29th Mar 2007 07:03
Kingfisher PLC29 March 2007 Consolidated income statement For the financial year ended 3 February 2007 Before Exceptional Total Before Exceptional Total exceptional items exceptional items items (note 3) items (note 3)£ millions Notes 2007 2007 2007 2006 2006 2006Continuing operations Revenue 2 8,675.9 - 8,675.9 8,010.1 - 8,010.1Cost of sales (5,623.7) - (5,623.7) (5,165.1) (7.9) (5,173.0)Gross profit 3,052.2 - 3,052.2 2,845.0 (7.9) 2,837.1Selling and distribution expenses (2,207.3) - (2,207.3) (2,005.0) (181.0) (2,186.0)Administrative expenses (433.7) - (433.7) (390.7) (26.4) (417.1)Other income 23.7 49.5 73.2 24.2 18.9 43.1Other expenses - - - - (19.0) (19.0)Share of post tax results of joint ventures and associates 16.9 - 16.9 11.4 - 11.4Operating profit 2 451.8 49.5 501.3 484.9 (215.4) 269.5 Analysed as:Retail profit before central costs 503.7 49.5 553.2 533.1 (219.1) 314.0Central costs (39.1) - (39.1) (37.8) 3.7 (34.1)Amortisation of acquisition intangibles (0.3) - (0.3) (0.1) - (0.1)Share of interest and taxation of (12.5) - (12.5) (10.3) - (10.3)joint ventures and associates Total finance costs (75.6) - (75.6) (51.6) - (51.6)Total finance income 24.8 - 24.8 13.9 - 13.9Net finance costs 4 (50.8) - (50.8) (37.7) - (37.7) Profit before taxation 401.0 49.5 450.5 447.2 (215.4) 231.8 Income tax expense 5 (119.4) 7.3 (112.1) (161.6) 68.8 (92.8)Profit for the year 281.6 56.8 338.4 285.6 (146.6) 139.0 Attributable to:Equity shareholders of the parent 336.8 139.5Minority interests 1.6 (0.5) 338.4 139.0 Earnings per share (pence) 6Basic 14.4p 6.0pDiluted 14.4p 6.0pAdjusted (basic) 11.9p 12.3p The proposed final dividend for the financial year ended 3 February 2007,subject to approval by shareholders at the Annual General Meeting, amounts to£161.8m. Consolidated statement of recognised income and expense For the financial year ended 3 February 2007 £ millions Notes 2007 2006Actuarial gains/(losses) on post employment benefits 9 95.3 (45.6)Currency translation differences 9 (70.9) 28.4Cash flow hedgesFair value (losses)/gains 9 (9.1) 7.5Losses transferred to inventories 9 3.1 0.5Tax on items recognised directly in equity 9 (30.1) 20.1Net (expense)/income recognised directly in equity (11.7) 10.9Profit for the year 338.4 139.0Total recognised income for the year 326.7 149.9Attributable to:Equity shareholders of the parent 325.1 149.4Minority interests 1.6 0.5 326.7 149.9 Consolidated balance sheet As at 3 February 2007 £ millions Notes 2007 2006Non-current assetsGoodwill 2,551.5 2,558.8Intangible assets 89.5 101.7Property, plant and equipment 3,210.5 3,265.0Investment property 29.4 15.3Investments accounted for using equity method 184.9 185.0Deferred tax assets 30.2 -Other receivables 46.6 51.7 6,142.6 6,177.5Current assetsInventories 1,531.0 1,355.3Trade and other receivables 505.4 570.6Current tax assets 14.6 20.7Available for sale financial assets 28.4 -Cash and cash equivalents 11 394.5 234.1 2,473.9 2,180.7Total assets 8,616.5 8,358.2 Current liabilitiesShort-term borrowings (241.0) (346.8)Trade and other payables (1,958.3) (1,750.8)Provisions (56.3) (46.6)Current tax liabilities (86.9) (77.0) (2,342.5) (2,221.2)Net current assets/(liabilities) 131.4 (40.5)Total assets less current liabilities 6,274.0 6,137.0 Non-current liabilitiesLong-term borrowings (1,431.7) (1,255.5)Other payables (50.8) (5.7)Provisions (53.2) (111.4)Deferred tax liabilities (262.7) (204.4)Post employment benefits 8 (54.6) (239.6) (1,853.0) (1,816.6)Total liabilities (4,195.5) (4,037.8) Net assets 4,421.0 4,320.4 EquityShare capital 370.7 369.8Share premium 2,185.2 2,175.3Treasury shares (81.3) (95.1)Reserves 9 1,939.9 1,861.0Minority interests 6.5 9.4Total equity 4,421.0 4,320.4 Consolidated cash flow statement For the financial year ended 3 February 2007 £ millions Notes 2007 2006 Net cash flows from operating activities 10 559.4 304.1 Cash flows from investing activitiesPurchase of subsidiary and business undertakings, net of cash acquired (2.2) (161.0)Purchase of associates and joint ventures - (2.2)Payments to acquire property, plant and equipment and investment property (438.6) (435.3)Payments to acquire intangible assets (28.3) (71.7)Receipts from sale of property, plant and equipment and investment property 251.0 111.2Receipts from sale of intangible assets 0.1 0.4Receipts from sale of available for sale financial assets 0.4 3.6Increase in available for sale financial assets (29.3) -Dividends received from joint ventures and associates 5.1 4.9Net cash used in investing activities (241.8) (550.1) Cash flows from financing activitiesInterest paid (70.3) (39.3)Interest element of finance lease rental payments (5.8) (6.6)Interest received 18.5 10.9Proceeds from issue of share capital 10.8 9.7Capital injections from minority interests 1.0 1.7Receipts from the sale of own shares 7.1 2.6Issue of Medium Term Notes and other fixed term debt 252.4 373.5(Decrease)/increase in other loans (133.3) 150.5Capital element of finance lease rental payments (11.8) (7.8)Dividends paid to equity shareholders of the parent (248.4) (247.4)Dividends paid to minority interests (2.1) -Net cash (used in)/generated from financing activities (181.9) 247.8 Net increase in cash and cash equivalents 12 135.7 1.8 Cash and cash equivalents at beginning of year 113.7 105.9Exchange differences (4.6) 6.0 Cash and cash equivalents at end of year 11 244.8 113.7 For the purposes of the cash flow statement, cash and cash equivalents areincluded net of bank overdrafts repayable on demand. These bank overdrafts areexcluded from cash and cash equivalents disclosed on the balance sheet. NOTES TO THE FINANCIAL INFORMATION For the financial year ended 3 February 2007 1. General information a) Basis of preparation The financial information which comprises the consolidated income statement,consolidated balance sheet, consolidated cash flow statement, consolidatedstatement of recognised income and expense and related notes do not constitutethe Group's Annual Report and Accounts. The auditors have reported on theGroup's statutory accounts for each of the years 2007 and 2006 under section 235of the Companies Act 1985, which do not contain statements under sections 237(2) or (3) of the Companies Act 1985 and are unqualified. The statutory accountsfor 2006 have been delivered to the Registrar of Companies and the statutoryaccounts for 2007 will be filed with the Registrar in due course. Copies of theAnnual Report and Accounts will be posted to shareholders during the weekbeginning 23 April 2007. The Group's financial reporting year ends on the nearest Saturday to 31 Januaryeach year. The current financial year is the 53 weeks ended 3 February 2007.The comparative financial year is the 52 weeks ended 28 January 2006. This onlyimpacts the UK operations with all of the other operations reporting on acalendar basis as a result of local statutory requirements. The consolidated financial statements have been prepared in accordance with EUendorsed International Financial Reporting Standards (IFRS), IFRICinterpretations and those parts of the Companies Act 1985 applicable tocompanies reporting under IFRS. The consolidated financial statements have beenprepared under the historical cost convention, as modified by the revaluation ofcertain financial instruments. The principal accounting policies applied in the preparation of the consolidatedfinancial statements are consistent with those set out in the statutory accountsfor 2006. b) Use of adjusted measures Kingfisher believes that retail profit, adjusted profit before tax and adjustedearnings per share provide additional useful information on underlying trends toshareholders. These measures are used by Kingfisher for internal performanceanalysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional item' and 'adjusted' are not defined terms underIFRS and may therefore not be comparable with similarly titled profit measuresreported by other companies. It is not intended to be a substitute for, orsuperior to, GAAP measurements of profit. The term 'adjusted' refers to therelevant measure being reported excluding exceptional items, financing fairvalue remeasurements and amortisation of acquisition intangibles. Retail profitis defined as operating profit before central costs (the costs of the CorporateCentre), exceptional items and the Group's share of interest and taxation ofjoint ventures and associates. The separate reporting of non-recurring exceptional items, which are presentedas exceptional within their relevant income statement category, helps provide anindication of the Group's underlying business performance. The principal itemswhich will be included as exceptional items are: • non trading items included in operating profit such as profits and losses on the disposal of subsidiaries, associates and investments which do not form part of the Group's trading activities; • gains and losses on the disposal of properties; and • the costs of significant restructuring and incremental acquisition integration costs. 2 Segmental analysis The Group's primary reporting segments are geographic, with the Group operatingin four main geographical areas, being the UK, France, Rest of Europe and Asia.The Group only has one business segment being retail, therefore no secondarysegmental disclosure is given. The 'Rest of Europe' segment consists of B&Q Ireland, Castorama Poland,Castorama Italy, Castorama Russia, Brico Depot Spain, Koctas and Hornbach.Poland has been shown separately as it meets the reportable segment criteria asprescribed by IAS 14. The 'Asia' segment consists of B&Q China, B&Q Korea and B&Q Taiwan. The segment results for the year ended 3 February 2007 are as follows: £ millions United France Poland Rest of Asia Total Kingdom EuropeExternal revenue 4,261.5 2,955.2 507.9 494.6 456.7 8,675.9Segment result before joint ventures and associates 233.1 204.5 57.9 28.8 (0.8) 523.5Share of post tax results of joint ventures and 16.9associates - 0.5 - 12.5 3.9Total segment result 233.1 205.0 57.9 41.3 3.1 540.4Central costs (39.1)Operating profit 501.3Net finance costs (50.8)Profit before taxation 450.5Income tax expense (112.1)Profit for the year 338.4 The segment results for the year ended 28 January 2006 are as follows: £ millions United France Poland Rest of Asia Total Kingdom EuropeExternal revenue 4,172.0 2,724.9 417.0 378.2 318.0 8,010.1Segment result before joint ventures and associates 10.9 228.9 52.5 20.3 (20.4) 292.2Share of post tax results of joint ventures and associates - 0.3 - 5.5 5.6 11.4Total segment result 10.9 229.2 52.5 25.8 (14.8) 303.6Central costs (34.1)Operating profit 269.5Net finance costs (37.7)Profit before taxation 231.8Income tax expense (92.8)Profit for the year 139.0 Unallocated central costs principally comprise the Head Office operations ofKingfisher plc. 3 Exceptional items The following exceptional items, as defined in note 1b, have been (charged)/credited in arriving at profit before taxation: £ millions 2007 2006Included within cost of sales, selling and distribution expenses and administrative expenses:B&Q UK - reorganisation costs - (205.3)OBI China - integration costs - (10.0) (215.3) - Included within other income:Profit on disposal of properties 49.1 15.3Profit on disposal of available for sale financial 0.4 3.6assets 49.5 18.9 Included within other expenses:B&Q UK - financial services termination fee (19.0) -Total exceptional items 49.5 (215.4) Current year Total profits recognised on the disposal of properties totalled £49.1m in theyear. The Group recognised £42.7m profit on disposal of properties in connectionwith the sale and leaseback of seven UK warehouse stores to The British LandCompany. The Group also received further consideration of £0.4m in the current yearrelating to the disposal of its investment in improveline.com in the prior year. Prior year During the prior year, the Group incurred a £205.3 million restructuring chargein B&Q UK relating to the planned closure of 20 stores, the downsizing of afurther 17 stores and the costs of streamlining B&Q's corporate offices. Afurther charge of £19.0m was incurred in the prior year following B&Q's decisionto terminate a contract with its previous supplier of consumer credit services,which gave rise to the repayment of part of the original proceeds received ondisposal of Time Retail Finance in 2003. £10.0m of costs were also incurred in the prior year in relation to theintegration of the OBI China business into B&Q China. These costs include theincremental costs of the dedicated integration team, re-branding costs and thewrite-off of property, plant and equipment which were not deemed suitable forthe B&Q China business model. The Group disposed of a number of properties during the prior year giving riseto a profit of £15.3m. The Group also disposed of its investment inimproveline.com, for cash consideration of £3.6m and realising a profit of £3.6mas the investment had been fully provided against in a prior year. Refer to note 5 for the taxation impact on exceptional items. 4 Net finance costs £ millions 2007 2007 2006 2006Bank and other interest payable (74.1) (46.7)Less amounts capitalised in the cost of qualifying assets 1.2 3.3 (72.9) (43.4)Finance lease charges (5.8) (6.0)Net interest charge on defined benefit schemes (note 8) - (3.8)Financing fair value remeasurements 4.7 1.6Unwinding of discount on provisions (1.6) -Total finance cost (75.6) (51.6) Bank and other interest receivable 18.5 13.9Net interest return on defined benefit schemes (note 8) 6.3 -Total finance income 24.8 13.9 Net finance costs (50.8) (37.7) Borrowing costs included in the cost of qualifying assets during the year aroseon the general borrowing pool and are calculated by applying a capitalisationrate of 5.5% (2006: 5.3%) to expenditure on such assets. Interest payable above includes amortisation of issue costs of debt of £0.9m(2006: £0.5m). 5 Income tax expense £ millions 2007 2006 UK corporation taxCurrent tax on profits for the year 35.7 7.2Adjustment in respect of prior years (0.3) (15.8) 35.4 (8.6)Double taxation relief (5.5) (0.4) 29.9 (9.0)Foreign taxCurrent tax on profits for the year 80.7 86.9Adjustments in respect of prior years (2.3) 0.2 78.4 87.1 Deferred taxCurrent year 12.7 20.2Adjustment in respect of prior years (8.9) (4.3)Attributable to changes in tax rates - (1.2) 3.8 14.7 112.1 92.8 In addition to the amounts charged to the income statement, tax of £30.1m wascharged directly to equity (2006: £20.1m credited) (Refer note 9). A tax credit of £7.3m has been recognised in the income statement relating toexceptional items, of which £4.6m is credited against the current year taxcharge in relation to the £49.5m net exceptional income, with the remaining£2.7m in respect of prior periods, relating to tax previously provided onexceptional items. 6 Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year, excluding those held in the Executive Share Option Plan Trust(ESOP) which for the purpose of this calculation are treated as cancelled. For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive potential ordinaryshares. These represent share options granted to employees where the exerciseprice is less than the average market price of the Company's shares during theyear. Adjusted earnings per share figures are also presented. These exclude theeffects of exceptional items, financing fair value remeasurements andamortisation of acquisition intangibles, to allow comparison of underlyingtrading performance on a consistent basis. 2007 2006 Earnings Weighted Per share Earnings Weighted Per share average amount average amount number of number of shares shares £millions millions pence £millions millions penceBasic earnings per shareEarnings attributable to ordinary shareholders 336.8 2,333.0 14.4 139.5 2,324.7 6.0 Effect of dilutive securitiesOptions 10.8 - 10.2 -Diluted earnings per share 14.4 336.8 2,343.8 139.5 2,334.9 6.0Basic earnings per share 14.4 139.5 2,324.7 6.0 336.8 2,333.0Effect of non-recurring costsExceptional items (49.5) (2.1) 215.4 9.3Tax impact arising on exceptional items (7.3) (0.3) (68.8) (2.9)Financing fair value remeasurements (4.7) (0.2) (1.6) (0.1)Tax impact arising on financing 1.4 0.1 0.5 - remeasurementsAmortisation of acquisition intangibles 0.3 - 0.1 -Basic - adjusted earnings per share 277.0 2,333.0 11.9 285.1 2,324.7 12.3Diluted earnings per share 336.8 2,343.8 14.4 139.5 2,334.9 6.0Effect of non-recurring costsExceptional items (49.5) (2.2) 215.4 9.2Tax impact arising on exceptional items (7.3) (0.3) (68.8) (2.9)Financing fair value remeasurements (4.7) (0.2) (1.6) (0.1)Tax impact arising on financing 1.4 0.1 0.5 - remeasurementsAmortisation of acquisition intangibles 0.3 - 0.1 -Diluted - adjusted earnings per share 277.0 2,343.8 11.8 285.1 2,334.9 12.2 7 Dividends £ millions 2007 2006Amounts recognised as distributions to equity shareholders in the year:Final dividend for the year ended 28 January 2006 of 6.8p per share (29 January 2005: 6.8p 158.5 159.7per share)Interim dividend for the year ended 3 February 2007 of 3.85p per share (28 January 2006: 89.9 89.53.85p per share)Dividend paid to Employee Share Ownership Plan Trust (ESOP) shares - (1.8) 248.4 247.4Proposed final dividend for the year ended 3 February 2007 of 6.8p per share 161.8 The proposed final dividend for the year ended 3 February 2007 is subject toapproval by shareholders at the Annual General Meeting and has not been includedas a liability in these financial statements. 8 Post employment benefits The Group operates a variety of post employment benefit arrangements coveringboth funded and unfunded defined benefit schemes and funded defined contributionschemes. The most significant are the funded, final salary defined benefit anddefined contribution schemes for the Group's UK employees; however variousdefined benefit and defined contribution schemes are operated in France, Poland,Italy, China and South Korea. In France and Poland, they are retirementindemnity in nature; and in South Korea and Italy, termination indemnity innature. The most recent actuarial valuations of plan assets and the present value of thedefined benefit obligations were carried out at 3 February 2007. The principalactuarial assumptions and expected rates of return used were as follows: 2007 2006Annual % rate UK Other UK OtherDiscount rate 5.3 4.6 to 5.5 4.7 4.0 to 6.0Salary escalation 4.5 3.5 to 6.7 4.3 2.0 to 6.7Rate of pension increases 2.9 n/a 2.7 n/aPrice inflation 2.9 2.0 to 2.5 2.7 2.0 to 2.5 2007 2006% rate of return UK Other UK OtherEquities 7.8 - 7.6 -Bonds 4.9 4.5 4.2 -Property 6.3 - 5.9 -Other 3.9 4.0 3.7 4.0Overall expected rate of return 6.5 4.0 6.1 4.0 The overall expected rate of return is effectively a weighted average of theindividual asset categories and their inherent expected rates of return. The main financial assumption is the real discount rate, i.e. the excess of thediscount rate over the rate of inflation. If this assumption increased/decreasedby 0.1%, the UK defined benefit obligation would decrease/increase byapproximately £30.0m, and the annual UK current service cost would decrease/increase by approximately £1.0m. The assumptions for pensioner longevity are based on an analysis of pensionerdeath trends under the scheme over the period from 1998 to 2004, together withallowances for future improvements to death rates for all members. The specifictables used are the same as those used in the 2004 funding valuation, namelyPMA92C2010 for male pensioners, PFA92C2010 (+2 year age rating) for femalepensioners. Further allowances for improving longevity are included for membersyet to retire. At 3 February 2007 the Group has further strengthened the assumption for futureimprovements to mortality rates implying an increase in the assumed lifeexpectancies. This has the impact of increasing the defined benefit obligationby 4% compared with that using the previous mortality rate projections. Theserevised assumptions are equivalent to assuming the average age at death for apensioner currently aged 60 is 85.1 for a male and 86.3 for a female. They arealso equivalent to assuming an average age at death for a member aged 60 in 15years time is 86.2 for a male and 87.5 for a female. These assumptions will bereviewed following the next funding valuation due no later than 31 March 2007. The amounts recognised in the income statement are as follows: £ millions 2007 2006 UK Other Total UK Other TotalAmounts charged to operating profit:Current service cost 34.9 4.7 39.6 33.2 3.7 36.9Past service cost - - - - - -Total operating charge 34.9 4.7 39.6 33.2 3.7 36.9Amounts (credited)/charged to net finance costs:Expected return on pension scheme assets (73.1) (0.4) (73.5) (58.9) (0.4) (59.3)Interest on pension scheme liabilities 65.6 1.6 67.2 61.7 1.4 63.1Net interest (return)/charge (note 4) (7.5) 1.2 (6.3) 2.8 1.0 3.8Total charged to income statement 27.4 5.9 33.3 36.0 4.7 40.7 Of the charge to operating profit for the year, £27.3m (2006: £25.4m) and £12.3m(2006: £11.5m) were included, respectively, in selling and distribution expensesand administrative expenses, and a £6.3m net credit (2006: £3.8m net charge) wasincluded in net finance costs. Actuarial gains and losses have been reported inthe statement of recognised income and expense. The amounts included in the balance sheet, within non-current liabilities,arising from the Group's obligations in respect of its defined benefitretirement schemes, are determined as follows: 2007 2006£ millions UK Other Total UK Other TotalPresent value of defined benefit obligations (1,394.7) (36.8) (1,431.5) (1,420.4) (39.1) (1,459.5)Fair value of scheme assets 1,366.7 10.2 1,376.9 1,209.8 10.1 1,219.9Net liability recognised in the balance sheet (28.0) (26.6) (54.6) (210.6) (29.0) (239.6) Movements in the deficit during the year: 2007 2006£ millions UK Other Total UK Other TotalDeficit in scheme at beginning of year (210.6) (29.0) (239.6) (302.1) (23.6) (325.7)Total service cost charged in the income statement (as above) (34.9) (4.7) (39.6) (33.2) (3.7) (36.9)Interest charge (65.6) (1.6) (67.2) (61.7) (1.4) (63.1)Expected return on pension scheme assets 73.1 0.4 73.5 58.9 0.4 59.3Actuarial gains and losses 91.7 3.6 95.3 (43.2) (2.4) (45.6)Contributions paid 118.3 3.8 122.1 170.7 1.6 172.3Exchange differences - 0.9 0.9 - 0.1 0.1Deficit in scheme at end of year (before taxation) (28.0) (26.6) (54.6) (210.6) (29.0) (239.6) The analysis of the scheme assets at the balance sheet date is as follows: 2007 2006£ millions UK Other Total UK Other TotalEquities 705.0 - 705.0 638.5 - 638.5Bonds 512.3 0.2 512.5 449.4 - 449.4Property 121.3 - 121.3 96.7 - 96.7Other 28.1 10.0 38.1 25.2 10.1 35.3Total market value of assets 1,366.7 10.2 1,376.9 1,209.8 10.1 1,219.9 The pension plans do not hold any other assets than those disclosed above. The estimated amounts of contributions expected to be paid to the UK, France andother pension schemes during the next financial year is £105.5m. 9 Reserves £ millions Hedging Translation Other Retained Total reserve reserve reserves earningsAt 30 January 2005 (4.4) 56.8 159.0 1,736.1 1,947.5Actuarial losses on post employment benefits - - - (45.6) (45.6)Treasury shares disposed - - - (2.6) (2.6)Share-based compensation charge - - - 14.0 14.0Share-based compensation - shares awarded - - - (0.9) (0.9)Currency translation differences - 28.4 - - 28.4Cash flow hedges - fair value gains 7.5 - - - 7.5Cash flow hedges - losses transferred to 0.5 - - - 0.5inventoriesTax on items recognised directly in equity (2.4) 6.9 - 15.6 20.1Net gains recognised directly in equity 5.6 35.3 - (19.5) 21.4Profit for the year - - - 139.5 139.5Total recognised gains for the year 5.6 35.3 - 120.0 160.9Dividends - - - (247.4) (247.4)At 28 January 2006 1.2 92.1 159.0 1,608.7 1,861.0Actuarial gains on post employment benefits - - - 95.3 95.3Treasury shares disposed - - - (6.7) (6.7)Share-based compensation charge - - - 8.9 8.9Currency translation differences - (70.9) - - (70.9)Cash flow hedges - fair value losses (9.1) - - - (9.1)Cash flow hedges - losses transferred to inventories 3.1 - - - 3.1Tax on items recognised directly in equity 1.8 - - (31.9) (30.1)Net losses recognised directly in equity (4.2) (70.9) - 65.6 (9.5)Profit for the year - - - 336.8 336.8Total recognised gains for the year (4.2) (70.9) - 402.4 327.3Dividends - - - (248.4) (248.4)At 3 February 2007 (3.0) 21.2 159.0 1,762.7 1,939.9 10 Net cash flows from operating activities £ millions 2007 2006Operating profit 501.3 269.5 Adjustments for:Depreciation of property, plant and equipment and investment property 173.8 149.8Amortisation of intangible assets 33.2 32.0Impairment loss on property, plant and equipment and investment property 1.3 40.1Impairment loss on intangible assets - 7.5Share based compensation charge 9.0 14.1Share of post tax results of joint ventures and associates (16.9) (11.4)(Profit)/loss on disposal of property, plant and equipment and investment property (43.9) 22.5Loss on disposal of intangible assets 5.7 2.0Profit on disposal of available for sale financial assets (0.4) (3.6)Operating cash flows before movements in working capital 663.1 522.5Movements in working capital (excluding the effects of acquisitions and disposalsof subsidiaries and exchange differences on consolidation):Increase in inventories (215.0) (33.3)Decrease/(increase) in trade and other receivables 44.0 (97.3)Increase in trade and other payables 295.1 27.3Decrease in post employment benefits (82.5) (135.2)(Decrease)/increase in other provisions (47.0) 140.2 (5.4) (98.3)Cash generated by operations 657.7 424.2Income taxes paid (98.3) (120.1)Net cash flows from operating activities 559.4 304.1 11 Cash and cash equivalents £ millions 2007 2006Cash at bank and in hand 249.4 211.3Short-term deposits 145.1 22.8 394.5 234.1 The short-term deposits comprise money market deposits, attracting interestrates based on LIBOR or equivalent market rates, fixed for periods of up tothree months. The carrying amount of these assets approximate to their fairvalues. For the purposes of the consolidated cash flow statement, cash and cashequivalents comprise the following: £ millions 2007 2006Cash at bank and in hand 249.4 211.3Short-term deposits 145.1 22.8Bank overdrafts (149.7) (120.4) 244.8 113.7 12 Net debt Net debt incorporates the Group's borrowings, interest rate and cross currencyswaps that hedge those borrowings (excluding accrued interest), bank overdraftsand obligations under finance leases, less cash and cash equivalents and currentavailable for sale financial assets, as detailed below. £ millions 207 2006Cash and cash equivalents 394.5 234.1Current available for sale financial assets 28.4 -Bank overdrafts (149.7) (120.4)Bank loans (146.8) (286.2)Medium Term Notes and other fixed term debt (1,306.6) (1,123.8)Interest rate and cross currency swaps (excluding accrued interest) (44.0) 13.0Obligations under finance leases (69.6) (71.9)Net debt at end of year (1,293.8) (1,355.2) A reconciliation of the movement in net debt from the start to the end of theyear is detailed below. £ millions 2007 2006Net debt at start of year (1,355.2) (841.1)Net increase in cash and cash equivalents 135.7 1.8Increase in available for sale financial assets 29.3 -Amortisation of issue costs of debt (0.9) (0.5)Increase in debt and lease financing (107.3) (516.2)Exchange differences and fair value adjustments on financial instruments 4.6 0.8Net debt at end of year (1,293.8) (1,355.2) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Kingfisher