23rd Mar 2005 07:01
Kesa Electricals plc23 March 2005 Preliminary Results for the year ended 31 January 2005 Highlights •Group turnover increased by 5.0% to £3,959.1 million during the period (6.5% in constant currency(1)). •Group retail profit(2) grew by 2.0% to £206.7 million (up 3.9% in constant currency(1)). •Profit before tax excluding exceptional items and goodwill amortisation increased by 8.0% to £193.7 million. •Strong operating cash generation of £267.9 million enabled net debt to be reduced by £62.3 million to £209.7 million. •Adjusted earnings per share were 23.3 pence, up 10.4%. The Board is recommending a final dividend of 8.25 pence per share, making a total dividend for the year of 11.0 pence per share, an increase of 10% (1) Constant exchange rate of £1 = Euro 1.47 (2) Retail profit equates to operating profit including share of joint ventures and associates and after central costs but before operating exceptional items and goodwill amortisation. Jean-Noel Labroue, Chief Executive, commented: "I am pleased to report that overall the Group has delivered another set ofsatisfactory results. All our electrical businesses have gained market share andimproved retail profitability growth. Following BUT's disappointing performance,and to restore its sales and profitability, we have put a new senior managementteam in place and we are confident that they will successfully implement therequired financial and operational changes. Trading since the year end has been soft at Comet but more positive at Darty andBUT. We will continue to concentrate on managing our margins and costs,accelerating investment in our existing businesses and developing the Dartybrand in new markets." David Newlands, Chairman, commented: "All our businesses have delivered year-end results in line with ourexpectations with the exception of BUT. I am pleased that the strong cashflow generation has again enabled us tosubstantially reduce our debt, increase our investments for future growth anddeclare a significant increase in the dividend of 10 per cent." ENDS Enquiries Press:Kesa Electricals plcAnnabel Donaldson +44 (0) 20 7269 1400Guy Lavaud +33 (0) 1 43 18 5200 FinsburyAlex Shorland-Ball +44 (0) 20 7251 3801 Euro RSCGLaurent Dondey +33 (0) 1 58 47 9517 Analysts:Kesa Electricals plcMartin Reavley +44 (0) 20 7269 1400Simon Ward +44 (0) 20 7269 1400 There will be a presentation today to analysts and institutions at 9am at KingEdward's Hall, Merrill Lynch, 2 King Edward Street, London EC1. 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 9am, and recorded for accesslater 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 ending 31January 2005. Results as reported in sterling Turnover Turnover Change Retail profit(1) Retail profit(1) Change 2004/05 2003/04 2004/05 2003/04 £m £m £m £m Darty 1536.7 1487.2 3.3% 117.9 112.3 5.0%Comet 1538.1 1444.4 6.5% 52.0 47.4 9.7%BUT 548.6 536.7 2.2% 45.5 53.7 (15.3)%Other* 335.7 302.8 10.9% 2.5 (0.9) -Central - - - (11.2) (9.8) -Total 3959.1 3771.1 5.0% 206.7 202.7 2.0% •/£ exchange rates of 1.47 (2004/05) and 1.44 (2003/04) *Includes BCC, New Vanden Borre and Datart. CZK/• exchange rates of 31.99 (2004/05) and 31.83(2003/04) Results as reported in local currency Turnover Turnover Change Retail profit(1) Retail profit(1) Change 2004/05 2003/04 2004/05 2003/04 m m m m Darty €2264.3 €2141.6 5.7% €173.7 €161.6 7.5%Comet £1538.1 £1444.4 6.5% £52.0 £ 47.4 9.7%BUT €808.4 €772.8 4.7% €67.0 €77.3 (13.3)%Other* €494.7 €435.7 13.5% €3.7 •(1.3) -Central - - - £(11.2) £(9.8) -Total - - - - Financial Highlights Group turnover was £3959.1 million, up 5.0 per cent on last year (6.5 per centin constant currency, 3.3 per cent on a like-for-like basis). Group retailprofit(1) was £206.7 million, up 2.0 per cent on last year (up 3.9 per cent inconstant currency). Operating exceptional items before taxation were £4.8 million, reflecting thecosts of the Demerger Award Plan. Profit before tax excluding exceptional items and goodwill amortisationincreased by 8.0 per cent to £193.7 million. The net interest charge was £13.0 million, giving profit before tax and afterinterest of £184.2 million. (1) Retail profit equates to operating profit including share of joint ventures and associates and after central costs but before operating exceptional items and goodwill amortisation. The cash generative nature of the business was demonstrated by an operating cashflow of £267.9 million. Net capital expenditure was £90.2 million (£79.6 millionfor the previous year), which included investment in new stores, refurbishmentsand warehousing facilities. Net debt was reduced by £62.3 million to £209.7million. Adjusted earnings per share were up 10.4 per cent to 23.3 pence. The Board isrecommending a final dividend of 8.25 pence per share making a total dividendfor the year of 11.0 pence per share, an increase of 10 per cent, and covered2.1 times by adjusted earnings. Trading Highlights The electrical businesses gained market share overall against an increasinglycompetitive market, particularly over the key Christmas trading period. Sales growth across the Group has been led by the increased demand for digitaltechnologies, fuelled by price deflation. All electrical businesses saw verystrong year on year growth in products such as flat screen and plasma TVs andMP3 players, in a shift away from the more traditional analogue ranges. Themarket for white goods was relatively stable across Europe with a slowdown inthe rate of deflation towards the end of the period and in grey products demandfor laptops and LCD monitors continued to increase. In addition, all businessessaw an overall improvement in accessory sales. Total sales growth at Darty was, up 5.7 per cent in local currency (up 3.9 percent on a like-for-like basis), ahead of the market. The margin mix pressure,resulting from the rise in sales of multimedia, was offset by good productmargin management per category and productivity gains in logistics and AfterSales Service. Retail profit grew by 7.5 per cent in local currency. Comet's sales also increased ahead of the market, up 6.5 per cent (up 3.4 percent on a like-for-like basis). Retail profit grew by 9.7 per cent as a resultof improved average selling price and the continued focus on both marginmanagement and cost control. At BUT, furniture sales rose in the second half of the year in an improvingFrench furniture market, but electrical sales were weak as the business did notbenefit from the increased demand for new technologies. Costs and margin haveremained in line with expectations. BUT's full year retail profit performance(down 13.3 per cent in local currency) reflects overall weak trading and a €4.5million one-off correction in accounting for unrealised profit in stockpurchased through CFA, the in-house wholesale business. The other businesses, BCC, Vanden Borre and Datart, delivered a stronglike-for-like sales performance of 6.7 per cent as they all gained significantmarket share. Leveraging the cost base led to an overall retail profit of £2.5million which takes into account the £0.9 million start-up costs for Italy. Outlook Trading since the year end has been soft at Comet but more positive at Darty andBUT. The outlook for 2005 is challenging in both our key markets: France and theUK. We anticipate that the UK market will continue to be difficult and inFrance, although recent market trends have been positive, consumer confidenceremains subdued. We expect last year's trend of the increasing move towards digital technology tocontinue which will require a continued focus on product and margin mix andstrict cost control. At BUT, we have an action plan in place to reverse the sales and profit decline. We will continue to focus on cash generation, which will enable us to acceleratethe investment in our existing businesses, develop the Darty brand in newmarkets and further reduce our debt. DARTY 2004/05 2003/04 Change 2004/05 2003/04 Change £m £m •m •m-------------- -------- --------- -------- -------- -------- --------Turnover 1536.7 1487.2 3.3% 2264.3 2141.6 5.7%-------------- -------- --------- -------- -------- -------- --------Retail profit 117.9 112.3 5.0% 173.7 161.6 7.5%-------------- -------- --------- -------- -------- -------- -------- No of stores* 204 200-------------- -------- --------- -------- Sales space* 261.1 250.8 4.1%(000s sq m)-------------- -------- --------- -------- *as at 31 January Total turnover grew by 5.7 per cent in local currency with like-for-like salesincreasing by 3.9 per cent. This was helped by particularly strong sales of newtechnologies such as laptops, flat screen TVs and DVD recorders In a French market which is estimated to have grown by 4.4 per cent* during theperiod, Darty achieved market share gains in all categories except mobilephones. The accelerated growth of new technologies, triggered by price deflation, hashad a small effect on gross margin. However, the productivity gains enabledDarty to deliver a slight improvement in retail profitability. The efficiency plan for the organisation has continued. The warehouserationalisation will progress throughout 2005 with the opening of the newwarehouse in the east of Lyon in the first quarter of the year and the closureof two regional warehouses in Metz and the north of Lyon. The national aftersales service call centre network will be finalised during 2005 when the sixthand final centre opens in the first half of the year. Finally, during the yearDarty merged two of its regional offices. The new store format continued to show improved results with refurbished storesdelivering an average uplift in sales in the first year of 15-20 per cent, froman average initial investment of €1.2 million fit-out costs per store, and salesin the nine stores now in their second year of trading are ahead of the averagelike-for-like. The year-end total for new format stores was 24, with 20 moreplanned for the year ending January 2006. Of these, six will be new stores, fivewill be re-located stores and nine will be extended stores. Three older storeswill close. *GFK / Kesa COMET 2004/05 2003/04 Change £m £m--------------- ----------- ----------- -----------Turnover 1538.1 1444.4 6.5%--------------- ----------- ----------- -----------Retail profit 52.0 47.4 9.7%--------------- ----------- ----------- ----------- No of stores* 250 250--------------- ----------- ----------- -----------Sales space* 253.3 243.3 4.1%(000s sq m)--------------- ----------- ----------- ----------- *at 31 January Comet performed ahead of the market (up 3.4 per cent on a like-for-like basis)against a background of the growth in the UK electricals market slowing to 2.5per cent*. Comet improved its overall market share and achieved very strong growth in salesof products such as LCD and plasma TVs and DVD recorders. Multimedia sales benefited from the strong demand for laptops and LCD monitors.Sales of white goods were helped by an increase in sales of laundry products andthe growing trend for contemporary kitchen appliances such as American stylefridge-freezers. Average selling price has improved in all key categories reflecting the successof Comet's ongoing repositioning strategy. Good margin control across allcategories led to an overall stable gross margin despite the current mix effect.This, together with cost control, led to a retail profit improvement of 9.7 percent to £52.0 million. Investment in the business continued. The new warehouse at Skelmersdale openedin time for the critical peak trading period and successfully provided anuninterrupted service to stores and home delivery platforms. The store modernisation programme continued with four new stores, sixrelocations and three extensions, including the first mezzanine store, whilefour smaller stores were closed. This brings the year end total of new formatstores to 63. In the current year Comet will accelerate this programme with a further 15stores, two of which will be new and 13 will be either relocations orrefurbishments and three stores will have a trading mezzanine floor. Inaddition, all stores will be harmonised with the black and yellow signage. *GFK / Kesa BUT 2004/05 2003/04 Change 2004/05 2003/04 Change £m £m •m •m-------------- -------- -------- -------- -------- -------- --------Turnover 548.6 536.7 2.2% 808.4 772.8 4.7%-------------- -------- -------- -------- -------- -------- --------Retail profit 45.5 53.7 (15.3)% 67.0 77.3 (13.3)%-------------- -------- -------- -------- -------- -------- -------- No of stores* 104 102-------------- -------- -------- -------- Sales space* 330.9 315.8 4.8%(000s sq m)-------------- -------- -------- -------- *at 31 January Total store turnover at BUT grew 2.6 per cent in local currency, but was down2.0 per cent on a like-for-like basis. Whilst furniture sales increased in thesecond half of the year in an improving French furniture market which isestimated to have grown 3.1 per cent* during the year after several years ofdecline, electrical sales were weak as the business did not benefit from theincreased demand for new technology products. Overall sales towards the end ofthe year were negatively affected by the delay in the official French saleperiod. Product margin and costs remained under control but retail profit fell by 13.3per cent in local currency, due to overall weak trading and a €4.5 millionone-off correction in accounting for unrealised profit in stock purchasedthrough CFA, the in-house wholesale business. During the year, BUT opened one new store and acquired one franchisee, bringingthe total number of owned stores at the year end to 104. In addition sevenstores were refurbished or extended. In the first half of 2005, BUT will opentwo new stores. BUT has an action plan to restore its sales and profitability. A new seniormanagement team has been appointed and, with more efficient financial processesin place and the centralisation of logistics scheduled to be completed during2005, the priority is to improve the customer offer. For furniture, BUT will complete its sell-through of the old ranges to bereplaced with a wider selection of the more popular contemporary ranges. Thetest on two relayed stores in Pontoise and Tourville has been successful and afurther 10 are already planned. For electricals, with the help of the Kesa global sourcing team, BUT will offera more aggressive proposition which better reflects its customer profile. *IPEA/ Cetelem OTHER BUSINESSES Local Local Change Currency* Currency* 2004/05 2003/04 Change 2004/05 2003/04 £m £m •m •m-------- -------- -------- -------- --------- --------- --------Turnover 335.7 302.8 10.9% 494.7 435.7 13.5%-------- -------- -------- -------- --------- --------- --------Retail 2.5 (0.9) - 3.7 (1.3) -profit -------- -------- -------- -------- --------- --------- -------- No of 111 107stores** -------- -------- -------- -------- Sales 121.2 109.2 11.0%space**(000s sqm) -------- -------- -------- -------- *•/Czech KR exchange rates of 31.99 (2004/05) and 31.83 (2003/04)**as at 31 January Total turnover for BCC, Datart and Vanden Borre grew by 13.5 per cent in localcurrency, 6.7 per cent on a like-for-like basis. Including the £0.9 millionstart-up costs for Italy, retail profit rose to £2.5 million, helped byleveraging the cost base. Market conditions improved in Belgium and the Czech Republic but continued todecline in Holland where the market is estimated to be down 5.8 per cent*.Overall, all three businesses made significant market share gains. New Developments Using the Darty brand, Kesa will open its first store in Italy in April, with afurther four stores opening by the end of the summer of 2005. All these storeswill be in major shopping centres in the Milan / Turin region where the companycan exploit its competitive advantage in the still fragmented market. The startup costs for the Italian operation in the year ending January 2006 areforecasted to be approximately €7 million. Following Italy, Kesa will open three stores in Switzerland, an attractivemarket where spending per capita is high. The stores will be opened by the endof the second half in Lausanne and Montreux, again using the Darty brand andbusiness model. The start up costs for the year ending January 2006 areforecasted to be approximately €6 million. *GFK/Kesa CENTRAL COSTS The central costs in retail profit of £11.2 million, up from £9.8 million forthe same period last year, are in line with expectations and reflect the firstfull year of trading as an independently listed company. OPERATING EXCEPTIONAL ITEMS Operating exceptional items of £4.8 million refer to the costs of the DemergerAward Plan, as previously stated. In the same period last year, the groupbenefited from the £10.6 million refund of the fine previously paid by Darty. TAXATION The effective tax rate on profits before tax is 35.6 per cent (35.9 per cent inthe previous year). CASHFLOW Operational cashflow was £267.9 million for the period. Net capital expenditureincreased to £90.2 million (£79.6 million for the previous year), which includedinvestment in new stores, refurbishments and warehousing facilities. Net debtwas reduced by £62.3 million to £209.7 million. DIVIDEND The Directors are recommending a final dividend of 8.25 pence, giving a totaldividend for the year of 11.0 pence. The final dividend, once approved, will bepaid on 15 July 2005 to the persons on the Register of Members at the close ofbusiness on 17 June 2005. CONSOLIDATED PROFT AND LOSS ACCOUNT for the financial year ended 31 January 2005 Note Year Year Year ended ended ended 31 31 31 January January January 2005 2004 2005 £m £m •m(1) Turnover including share of joint 3a 3,976.7 3,787.3 5,859.7 ventures Less: share of joint ventures 3a (17.6) (16.2) (25.9) -------- -------- -------- Group turnover 1 3,959.1 3,771.1 5,833.8 ======== ======== ======== Group operating profit excluding joint 1 185.7 193.4 273.6 ventures and associates Share of operating profit in: Joint ventures 5.0 4.6 7.4 Associates 7.4 6.8 10.9 -------- -------- -------- Total operating profit including share 198.1 204.8 291.9 of joint ventures and associates -------------------------------------------------------------------------- Analysed as: Retail profit (2) 3b 206.7 202.7 304.6 Exceptional items - operating 2a (4.8) 5.7 (7.1) Goodwill amortisation (3.8) (3.6) (5.6) -------- -------- -------- Total operating profit including share 198.1 204.8 291.9 of joint ventures and associates -------------------------------------------------------------------------- Exceptional items - non-operating Loss on disposal of fixed assets 2b (0.9) (2.7) (1.3) -------- -------- -------- Profit on ordinary activities before 3c 197.2 202.1 290.6 interest and taxation Other interest receivable and similar 4a 9.3 7.1 13.7 income Interest payable and similar charges 4b (22.3) (30.5) (32.9) -------- -------- -------- Net interest payable (13.0) (23.4) (19.2) -------- -------- -------- Profit on ordinary activities before 184.2 178.7 271.4 taxation Tax on profit on ordinary activities 5 (65.6) (64.2) (96.7) -------- -------- -------- Profit on ordinary activities after 118.6 114.5 174.7 taxation Equity minority interests (2.3) (1.2) (3.4) -------- -------- -------- Profit for the financial year 116.3 113.3 171.3 attributable to shareholders of Kesa Electricals plc Dividends payable to shareholders of (58.3) (53.0) (85.9) Kesa Electricals plc -------- -------- -------- Retained profit for the year 58.0 60.3 85.4 ======== ======== ======== Earnings per share (pence) Basic 6 22.0 21.4 32.4 Basic - adjusted(3) 6 23.3 21.1 34.3 Diluted 6 22.0 21.4 32.4 ======== ======== ======== Notes: (1) Profit and loss account information in euros is unaudited and isprovided for illustrative purposes only and is translated at the average 2005exchange rate of €1.4735 for £1. (2) Retail profit represents total operating profit including share ofjoint ventures and associates before exceptional items and goodwillamortisation. (3) Adjusted earnings per share is stated before all exceptional itemsand goodwill amortisation. The above results all arise from continuingoperations. The notes on pages 5 to 13 form part of these financial statements. CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES for the financial year ended 31 January 2005 Year Year ended ended 31 31 January January 2005 2004 £m £m Profit for the financial year 116.3 113.3 Net foreign exchange adjustments offset in 0.7 26.1 reserves ----- ----- Total recognised gains relating to the financial 117.0 139.4 year ===== ===== RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS for the financial year ended 31 January 2005 Group Company Year Year Year Year ended ended ended ended 31 31 31 31 January January January January 2005 2004 2005 2004 £m £m £m £m Profit attributable to 116.3 113.3 45.0 65.9 shareholders Dividends (58.3) (53.0) (58.3) (53.0) 58.0 60.3 (13.3) 12.9 ------ ------ ------ ------New share capital issued - - - 132.4 Other recognised gains and 0.7 30.1 - - losses Employee share schemes (0.9) 2.5 1.8 0.2 Opening shareholders' funds 311.8 218.9 145.5 - ------ ------ ------ ------ Closing shareholders' funds 369.6 311.8 134.0 145.5 ====== ====== ====== ====== CONSOLIDATED BALANCE SHEETAs at 31 January 2005 Group Company Note 31 31 31 31 31 January January January January January 2005 2004 2005 2005 2004 £m £m •m(1) £m £m Fixed assets Intangible assets 187.4 178.8 270.2 - - Tangible assets 536.9 522.6 774.2 0.1 - Investments Investments in subsidiary - - - 132.5 132.5 undertakings Investment in joint ventures Share of gross assets 15.4 14.5 22.2 - - Share of gross liabilities (14.0) (9.4) (20.2) - - ------ ------ ------ ------ ------ 1.4 5.1 2.0 132.5 132.5 Investment in associates 33.9 27.3 48.9 - - Other investments 7.0 7.0 10.1 - - ------ ------ ------ ------ ------ Total investments 42.3 39.4 61.0 132.5 132.5 ------ ------ ------ ------ ------ Total fixed assets 766.6 740.8 1,105.4 132.6 132.5 ------ ------ ------ ------ ------ Current assets Stocks 608.6 579.3 877.6 - - Debtors due within one 247.7 273.5 357.2 73.1 94.1 year Debtors due after more 11.6 8.3 16.7 - - than one year Current asset investments 310.6 274.8 447.9 - - Cash at bank and in hand 60.6 62.8 87.4 - - ------ ------ ------ ------ ------ 1,239.1 1,198.7 1,786.8 73.1 94.1 Creditors: amounts falling (955.1) (913.6) (1,377.3) (71.7) (81.1) due within one year ------ ------ ------ ------ ------ Net current assets/ 284.0 285.1 409.5 1.4 13.0 (liabilities) ------ ------ ------ ------ ------ Total assets less current 1,050.6 1,025.9 1,514.9 134.0 145.5 liabilities ------ ------ ------ ------ ------ Creditors: amounts falling (657.6) (695.5) (948.3) - - due after more than one year Provisions for liabilities (10.0) (7.2) (14.4) - - and charges ------ ------ ------ ------ ------ Net assets 383.0 323.2 552.2 134.0 145.5 ======= ======= ======= ======= ======= Capital and reserves Called up share capital 132.4 132.4 190.9 132.4 132.4 Other reserves 741.8 741.8 1,069.6 - - Profit and loss account (504.6) (562.4) (727.6) 1.6 13.1 ------ ------ ------ ------ ------ Equity shareholders' funds 369.6 311.8 532.9 134.0 145.5 Equity minority interests 13.4 11.4 19.3 - - ------ ------ ------ ------ ------ 383.0 323.2 552.2 134.0 145.5 ======= ======= ======= ======= ======= Notes: (1) Balance sheet information in euros is unaudited and is provided forillustrative purposes only and is translated at the closing 2005 exchange rateof €1.4420 for £1. The notes on pages 5 to 13 form part of these financial statements. CONSOLIDATED CASH FLOW STATEMENT for the financial year ended 31 January 2005 Note Year Year Year ended ended ended 31 31 31 January January January 2005 2004 2005 £m £m •m(1) Net cash inflow from operating activities 7a 267.9 296.6 394.7 ------- ------- -------Dividends received from joint ventures 8.6 5.8 12.6 Returns on investments and servicing of finance Interest received 9.0 7.1 13.2 Interest paid (22.0) (33.9) (32.4) Interest element of finance lease rental (0.2) (0.2) (0.3) payments ------- ------- ------- Net cash outflow from returns on (13.2) (27.0) (19.5) investments and servicing of finance ------- ------- ------- Taxation UK corporation tax paid (10.0) (9.0) (14.7) Overseas tax paid (47.0) (55.0) (69.3) ------- ------- ------- Taxation paid (57.0) (64.0) (84.0) ------- ------- ------- Capital expenditure and financial investment Payments to acquire tangible fixed assets (93.2) (110.4) (137.3) Receipts from the sale of tangible fixed 6.5 31.7 9.6 assets Payments to acquire investments - (1.6) - Receipts from the sale of investments - 1.5 - Payments to acquire intangible fixed (0.7) (0.8) (1.0) assets ------- ------- ------- Net cash outflow from capital expenditure (87.4) (79.6) (128.7) and financial investment ------- ------- ------- Acquisitions and disposals Purchase of subsidiary and business (2.8) - (4.1) undertakings ------- ------- ------- Net cash outflow from acquisitions and (2.8) - (4.1) disposals Equity dividends paid (54.4) (13.2) (80.2) ------- ------- ------- Net cash inflow before use of liquid 61.7 118.6 90.8 resources and financing Management of liquid resources Net movement in short term deposits and 7c (29.2) (141.4) (43.0) investments ------- ------- ------- Net cash inflow from management of liquid (29.2) (141.4) (43.0) resources ------- ------- ------- Financing Capital element of finance lease rental (0.9) (2.0) (1.3) payments (Decrease)/increase in loans (45.9) 13.6 (67.6) ------- ------- ------- Net cash (outflow)/inflow from financing 7c (46.8) 11.6 (68.9) ------- ------- ------- Decrease in cash in the year 7c (14.3) (11.2) (21.1) ------- ------- ------- Note: (1) Cash flow information in euros is unaudited and is provided forillustrative purposes only and is translated at the average 2005 exchange rate of €1.4735 for £1. The notes on pages 5 to 13 form part of these financial statements. 1. Group operating profit excluding joint ventures Group and associates 2005 2004 £m £m Group turnover 3,959.1 3,771.1 Cost of sales (2,790.0) (2,641.0) --------- --------- Gross profit 1,169.1 1,130.1 Selling expenses (817.8) (802.2) Administrative expenses (203.2) (194.0) Other income 37.6 59.5 --------- --------- Group operating profit excluding joint ventures and 185.7 193.4 associates --------- --------- 2. Exceptional items (a) Exceptional items - operating Exceptional operating items are Group analysed as follows: 2005 2004 £m £m Charge for Demerger Award Plan (4.8) (3.4) Costs associated with the demerger - (1.5) from Kingfisher plc Darty fine recovered - 10.6 --------- --------- (4.8) 5.7 --------- --------- In September 2002, Darty paid a fine of £9.6 million (€15.3 million) imposed by the French Competition Council for alleged anti-competitive activity in the period between 1989 and 1991. Darty successfully appealed against this decision,leading to the repayment of the fine in the year ended 31 January 2004 of £10.6 million (€15.3 million). (b) Exceptional items - non operating Exceptional non-operating items are analysed as follows: Group 2005 2004 £m £m Loss on disposal of fixed assets 0.9 2.7 === ===The tax effect of exceptional items is disclosed in note 6. 3. Segmental analysis Turnover The Group's operations are analysed by class of business, by fascia (Darty, BUT and Comet), and by the two major geographical regions, France and the UK. (a) Turnover by Origin The analysis of turnover by destination is not materially different to theanalysis of turnover by origin. Group 2005 2004 Country Business £m £m France Darty 1,536.7 1,487.2 BUT 548.6 536.7 ------- ------- 2,085.3 2,023.9 Group share of joint 17.6 16.2 ventures' turnover ------- ------- Total 2,102.9 2,040.1 United Kingdom Comet 1,538.1 1,444.4 Other 335.7 302.8 ------- ------- Turnover including share of joint 3,976.7 3,787.3 ventures ======= ======= Group turnover 3,959.1 3,771.1 Share of joint ventures' turnover 17.6 16.2 ======= ======= (b) Retail profit(1) Group 2005 2004 Country Business £m £m France Darty (including joint ventures and 117.9 112.3 associate) BUT (including 45.5 53.7 associate) ------ ------ Total 163.4 166.0 United Kingdom Comet 52.0 47.4 Other 2.5 (0.9) Central costs (11.2) (9.8) ------ ------ Retail profit 206.7 202.7 ====== ====== Notes: (1) Retail profit represents total operating profit including share ofjoint ventures and associates before exceptional items and goodwill amortisation. Group (c) Profit on ordinary activities before 2005 2004 interest and tax Country Business £m £m France Darty 107.7 114.6 BUT 38.3 44.2 ------ ------ 146.0 158.8 Joint ventures and 12.4 11.4 associates ------ ------ Total 158.4 170.2 United Kingdom Comet 51.4 47.6 Other (0.1) (3.5) Central costs (12.5) (12.2) ------ ------ Group profit before interest and tax 197.2 202.1 including share of joint ventures and associates ====== ====== Group profit before interest and tax 184.8 190.7 Share of joint ventures and associates 12.4 11.4 ====== ====== Group profit before interest and tax is stated after charging/crediting the following: - goodwill amortisation of £3.8 million - £2.1 million relating to Other, £1.6million to BUT and £0.1 million to Darty (2004: £3.6 million - £2.2 millionrelating to Other, £1.4 million to BUT and nil to Darty); - loss on disposal of fixed assets of £1.7 million - £1.1 million loss relatingto Darty, £0.2 million loss to BUT, £0.4 million loss to Comet (2004: £2.7million - £1.3 million loss relating to Darty, £2.3 million loss to BUT and £0.9million profit to Comet); - charge for the Demerger Award Plan of £4.8 million - £0.3 million relating toBUT, £1.0 million relating to Comet, £1.7 million relating to Darty, £0.4million relating to Other and £1.4 million relating to Central costs; (2004:£3.4 million - £0.3m relating to BUT, £0.6m relating to Comet, £1.2m relating toDarty, £0.3m relating to Other and £1.0m relating to Central costs). - costs associated with the demerger from Kingfisher plc of £nil (2004: £1.5mrelating to Central costs). - the recovery of Darty's fine for alleged anti-competitive activity on appealin 2005 of £nil (2004: £10.6 million); (d) Net assets Group Country Business 2005 2004 £m £m France Darty 111.7 121.0 BUT 401.6 388.4 ----- ----- Total 513.3 509.4 United Kingdom Comet 83.8 88.5 Other 70.8 79.2 ----- ----- Group net assets excluding centrally held net 667.9 677.1 assets/liabilities ===== ===== The above net assets are stated excluding any assets/liabilities held centrally.Net liabilities of £284.9 million (2004: £353.9 million) are held centrally bythe Group and are not considered capable of allocation between individualbusinesses. 4a. Other interest receivable and Group similar income 2005 2004 £m £m Bank and other interest receivable 9.3 7.1 ---- ---- 9.3 7.1 ==== ==== 4b. Interest payable and similar charges Bank and other interest payable Bank loans and overdrafts 21.5 14.9 Other loans 0.6 0.6 Finance lease charges 0.2 0.2 Share of interest payable by joint ventures and - 0.1 associates Interest payable to Kingfisher Group - 14.7 companies ---- ---- 22.3 30.5 ==== ==== 5. Taxation Group 2005 2004 £m £m UK corporation tax Current tax on profits of the period 12.9 6.4 Adjustment in respect of prior periods (0.1) (0.4) ----- ----- 12.8 6.0Related Shares:
DRTY.L