6) (1.8)---------------------------------- ----- -------- -------- -------- Total current liabilities (1,025.2) (906.7) (1,546.1)---------------------------------- ----- -------- -------- -------- Non-current liabilitiesBorrowings (202.4) (347.0) (305.2)Other payables (259.3) (245.0) (391.1)Deferred income tax liabilities (35.1) (26.7) (52.9)Retirement benefits 13 (87.0) (119.7) (131.0)Provisions (0.7) (0.5) (1.1)---------------------------------- ----- -------- -------- -------- Total non-current liabilities (584.5) (738.9) (881.3)---------------------------------- ----- -------- -------- -------- Total liabilities (1,609.7) (1,645.6) (2,427.4)---------------------------------- ----- -------- -------- -------- Net assets 370.7 305.8 559.1---------------------------------- ----- -------- -------- -------- Group balance sheet (contd.) 31 January 31 January 31 January 2007 2006 2007 restated Note £m £m •m----------------------------------- ----- -------- -------- -------- EquityShare capital 132.4 132.4 199.7Other reserves 736.9 726.8 1,111.3Retained earnings (503.1) (564.7) (758.7)----------------------------------- ----- -------- -------- -------- Total equity shareholders' funds 9 366.2 294.5 552.3----------------------------------- ----- -------- -------- -------- Minority interests 4.5 11.3 6.8----------------------------------- ----- -------- -------- -------- Total equity 370.7 305.8 559.1----------------------------------- ----- -------- -------- -------- Translation rate - euro 1.5081 1.4638 - Note: Balance sheet information in Euros is provided for illustrative purposes onlyand is translated at the closing exchange rate of €1.5081 for £1. Group cash flow statementfor the financial year ended 31 January 2007 Year ended Year ended Year ended 31 January 31 January 31 January 2007 2006 2007 Note £m £m •m---------------------------------- ----- -------- -------- -------- Cash flows from operating activitiesCash generated from operations 10 307.9 259.7 453.0Interest received 6.7 7.9 9.9Interest paid (15.6) (17.5) (23.0)Tax paid (37.8) (54.1) (55.6)---------------------------------- ----- -------- -------- -------- Net cash flows from operatingactivities 261.2 196.0 384.3---------------------------------- ----- -------- -------- -------- Cash flows from investing activitiesAcquisition of subsidiaries (net of cash acquired) (13.1) (0.4) (19.3)Proceeds from sale of property,plant and equipment 1.0 5.2 1.5Purchase of property, plant andequipment (80.0) (97.8) (117.7)Proceeds from sale of available for sale investments - 0.4 -Purchase of intangible assets (19.5) (4.9) (28.7)Proceeds from sale of intangibleassets - 0.1 -Cash inflow from other currentinvestments 6.9 14.1 10.2Dividends received from joint ventures 4.4 3.4 6.5---------------------------------- ----- -------- -------- -------- Net cash used in investingactivities (100.3) (79.9) (147.5)---------------------------------- ----- -------- -------- -------- Cash flows from financing activitiesFinance lease principal payments - (1.7) - Proceeds from long-term borrowings 489.8 472.6 720.6Repayment of long-term borrowings (627.9) (602.5) (923.8)Dividends paid to shareholders (65.7) (59.3) (96.7)Dividends paid to minorityinterests (0.9) (0.9) (1.3)---------------------------------- ----- -------- -------- -------- Net cash used in financingactivities (204.7) (191.8) (301.2)---------------------------------- ----- -------- -------- -------- Net cash outflow from cash, cash equivalents and bank overdrafts 12 (43.8) (75.7) (64.4)---------------------------------- ----- -------- -------- -------- Effects of exchange rate changes (2.2) (3.4) (3.2)---------------------------------- ----- -------- -------- -------- Net decrease in cash, cash equivalents and bank overdrafts (46.0) (79.1) (67.6)---------------------------------- ----- -------- -------- -------- Cash, cash equivalents and bankoverdrafts at start of year 105.8 184.9 155.7---------------------------------- ----- -------- -------- -------- Cash, cash equivalents and bankoverdrafts at end of year 11 59.8 105.8 88.1---------------------------------- ----- -------- -------- -------- Note: Cash flow information in Euros is provided for illustrative purposes only and istranslated at the average exchange rate of €1.4712 for £1. Notes: 1 Basis of preparation The preliminary results for the year ended 31 January 2007 have been extractedfrom audited accounts which have not yet been delivered to the Registrar ofCompanies. They have been prepared on the basis of the accounting policies setout in the Group's 2006 Financial Statements, all of which have been appliedconsistently throughout the year and preceding year, except for the amendment toits accounting policy concerning put options held by minorities ( see below).The statutory accounts of the Company for the year ended 31 January 2006, onwhich the auditors have given an unqualified opinion, have been filed with theRegistrar of Companies. The financial information set out in this PreliminaryAnnouncement does not constitute statutory accounts for the year ended 31January 2007 or 31 January 2006 within the meaning of section 240 of theCompanies Act 1985. The financial information for the year ended 31 January 2007is derived from the statutory accounts for that year. The report of the auditorson the statutory accounts for the year ended 31 January 2007 was unqualified anddid not contain a statement under Section 237 of the Companies Act 1985. A copy of the information to be provided to financial analysts is available onrequest from the Company Secretary, 22 - 24 Ely Place, London, EC1N 6TE. It isalso on Kesa's website, www.kesaelectricals.com. As disclosed in the Group's Interim Report for the six months ended 31 July2006, Kesa Electricals plc has taken note of the conclusions reached by theInternational Financial Reporting Interpretations Committee (IFRIC) in its July2006 meeting. As such, the Group has amended its accounting policy concerningput options held by minorities and now recognises a liability for these in itsbalance sheet. The liability represents the Group's best estimate of the amountthat would be paid for the minorities' shares in the event that the put wereexercised. The impact of this change in accounting policy has been to reducepreviously reported net assets at 1 February 2005 and 31 January 2006 by £19.1mand £24.4m respectively. There was no impact on the prior year's profit. 2 Group operating profit Year ended Year ended 31 January 31 January 2007 2006 restated £m £m----------------------------------- ----------- -----------Revenue 4,500.9 4,100.0Cost of sales (3,188.8) (2,876.8)---------------------------------- ----------- -----------Gross profit 1,312.1 1,223.2 Distribution costs (222.0) (216.5)Selling expenses (840.3) (797.9)Administrative expenses (104.8) (89.3)Other income 22.5 32.3---------------------------------- ----------- -----------Group operating profit 167.5 151.8 Share of post tax profit in jointventures and associates 10.3 8.1---------------------------------- ----------- -----------Operating profit 177.8 159.9---------------------------------- ----------- ----------- The Demerger award plan charge and profits/losses on disposal of property, plantand equipment are included within administrative expenses. Group operating profit includes net premiums on exit from leased premises of£6.4 million (2006: £0.1 million). Total revenue includes revenue from services of £226.7m (2006: £211.4m). Suchrevenues predominantly comprise those relating to customer support agreements,delivery and installation, product repairs and product support. 3 Segmental analysis year ended 31 January 2007 France France UK Central Darty BUT Comet Other Costs Group £m £m £m £m £m £m----------------------------- ------- ------- ------- ------- ------- ------- Revenue 1,733.9 595.7 1,676.5 494.8 - 4,500.9Retail profit/(loss) 114.2 36.1 46.1 (2.4) (13.1) 180.9Share of joint ventures andassociates interest andtaxation (0.3) (2.4) - - - (2.7)Demerger award plan charge (0.1) - (0.1) (0.1) (0.2) (0.5)(Loss)/profit on disposal ofproperty, plant andequipment (0.1) 0.2 - - - 0.1----------------------------- ------- ------- ------- ------- ------- -------Operating profit/(loss) 113.7 33.9 46.0 (2.5) (13.3) 177.8----------------------------- ------- ------- ------- ------- ------- -------Finance costs (19.3)Finance income 6.9Finance costs - net (12.4)----------------------------- ------- ------- ------- ------- ------- -------Profit before income tax 165.4Income tax expense (56.0)----------------------------- ------- ------- ------- ------- ------- -------Profit for the year 109.4----------------------------- ------- ------- ------- ------- ------- ------- The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and BUT are £5.9m and £7.1m respectively. Theshare of post tax profits of the joint ventures and associates included withinthe operating profit for Darty and BUT are £5.6m and £4.7m respectively. Year ended 31 January 2006 France France UK Central Darty BUT Comet Other costs Group £m £m £m £m £m £m----------------------------- ------- ------- ------- ------- ------- -------Revenue 1,597.4 578.0 1,529.8 394.8 - 4,100.0Retail profit/(loss) 109.9 34.2 38.3 (5.4) (12.1) 164.9Share of joint ventures andassociates interest andtaxation (0.4) (1.8) - - - (2.2)Demerger award plan charge (0.6) (0.2) (0.3) (0.2) (0.5) (1.8)Loss on disposal ofproperty, plant andequipment (0.8) (0.1) (0.1) - - (1.0)----------------------------- ------- ------- ------- ------- ------- -------Operating profit/(loss) 108.1 32.1 37.9 (5.6) (12.6) 159.9----------------------------- ------- ------- ------- ------- ------- -------Finance costs (24.4)Finance income 7.8----------------------------- ------- ------- ------- ------- ------- -------Finance costs - net (16.6)----------------------------- ------- ------- ------- ------- ------- -------Profit before income tax 143.3Income tax expense (48.6)----------------------------- ------- ------- ------- ------- ------- -------Profit for the year 94.7----------------------------- ------- ------- ------- ------- ------- ------- The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and BUT are £5.1m and £5.2m respectively. Theshare of post tax profits of the joint ventures and associates included withinthe operating profit for Darty and BUT are £4.7m and £3.4m respectively. 3 Segmental analysis (contd.) At 31 January 2007 and 31 January 2006, the Group was organised into fourbusiness segments, as follows: - Darty- BUT- Comet- Other (includes BCC, NVB, Datart, Darty Italy, Darty Switzerland and Darty Turkey) Segment revenues by origin are not materially different to segment revenues bydestination. The Directors do not consider there to be a secondary segment by which the Group is managed. 4 Finance costs Year ended Year ended 31 January 31 January 2007 2006 £m £m--------------------------------------------- ----------- -----------Interest payable on bank borrowings 15.3 18.8Interest payable on finance leases 0.3 0.4Net interest on pension schemes 3.4 3.0Write off of loan arrangement fees - 2.1Foreign exchange losses 0.3 0.1--------------------------------------------- ----------- -----------Total finance costs 19.3 24.4---------------------------------- ----------- ----------- The foreign exchange losses arise on the re-translation of short-term depositsdenominated in a currency other than the operation's functional currency. 5 Finance income Year ended Year ended 31 January 31 January 2007 2006 £m £m--------------------------------------------- ----------- -----------Bank and other interest receivable 6.9 7.8--------------------------------------------- ----------- ----------- 6 Income tax expense Year ended Year ended 31 January 31 January 2007 2006 £m £m--------------------------------------------- ----------- -----------Analysis of charge in yearUK corporation taxCurrent tax on profits for the year 6.3 4.9Adjustment in respect of prior years 0.1 (0.9)--------------------------------------------- ----------- ----------- 6.4 4.0Foreign taxCurrent tax on profits for the year 37.8 41.9Adjustment in respect of prior years - 0.2--------------------------------------------- ----------- ----------- 37.8 42.1 Deferred tax 11.8 2.5--------------------------------------------- ----------- -----------Total income tax expense 56.0 48.6--------------------------------------------- ----------- ----------- The tax charge relates entirely to continuing operations. Tax on items charged to equity:Current income tax charge on foreignexchange gains 0.3 0.7Current income tax charge on share schemes 0.7 0.1Deferred income tax charge on shareschemes 0.5 0.6Deferred income tax charge on cash flowhedges in reserves 1.4 1.2Deferred income tax credit on availablefor sale investments (0.9) (0.9)--------------------------------------------- ----------- -----------Deferred income tax charge/(credit) onactuarial gains/(losses) on retirement benefit obligations 8.7 (4.4)--------------------------------------------- ----------- -----------Total tax on items charged to equity 10.7 (2.7)--------------------------------------------- ----------- ----------- Factors affecting tax charge for the year The tax for the year is higher (2006: higher) than the standard rate of corporation tax in the UK (30%). The differences are explained below: Year ended Year ended 31 January 31 January 2007 2006 £m £m--------------------------------------------- ----------- -----------Profit on ordinary activities beforeincome tax 165.4 143.3 Profit on ordinary activities multiplied by rate of corporation tax in the UK of 30% (2006: 30%) 49.6 43.0Effects of:Adjustments in respect of foreign taxrates 6.3 5.5Adjustments in respect of joint venturesand associates (1.9) (1.5)Expenses not deductible for tax purposes 0.7 2.1Losses not recognised as deferred taxasset 0.7 0.5Change in tax rate 0.2 -Adjustments to tax in respect of prioryears 0.4 (1.0)--------------------------------------------- ----------- -----------Total income tax charge 56.0 48.6--------------------------------------------- ----------- ----------- Year ended Year ended 31 January 31 January 2007 2006 £m £m--------------------------------------------- ----------- -----------Income tax charge per group income statement 56.0 48.6Share of joint venture and associate taxation 2.7 2.2--------------------------------------------- ----------- -----------Adjusted income tax charge 58.7 50.8--------------------------------------------- ----------- -----------Profit before tax per group income statement 165.4 143.3Share of joint venture and associate taxation 2.7 2.2--------------------------------------------- ----------- -----------Adjusted profit before tax 168.1 145.5--------------------------------------------- ----------- -----------Effective tax rate 34.9% 34.9%--------------------------------------------- ----------- ----------- 7 Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toshareholders by 529.5 m shares (2006:529.5m), being the weighted average numberof ordinary shares in issue. There is no difference between diluted and basic earnings per share.Supplementary adjusted earnings per share figures are presented. These exclude the effects of the Demerger Award Plan charge and (profit)/losses on disposal of property, plant and equipment. Year ended Year ended 31 January 31 January 2007 2006 restated ------------------- -------------------- Per share Per share Earnings amount Earnings amount £m pence £m pence------------------------------------- -------- -------- ------- --------Basic earnings per shareEarnings attributable to ordinaryshareholders 109.4 20.7 94.2 17.8AdjustmentsDemerger Award Plan charge 0.5 0.1 1.8 0.3(Profit)/loss on disposal of property,plant and equipment (0.1) - 1.0 0.2Tax effect of adjustments (0.1) - (0.9) (0.2)------------------------------------- -------- -------- ------- --------Basic - adjusted earnings per share 109.7 20.8 96.1 18.1------------------------------------- -------- -------- ------- -------- 8 Dividends Year ended Year ended 31 January 31 January 2007 2006 £m £m-------------------------------------------------- ------- --------Final paid 2006: 9.15p (2005: 8.25p) per share 48.5 43.7Interim paid 2006: 3.25p (2005: 2.95p) per share 17.2 15.6 ------- -------- 65.7 59.3 ------- -------- In addition, the Directors are proposing a final dividend in respect of thefinancial year ended 31 January 2007 of 10.05p per share, which will absorb anestimated £53.2m of shareholders' funds. It will be paid on 13 July 2007 toshareholders who are on the register of members on 15 June 2007, subject toshareholder approval. 9 Statement of changes in shareholders' equity 2007 2006 restated £m £m---------------------------------------------------------- ------- -------- Profit attributable to shareholders 109.4 94.2Dividends (65.7) (59.3)Exchange differences (5.7) (1.5)Employee share schemes (0.2) 0.3Tax on employee share schemes (1.2) (0.7)Available for sale assets - fair value gains net of tax 1.6 2.3 - recycled and reported in net profit - (0.3)Cash flow hedges - fair value gains net of tax 2.7 2.8 - recycled and reported in net profit 0.6 -Investment in ESOP shares (0.3) (0.5)Net actuarial gain/(loss) on retirement benefit obligations 19.6 (10.2)Impact of put and call options exercised/entered into duringthe period 10.9 (5.6)Opening shareholders' equity 294.5 289.2 Adjustment for first time adoption of IAS 32 and IAS 39 - (16.2)---------------------------------------------------------- ------- --------Closing shareholders' equity 366.2 294.5---------------------------------------------------------- ------- -------- 10 Cash flow from operating activities 2007 2006 £m £m---------------------------------------------------------- ------- --------Profit after income tax 109.4 94.7Adjustments for:Income tax 58.7 50.8Depreciation and amortisation 80.2 78.6Impairment of property, plant and equipment 1.3 1.3Reversal of impairment of property, plant and equipment (0.2) (1.1)Loss on disposal of property, plant and equipment (including write offs) 4.6 2.0Finance income (6.9) (7.8)Finance costs 19.3 24.4Share of results of joint ventures before taxation (5.1) (3.8)Share of results of associates before taxation (7.9) (6.5)Changes in working capital:Increase in inventories (5.5) (20.6)Increase in trade and other receivables (42.4) (3.8)Increase in payables 102.4 51.5---------------------------------------------------------- ------- --------Net cash inflow from operating activities 307.9 259.7---------------------------------------------------------- ------- -------- Income tax includes joint venture and associate tax of £2.7 million (2006: £2.2million). 11 Reconciliation of net cash flow to in net debt movement year ended 31 January 2007 At 31 At 1 January Exchange February 2007 Cash flow difference 2006 £m £m £m £m----------------------------------------- -------- ------- -------- -------Cash at bank and in hand 53.0 (8.3) (1.3) 62.6Overdrafts (103.5) (50.7) 1.0 (53.8)Short-term deposits and investments 110.3 15.2 (1.9) 97.0----------------------------------------- -------- ------- -------- ------- 59.8 (43.8) (2.2) 105.8 Borrowings falling due within one year (2.4) 0.4 - (2.8)Borrowings falling due after one year (202.4) 137.7 6.9 (347.0)Finance leases (2.7) - 0.1 (2.8)----------------------------------------- -------- ------- -------- ------- (207.5) 138.1 7.0 (352.6) Other current investments 72.3 (6.9) (1.3) 80.5----------------------------------------- -------- ------- -------- -------Total (75.4) 87.4 3.5 (166.3)----------------------------------------- -------- ------- -------- ------- Year ended 31 January 2006 Transfers At 31 and other At 1 January Exchange non-cash February 2006 Cash Flow difference movements 2005 £m £m £m £m £m----------------------------------------- -------- ------- -------- ------- -------Cash at bank and in hand 62.6 3.6 (1.6) - 60.6Overdrafts (53.8) 36.6 0.3 - (90.7)Short-term deposits and investments 97.0 (115.9) (2.1) - 215.0----------------------------------------- -------- ------- -------- ------- ------- 105.8 (75.7) (3.4) - 184.9 Borrowings falling due within one year (2.8) 41.5 0.8 - (45.1)Borrowings falling due after one year (347.0) 88.4 6.6 - (442.0)Finance leases (2.8) 1.7 0.1 (0.5) (4.1)----------------------------------------- -------- ------- -------- ------- ------- (352.6) 131.6 7.5 (0.5) (491.2) Other current investments 80.5 (14.1) (1.0) - 95.6----------------------------------------- -------- ------- -------- ------- -------Total (166.3) 41.8 3.1 (0.5) (210.7)----------------------------------------- -------- ------- -------- ------- ------- 12 Reconciliation of cash flow to movement in net debt 2007 2006 £m £m--------------------------------------------------------- -------- --------Net cash outflow from cash and cash equivalents (43.8) (75.7)Cash outflow from change in borrowings and lease financing 138.1 131.6Cash inflow from change in other current investments (6.9) (14.1)--------------------------------------------------------- -------- --------Change in net debt resulting from cash flows 87.4 41.8--------------------------------------------------------- -------- --------Translation differences 3.5 3.1New finance leases - (0.5)--------------------------------------------------------- -------- --------Movement in net debt in the year 90.9 44.4--------------------------------------------------------- -------- --------Net debt at start of year (166.3) (210.7)--------------------------------------------------------- -------- --------Net debt at end of year (75.4) (166.3)--------------------------------------------------------- -------- -------- 13 Retirement benefits In the UK, the Group operates a defined benefit scheme (the "Comet PensionScheme"), which was closed to new entrants on 1 April 2004. All employees who donot participate in the Comet Pension Scheme are offered access to a Groupdefined contribution scheme. In France, the main pension benefits are provided through the state system. TheGroup is also required to pay lump sums ("retirement indemnities") to employeeswhen they retire from service. In addition, the Group provides a supplementaryfunded, defined benefit plan ("Supplementary Pension Plan") for its topexecutives. The amounts recognised in the balance sheet are determined as follows: 2007 2006 UK France Total UK France Total £m £m £m £m £m £mPresent value of defined benefitobligations 279.3 35.6 314.9 280.6 39.4 320.0Fair value of plan assets (208.8) (19.4) (228.2) (185.9) (15.3) (201.2)Unrecognised prior service costs - 0.3 0.3 - 0.9 0.9------------------------------ ------ ------- ------- ------ ------ ------Net liability recognised in the balance sheet 70.5 16.5 87.0 94.7 25.0 119.7------------------------------ ------ ------- ------- ------ ------ ------ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
DRTY.L