Final Results - Part 2

Group Income statement

for the year ended 30 April 2009

Year ended 30 April 2009

(audited)

15 months ended 30 April 2008

(audited)

Year ended 30 April 2009

(unaudited)

Continuing operations

Note

£m

£m

€m (1)

Revenue

2

4,954.1

5,356.6

5,906.8

Group operating (loss)/profit

2

(72.3)

134.1

(86.1)

Share of post tax profit in joint venture and associates 

2

7.3

6.9

8.7

Total operating (loss)/profit

(65.0)

141.0

(77.4)

Analysed as:

Retail profit (2)

3

77.0

143.2

91.8

Share of joint venture and associates interest and taxation

3

(0.7)

(0.6)

(0.8)

Valuation gains/(losses)

3

0.3

(0.6)

0.4

Exceptional restructuring costs

10

(23.1)

-

(27.5)

Amortisation and impairment of acquisition related intangible assets

3

(118.5)

(1.0)

(141.3)

Total operating (loss)/profit 

2

(65.0)

141.0

(77.4)

Finance costs

4

(14.0)

(23.5)

(16.7)

Finance income

5

6.5

11.9

7.7

Exceptional finance costs

4

(9.3)

(1.5)

(11.1)

(Loss)/profit before income tax

(81.8)

127.9

(97.5)

UK taxation

6.1

0.6

7.3

Overseas taxation

(38.9)

(45.6)

(46.4)

Total Taxation

6

(32.8)

(45.0)

(39.1)

(Loss)/profit for the financial year/period from continuing operations 

(114.6)

82.9

(136.6)

Profit for the financial year/period from discontinued operations 

9

3.2

36.7

3.8

(Loss)/profit for the financial year/period

(111.4)

119.6

(132.8)

(Loss)/profit attributable to:

- Equity shareholders

(111.4)

120.2

(132.8)

- Minority interests

-

(0.6)

-

(111.4)

119.6

(132.8)

(Losses)/earnings per share - basic and diluted (pence) 

Continuing operations 

(21.7)

15.8

(25.8)

Discontinued operations 

0.6

6.9

0.7

Total (losses)/earnings per share

8

(21.1)

22.7

(25.1)

Earnings per share - adjusted (pence) 

Continuing operations 

5.7

16.3

6.8

Discontinued operations 

0.6

6.9

0.7

Total adjusted earnings per share

8

6.3

23.2

7.5

Notes

1) Income statement information in euros is provided for illustrative purposes only and is translated at the average exchange rate of € 1.1923 for £1.

2) Retail profit represents total operating profit before the share of joint venture and associates' interest and taxation, valuation gains and losses on options to acquire minority interests, exceptional restructuring costs and amortisation and impairment of acquisition related intangible assets.

3) Adjusted earnings per share excludes the effects of valuation gains and losses on options to acquire minority interests, exceptional restructuring costs and exceptional finance costs  and amortisation and impairment of acquisition related intangible assets (note 8).

4) The notes on pages 6 to 23 form part of these financial information.

5) For details of equity dividends paid and proposed, see note 7 of the financial information.

Group statement of recognised income and expense 

for the year ended 30 April 2009 

Year ended 30 April 2009

(audited)

15 months ended 30 April 2008

(audited)

Year ended 30 April 2009

(unaudited)

Note

£m

£m

€m

Exchange differences 

11

(0.2)

49.0

(0.2)

Foreign exchange recycled to income statement on disposal of foreign operations

11

-

(59.4)

-

Actuarial gains on retirement benefit obligations 

19.2

6.1

22.9

Tax on actuarial gains on retirement benefit obligations

(5.5)

(3.1)

(6.6)

Available for sale assets  - fair value losses net of tax 

11

(14.1)

(5.2)

(16.8)

Cash flow hedges  - fair value losses net of tax 

11

(0.1)

-

(0.1)

- recycled and reported in net profit

11

-

0.2

-

Tax on employee share schemes 

11

(0.1)

 - 

(0.1)

Net loss  recognised directly in equity 

(0.8)

(12.4)

(0.9)

(Loss)/profit for the year/period

3

(111.4)

119.6

(132.8)

Total recognised (expense)/income for the year/period 

(112.2)

107.2

(133.7)

Attributable to:

- Equity shareholders

(112.2)

107.8

(133.7)

- Minority interests

-

(0.6)

-

Total recognised (expense)/income for the year/period 

(112.2)

107.2

(133.7)

Notes

1) Statement of recognised income and expense information in euros is provided for illustrative purposes only and is translated at the average exchange rate of €1.1923 for £1.

2) The notes on pages 6 to 24 form part of this financial information.

1 Basis of preparation

The preliminary results for the year ended 30 April 2009 have been extracted from audited accounts which have not yet been delivered to the Registrar of Companies. They have been prepared on the basis of the accounting policies set out in the Group's 2008 Financial Statements, all of which have been applied consistently throughout the year and the preceding 15 month period. The statutory accounts of the Company for the 15 month period ended 30 April 2008, on which the auditors have given an unqualified opinion, have been filed with the Registrar of Companies. The financial information set out in this Preliminary Announcement does not constitute statutory accounts for the year ended 30 April 2009 or 15 month period to 30 April 2008 within the meaning of sections 434-436 of the Companies Act 2006. The financial information for the year ended 30 April 2009 is derived from the statutory accounts for that period. The report of the auditors on the statutory accounts for the year ended 30 April 2009 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.

In order to improve internal planning processes, the Group has moved its financial year end to 30 April. These are the second accounts prepared to this new reporting date. The first accounts to this new reporting date were for the 15 months to 30 April 2008, which constitutes this year's comparative information. Therefore the two periods presented will not be entirely comparable for the purpose of the income statement, statement of changes in equity, cash flow statements and related notes.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union (EU) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial instruments and retirement benefits. 

2 Continuing Group operating (loss)/profit

Year ended 

30 April 

2009

15 months ended 

30 April 

2008

£m

£m

Analysis by function:

Revenue

4,954.1

5,356.6

Cost of sales

(3,585.5)

(3,857.0)

Gross profit

1,368.6

1,499.6

Distribution costs

(213.7)

(230.2)

Selling expenses

(852.8)

(934.0)

Exceptional restructuring costs

(23.1)

-

Amortisation and impairment of acquisition related intangible assets

(118.5)

-

Administrative expenses

(243.3)

(214.3)

Other income

10.5

13.0

Group operating (loss)/profit

(72.3)

134.1

Share of post tax profit in joint venture and associates

7.3

6.9

Total operating (loss)/profit

(65.0)

141.0

Continuing Group operating (loss)/ profit includes net premiums on exit from leased premises in the year to 30 April 2009 of £2.1m (15 months ended 30 April 2008: £5.6m). 

Property, plant and equipment disposal losses were £4.3m for the year ended 30 April 2009 (15 months ended 30 April 2008: £4.1m gain).

Continuing Group total revenue includes revenue from services in the year to 30 April 2009 of £314.2m (15 months ended 30 April 2008: £298.8m). Such revenues predominantly comprise those relating to customer support agreements, delivery and installation, product repairs and product support.

3 Segmental analysis

At 30 April 2009 and 30 April 2008, the Continuing Group was organised into three business segments, as follows:

 - Darty France

 - Comet

 - Other (includes BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland, Darty Turkey and Menaje del Hogar)

BUT was classified as a discontinued operation on 30 January 2008, following the announcement of the Group entering into a sale and purchase agreement.

Segment revenues by origin are not materially different to segment revenues by destination.

Segment assets include available for sale and equity accounted investments, property, plant and equipment, goodwill, intangible assets, stocks, debtors, other current assets and cash that is not held centrally. Unallocated assets include centrally held cash and other liquid assets and financial assets, as well as interest and tax related prepaid expenses and accrued income.

Segment liabilities include operating liabilities such as accounts payable, overdrafts that are not held centrally, prepaid income, accrued expenses and provisions, excluding those relating to interest and taxes that are held centrally. Unallocated liabilities include loan and finance lease liabilities as well as interest and tax related prepaid income, accrued expenses and provisions.

Capital expenditure includes additions to property, plant and equipment and intangible fixed assets, including additions resulting from acquisitions through business combinations.

Year ended 30 April 2009 

France

UK

Central

Continuing

Discontinued

Darty

Comet

Other

Costs

Group

operations

Group

£m

£m

£m

£m

£m

£m

£m

Revenue 

2,299.9

1,659.6

994.6

-

4,954.1

-

4,954.1

Retail profit/(loss) 

103.9

10.1

(23.2)

(13.8)

77.0

-

77.0

Share of joint venture and associates interest and taxation 

(0.7)

-

-

-

(0.7)

-

(0.7)

Valuation gains/(losses)

-

-

(1.9)

2.2

0.3

-

0.3

Amortisation and impairment of acquisition related intangible assets

-

-

(118.5)

-

(118.5)

-

(118.5)

Exceptional restructuring costs

-

(9.6)

(13.5)

-

(23.1)

-

(23.1)

Operating profit/(loss) 

103.2

0.5

(157.1)

(11.6)

(65.0)

-

(65.0)

Finance costs 

(14.0)

-

(14.0)

Finance income 

6.5

-

6.5

Exceptional finance costs

(9.3)

-

(9.3)

Finance costs - net 

(16.8)

-

(16.8)

Loss before income tax 

(81.8)

-

(81.8)

Income tax credit

(32.8)

-

(32.8)

Taxation credit arising on the sale of discontinued operations

-

0.4

0.4

Profit for the year from discontinued operations

-

2.8

2.8

(Loss)/profit for the year 

(114.6)

3.2

(111.4)

The share of operating profits of the joint venture and associates included within the retail profit for Darty France is £8.0m. The share of post tax profits of the joint venture and associates included within the operating profit for Darty France is £7.3m.

3 Segmental analysis (continued)

France

UK

Continuing

Discontinued

Darty

Comet

Other

Unallocated

Group

operations

Group

£m

£m

£m

£m

£m

£m

£m

Segmental assets 

867.9

363.8

360.1

190.5

1,782.3

-

1,782.3

Segmental liabilities 

(745.1)

(360.0)

(212.8)

(261.9)

(1,579.8)

-

(1,579.8)

Investments in equity accounted joint ventures and associates of £21.0m are included within the segment assets of Darty France. 

Other segment items 

Capital expenditure

Property, plant and equipment

47.0

23.1

26.8

0.9

97.8

-

97.8

Intangible assets 

24.4

14.7

3.6

0.1

42.8

-

42.8

Depreciation 

(35.1)

(20.6)

(16.6)

(1.0)

(73.3)

-

(73.3)

Amortisation of intangible assets 

(14.0)

(6.0)

(2.7)

-

(22.7)

-

(22.7)

Impairment losses - property, plant and equipment

-

(2.0)

(6.3)

-

(8.3)

-

(8.3)

Impairment losses - goodwill and intangible assets 

-

-

(116.2)

-

(116.2)

-

(116.2)

Reversal of impairment losses - property, plant and equipment

-

0.8

-

-

0.8 

-

0.8 

15 months ended 30 April 2008 

France 

Darty

£m

UK

Comet

£m

Other

£m

Central

Costs

£m

Continuing Group

£m 

Discontinued operations

£m

Group

£m

Revenue 

2,371.0

2,086.7

898.9

-

5,356.6 

782.8

6,139.4

Retail profit/(loss) 

121.9

40.4

(4.3)

(14.8)

143.2

56.7

199.9

Share of joint venture and associates interest and taxation 

(0.6)

 - 

 - 

 - 

(0.6)

(3.7)

(4.3)

Valuation losses

 - 

 - 

 - 

(0.6)

(0.6)

 - 

(0.6)

Amortisation and impairment of acquisition related intangible assets

 - 

 - 

(0.9)

(0.1)

(1.0)

 - 

(1.0)

Operating profit/(loss)

121.3

40.4

(5.2)

(15.5)

141.0

53.0

194.0

Finance costs

(23.5)

(2.8)

(26.3)

Finance income

11.9

1.0

12.9

Exceptional finance costs

(1.5)

-

(1.5)

Finance costs - net

(13.1)

(1.8)

(14.9)

Profit before income tax

127.9

51.2

179.1

Income tax expense

(45.0)

(17.4)

(62.4)

Taxation credit arising on the sale of discontinued operations

-

1.8

1.8

Pre-tax profit on disposal

-

1.1

1.1

Profit for the period 

82.9

36.7

119.6

The share of operating profits of the joint venture and associates included within the retail profit for Darty France and discontinued operations are £7.5m and £10.6m respectively. The share of post tax profits of the joint venture and associates included within the operating profit for Darty France and discontinued operations are £6.9m and £6.9m respectively.

3 Segmental analysis (continued)

France

UK

Continuing

Discontinued

Darty

Comet

Other

Unallocated

Group

operations

Group

£m

£m

£m

£m

£m

£m

£m

Segmental assets 

806.9

384.1

438.7

173.9

1,803.6

-

1,803.6

Segmental liabilities 

(634.5)

(373.2)

(193.8)

(202.4)

(1,403.9)

-

(1,403.9)

Investments in equity accounted joint ventures and associates of £16.9m are included within the segment assets of Darty France.

Other segment items 

Capital expenditure

Property, plant and equipment

44.8

44.6

35.2

-

124.6

26.8

151.4

Intangible assets

27.4

-

111.4

0.1

138.9

18.9

157.8

Depreciation

(34.0)

(31.1)

(14.3)

(2.0)

(81.4)

(21.3)

(102.7)

Amortisation of intangible assets

(7.4)

-

(2.0)

(0.2)

(9.6)

(0.5)

(10.1)

Impairment losses - property, plant and equipment and intangible fixed assets 

-

-

(1.0)

-

(1.0)

(0.7)

(1.7)

4 Continuing Group finance costs 

Year  ended 

30 April 

2009

 15 months ended 

30 April 

2008

£m

£m

Interest payable on bank borrowings 

13.2

18.8

Interest payable on finance leases 

0.2

0.3

Net interest on pension schemes 

3.8

1.9

Foreign exchange (gains)/losses 

(3.2)

2.5

Total finance costs before exceptional finance costs

14.0

23.5

Exceptional finance costs

9.3

1.5

Total finance costs

23.3

25.0

The foreign exchange losses arise on the retranslation of short term deposits denominated in a currency other than the operation's functional currency.

Finance costs relating to discontinued operations for the year were £nil (15 months ended 30 April 2008: £2.8m). 

Exceptional finance costs include movements in fair value of investments held in cash and cash equivalents and other investments in accordance with IAS 39 (£9.0m, 2008: £1.5m) and the write off of arrangement fees relating to the Group's 2005 facility agreement, renegotiated in September 2008 (£0.3m, 2008: £nil). These costs are exceptional by virtue of their size or nature.

5 Continuing Group finance income 

Year  ended 

30 April 

2009

15 months ended 

30 April 

2008

£m

£m

Bank and other interest receivable 

6.5

11.9

Finance income relating to discontinued operations for the year was £nil (15 months ended 30 April 2008: £1.0m).

7 Dividends

 Year ended 

30 April 

2009

15 months ended 

30 April 

2008

£m

£m

Final paid 2008: 3.60p (2007: 10.05p) per share

19.1

53.2

Interim paid 

66.4

18.5

85.5

71.7

The retained loss for the year to 30 April 2009 amounts to £111.4 million (15 months to 30 April 2008: £120.2 million profit). An interim dividend of 1.75 pence was paid to the ordinary shareholders of the Company on 3 April 2009. In addition the Board will also recommend at the forthcoming Annual General Meeting, the payment of a final dividend of 3.25 pence (which will total £17.2m), payable on 9 October 2009 in relation to the year ending 30 April 2009.

The final dividend, once approved, will be paid to those persons on the Register of Members at the close of business on 18 September 2009.