26th Mar 2009 07:00
|
Consolidated income statement |
|||||||
|
For the financial year ended 31 January 2009 |
|||||||
|
2007/08 |
|||||||
|
2008/09 |
Restated |
||||||
|
Before |
Exceptional |
Before |
Exceptional |
||||
|
exceptional |
items |
exceptional |
items |
||||
|
£ millions |
Notes |
items |
(note 4) |
Total |
items |
(note 4) |
Total |
|
Revenue |
3 |
10,026 |
- |
10,026 |
9,050 |
- |
9,050 |
|
Cost of sales |
(6,504) |
(21) |
(6,525) |
(5,905) |
- |
(5,905) |
|
|
Gross profit |
|
3,522 |
(21) |
3,501 |
3,145 |
- |
3,145 |
|
Selling and distribution expenses |
(2,624) |
(105) |
(2,729) |
(2,313) |
(35) |
(2,348) |
|
|
Administrative expenses |
(496) |
(124) |
(620) |
(449) |
- |
(449) |
|
|
Other income |
22 |
13 |
35 |
22 |
44 |
66 |
|
|
Share of post-tax results of joint ventures and associates |
3 |
22 |
(36) |
(14) |
19 |
(5) |
14 |
|
Operating profit |
|
446 |
(273) |
173 |
424 |
4 |
428 |
|
Analysed as: |
|
|
|||||
|
Retail profit |
3 |
503 |
(113) |
390 |
469 |
(1) |
468 |
|
Impairment of goodwill and investment in associate |
- |
(160) |
(160) |
- |
- |
- |
|
|
Central costs |
(41) |
- |
(41) |
(40) |
5 |
(35) |
|
|
Share of interest and tax of joint ventures and associates |
|
(16) |
- |
(16) |
(5) |
- |
(5) |
|
Finance costs |
(119) |
- |
(119) |
(95) |
- |
(95) |
|
|
Finance income |
|
36 |
- |
36 |
33 |
- |
33 |
|
Net finance costs |
5 |
(83) |
- |
(83) |
(62) |
- |
(62) |
|
Profit before taxation |
|
363 |
(273) |
90 |
362 |
4 |
366 |
|
Income tax expense |
6 |
(95) |
7 |
(88) |
(116) |
2 |
(114) |
|
Profit from continuing operations |
268 |
(266) |
2 |
246 |
6 |
252 |
|
|
Profit from discontinued operations |
13 |
26 |
178 |
204 |
20 |
- |
20 |
|
Profit for the year |
|
294 |
(88) |
206 |
266 |
6 |
272 |
|
Attributable to: |
|||||||
|
Equity shareholders of the Company |
209 |
274 |
|||||
|
Minority interests |
(3) |
|
|
(2) |
|||
|
|
|
206 |
272 |
||||
|
Earnings per share |
7 |
||||||
|
Total operations: |
|||||||
|
Basic |
8.9p |
11.7p |
|||||
|
Diluted |
8.9p |
|
|
11.7p |
|||
|
Continuing operations: |
|||||||
|
Basic |
0.2p |
10.9p |
|||||
|
Diluted |
0.2p |
10.9p |
|||||
|
Adjusted basic |
11.0p |
10.6p |
|||||
The proposed final dividend for the financial year ended 31 January 2009, subject to approval by shareholders at the Annual General Meeting, is 3.4p per share.
|
Consolidated statement of recognised income and expense |
||||
|
For the financial year ended 31 January 2009 |
||||
|
£ millions |
|
Notes |
2008/09 |
2007/08 |
|
Actuarial (losses)/gains on post employment benefits |
(191) |
47 |
||
|
Currency translation differences |
||||
|
Group |
159 |
206 |
||
|
Joint ventures and associates |
32 |
26 |
||
|
(Gains)/losses transferred to income statement |
(80) |
3 |
||
|
Cash flow hedges |
||||
|
Fair value gains/(losses) |
33 |
(6) |
||
|
(Gains)/losses transferred to inventories |
(10) |
8 |
||
|
Tax on items recognised directly in equity |
|
35 |
(19) |
|
|
Net (expense)/ income recognised directly in equity |
(22) |
265 |
||
|
Profit for the year |
|
|
206 |
272 |
|
Total recognised income for the year |
|
|
184 |
537 |
|
Attributable to: |
||||
|
Equity shareholders of the Company |
10 |
180 |
537 |
|
|
Minority interests |
|
|
4 |
- |
|
|
|
|
184 |
537 |
|
Consolidated balance sheet |
|||
|
As at 31 January 2009 |
|||
|
£ millions |
Notes |
2008/09 |
2007/08 |
|
Non-current assets |
|||
|
Goodwill |
2,396 |
2,532 |
|
|
Other intangible assets |
73 |
85 |
|
|
Property, plant and equipment |
3,699 |
3,698 |
|
|
Investment property |
24 |
29 |
|
|
Investments in joint ventures and associates |
219 |
204 |
|
|
Post employment benefits |
9 |
- |
110 |
|
Deferred tax assets |
26 |
25 |
|
|
Derivatives |
180 |
66 |
|
|
Other receivables |
17 |
13 |
|
|
6,634 |
6,762 |
||
|
Current assets |
|||
|
Inventories |
1,792 |
1,873 |
|
|
Trade and other receivables |
508 |
533 |
|
|
Derivatives |
107 |
5 |
|
|
Current tax assets |
33 |
1 |
|
|
Other investments |
- |
11 |
|
|
Cash and cash equivalents |
1,157 |
218 |
|
|
|
|
3,597 |
2,641 |
|
Total assets |
10,231 |
9,403 |
|
|
Current liabilities |
|||
|
Trade and other payables |
(2,362) |
(2,238) |
|
|
Borrowings |
(389) |
(191) |
|
|
Derivatives |
(38) |
(10) |
|
|
Current tax liabilities |
|
(206) |
(89) |
|
Provisions |
(69) |
(47) |
|
|
|
|
(3,064) |
(2,575) |
|
Non-current liabilities |
|||
|
Other payables |
(33) |
(32) |
|
|
Borrowings |
(1,907) |
(1,620) |
|
|
Derivatives |
(76) |
(52) |
|
|
Deferred tax liabilities |
(226) |
(318) |
|
|
Provisions |
(53) |
(49) |
|
|
Post employment benefits |
9 |
(74) |
(33) |
|
|
|
(2,369) |
(2,104) |
|
Total liabilities |
(5,433) |
(4,679) |
|
|
|
|
|
|
|
Net assets |
|
4,798 |
4,724 |
|
Equity |
|||
|
Share capital |
371 |
371 |
|
|
Share premium |
2,188 |
2,188 |
|
|
Own shares held |
(57) |
(66) |
|
|
Reserves |
10 |
2,281 |
2,220 |
|
Minority interests |
15 |
11 |
|
|
Total equity |
|
4,798 |
4,724 |
The financial statements were approved by the Board of Directors on 25 March 2009 and signed on its behalf by:
Ian Cheshire Kevin O'Byrne
Group Chief Executive Group Finance Director
|
Consolidated cash flow statement |
|||
|
For the financial year ended 31 January 2009 |
|||
|
£ millions |
Notes |
2008/09 |
2007/08 |
|
Operating activities |
|||
|
Cash generated by operations |
11 |
867 |
513 |
|
Income tax paid |
(77) |
(69) |
|
|
Net cash flows from operating activities |
790 |
444 |
|
|
Investing activities |
|||
|
Purchase of minority interests |
(7) |
(1) |
|
|
Purchase of property, plant and equipment, investment property and intangible assets |
(390) |
(513) |
|
|
Disposal of property, plant and equipment, investment property and intangible assets |
62 |
117 |
|
|
Disposal of investment in joint venture |
- |
50 |
|
|
Disposal of other investments |
12 |
21 |
|
|
Dividends received from joint ventures and associates |
3 |
6 |
|
|
Net cash flows from investing activities |
(320) |
(320) |
|
|
Financing activities |
|||
|
Interest received |
22 |
22 |
|
|
Interest paid |
(111) |
(89) |
|
|
Interest element of finance lease rental payments |
(5) |
(6) |
|
|
Net (payment)/receipt on forward foreign exchange contracts |
(5) |
6 |
|
|
Net (payment)/receipt of bank loans |
(37) |
136 |
|
|
Capital element of finance lease rental payments |
(12) |
(11) |
|
|
Issue of share capital to equity shareholders of the Company |
- |
3 |
|
|
Issue of share capital to minority interests |
1 |
3 |
|
|
Disposal of own shares held |
- |
2 |
|
|
Dividends paid to equity shareholders of the Company |
(125) |
(249) |
|
|
Dividends paid to minority interests |
(1) |
(4) |
|
|
Net cash flows from financing activities |
(273) |
(187) |
|
|
|
|
||
|
Net increase/(decrease) in cash and cash equivalents and bank overdrafts |
|||
|
from continuing operations |
197 |
(63) |
|
|
Net cash flows from operating activities |
23 |
21 |
|
|
Net cash flows from investing activities |
522 |
(15) |
|
|
Net cash flows from financing activities |
1 |
1 |
|
|
Net increase in cash and cash equivalents and bank overdrafts |
|||
|
from discontinued operations |
13 |
546 |
7 |
|
Net increase/(decrease) in cash and cash equivalents and bank overdrafts |
743 |
(56) |
|
|
Cash and cash equivalents and bank overdrafts at beginning of year |
195 |
245 |
|
|
Exchange differences |
56 |
6 |
|
|
Cash and cash equivalents and bank overdrafts at end of year |
12 |
994 |
195 |
Notes to the consolidated financial statements
1. General information
Kingfisher plc (the Company) and its subsidiaries (together the Group) retail home improvement products through a network of retail sites, located mainly in the United Kingdom, continental Europe and China.
Kingfisher plc is a Company incorporated in the United Kingdom. The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.
The company has a primary listing on the London Stock Exchange and a secondary listing on the Paris Bourse.
2. Basis of preparation
The consolidated financial statements of the Company and its subsidiaries are made up to the nearest Saturday to 31 January each year. The current financial year is the 52 weeks ended 31 January 2009. The comparative financial year is the 52 weeks ended 2 February 2008. This only impacts the UK operations with all of the other operations reporting on a calendar basis as a result of local statutory requirements.
The financial information which comprises the consolidated income statement, consolidated statement of recognised income and expense, consolidated balance sheet, consolidated cash flow statement and related notes do not constitute the Group's Annual Report and Accounts. The auditors have reported on the Group's statutory accounts for each of the years 2008/09 and 2007/08 under section 235 of 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 accounts for 2007/08 have been delivered to the Registrar of Companies and the statutory accounts for 2008/09 will be filed with the Registrar in due course. Copies of the Annual Report and Accounts will be posted to shareholders during the week beginning 27 April 2009.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the use of valuations for certain financial instruments, share-based payments and post employment benefits.
No new standards, amendments or interpretations that became effective in these financial statements had an impact on the Group's results.
The comparatives have been restated for the discontinuance of the Castorama Italy business (note 13).
Use of adjusted measures
Kingfisher believes that retail profit, adjusted pre-tax profit, adjusted post-tax profit and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These measures are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items' and 'adjusted' are not defined terms under IFRS and may therefore not be comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, GAAP measurements of profit. The term 'adjusted' refers to the relevant measure being reported for continuing operations excluding exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and prior year tax items. Retail profit is defined as continuing operating profit before central costs (principally the costs of the Group's head office), exceptional items, amortisation of acquisition intangibles and the Group's share of interest and tax of joint ventures and associates.
The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group's underlying business performance. The principal items which will be included as exceptional items are:
non trading items included in operating profit such as profits and losses on the disposal, closure or impairment of subsidiaries, associates and investments which do not form part of the Group's trading activities;
profits and losses on the disposal of properties; and
the costs of significant restructuring and incremental acquisition integration costs.
3. Segmental analysis
Income statement
|
Year ended 31 January 2009 |
||||||
|
£ millions |
UnitedKingdom |
France |
Other International |
Total |
||
|
Poland |
Other |
|||||
|
External revenue |
4,279 |
3,888 |
1,036 |
823 |
10,026 |
|
|
Retail profit |
129 |
283 |
124 |
(33) |
503 |
|
|
Exceptional items |
(18) |
13 |
- |
(268) |
(273) |
|
|
Less: Share of operating profit of joint ventures and associates |
- |
(1) |
- |
(1) |
(2) |
|
|
Segment result before joint ventures and associates |
111 |
295 |
124 |
(302) |
228 |
|
|
Share of post-tax results of joint ventures and associates |
- |
1 |
- |
(15) |
(14) |
|
|
Segment result |
111 |
296 |
124 |
(317) |
214 |
|
|
Central costs |
(41) |
|||||
|
Operating profit |
173 |
|||||
|
Net finance costs |
(83) |
|||||
|
Profit before taxation |
90 |
|||||
|
Income tax expense |
(88) |
|||||
|
Profit from continuing operations |
2 |
|||||
|
Profit from discontinued operations |
204 |
|||||
|
Profit for the year |
206 |
|||||
|
Year ended 2 February 2008 Restated |
||||||
|
£ millions |
UnitedKingdom |
France |
Other International |
Total |
||
|
Poland |
Other |
|||||
|
External revenue |
4,395 |
3,224 |
703 |
728 |
9,050 |
|
|
Retail profit |
153 |
237 |
87 |
(8) |
469 |
|
|
Exceptional items before central costs |
38 |
1 |
- |
(40) |
(1) |
|
|
Less: Share of operating profit of joint ventures and associates |
- |
- |
- |
(19) |
(19) |
|
|
Segment result before joint ventures and associates |
191 |
238 |
87 |
(67) |
449 |
|
|
Share of post-tax results of joint ventures and associates |
- |
- |
- |
14 |
14 |
|
|
Segment result |
191 |
238 |
87 |
(53) |
463 |
|
|
Central costs |
(35) |
|||||
|
Operating profit |
428 |
|||||
|
Net finance costs |
(62) |
|||||
|
Profit before taxation |
366 |
|||||
|
Income tax expense |
(114) |
|||||
|
Profit from continuing operations |
252 |
|||||
|
Profit from discontinued operations |
20 |
|||||
|
Profit for the year |
272 |
|||||
The Group's primary reporting segments are geographic, with the Group operating in three main geographical areas, being the UK, France and Other International. The Group only has one business segment, being retail, therefore no secondary segmental disclosure is given.
The Other International segment consists of Poland, China, Ireland, Spain, Russia, the joint venture Koçtaş in Turkey and the associate Hornbach which has operations in Germany and other European countries. Taiwan, South Korea and the former Asia head office were sold or closed in the prior year and so are included in comparatives only. The 'Rest of Europe' and 'Asia' segments previously reported have been combined into the 'Other International' segment in order to align external reporting with internal management reporting. Poland has been shown separately as it meets the reportable segment criteria as prescribed by IAS 14 'Segment Reporting'.
Central costs have not been allocated. These principally comprise the costs of the Group's head office.
4. Exceptional items
|
£ millions |
2008/09 |
2007/08 |
|
Included within cost of sales |
||
|
China restructuring |
(21) |
- |
|
(21) |
- |
|
|
Included within selling and distribution expenses |
||
|
China restructuring |
(86) |
(22) |
|
UK restructuring |
(19) |
- |
|
Loss on closure of B&Q Home in South Korea and Asia head office |
- |
(13) |
|
(105) |
(35) |
|
|
Included within administrative expenses |
||
|
Impairment of goodwill |
(124) |
- |
|
(124) |
- |
|
|
Included within other income |
||
|
Profit on disposal of properties |
13 |
39 |
|
Recovery of loan receivable previously written off |
- |
5 |
|
|
13 |
44 |
|
Included within share of post-tax results of joint ventures and associates |
||
|
Impairment of investment in Hornbach |
(36) |
- |
|
Gross profit on disposal of B&Q Taiwan joint venture before goodwill |
- |
27 |
|
Goodwill attributed to B&Q Taiwan joint venture |
- |
(32) |
|
(36) |
(5) |
|
|
Exceptional items before tax |
(273) |
4 |
|
Tax on exceptional items (note 6) |
7 |
2 |
|
Exceptional items - continuing operations |
(266) |
6 |
|
Exceptional items - discontinued operations (note 13) |
178 |
- |
|
Exceptional items |
(88) |
6 |
An exceptional loss of £107m has been recorded relating to the B&Q China turnaround plan. The plan involves rationalising the store portfolio from 63 to 41 and then revamping the remaining stores, 17 of which will also be downsized. The exceptional loss comprises store asset impairments, lease exits, inventory write downs and employee redundancy costs. The total charge included £19m related to the termination of leases, which is included within restructuring provisions, £55m related to the impairment of property, plant and equipment and £21m related to the write down of inventories.
The Group has recorded an exceptional loss of £19m following the announcement that Trade Depot in the UK would be closed, which includes a loss on disposal of properties of £6m.
An exceptional loss of £124m has been recorded on the impairment of goodwill in China based on a review of its recoverable amount performed at the year end. The goodwill balance, whose cost increased from £84m at the beginning of the year to £124m at the year end due to foreign exchange differences, has now been fully written down.
The Group has recorded an exceptional profit of £13m on disposal of properties (2007/08: £39m profit).
An exceptional loss of £36m has been recorded on the write down of the Group's investment in Hornbach.
5. Net finance costs
|
£ millions |
2008/09 |
2007/08 |
|
Bank overdrafts and bank loans |
(23) |
(15) |
|
Medium Term Notes and other fixed term debt |
(86) |
(79) |
|
Financing fair value remeasurements |
(5) |
5 |
|
Finance leases |
(5) |
(6) |
|
Unwinding of discount on provisions |
(3) |
(3) |
|
Capitalised interest |
3 |
3 |
|
Finance costs |
(119) |
(95) |
|
Cash and cash equivalents and other investments |
23 |
21 |
|
Expected net interest return on defined benefit pension schemes |
13 |
12 |
|
Finance income |
36 |
33 |
|
Net finance costs - continuing operations |
(83) |
(62) |
6. Income tax expense
|
2007/08 |
||
|
£ millions |
2008/09 |
Restated |
|
UK corporation tax |
||
|
Current tax on profits for the year |
34 |
19 |
|
Adjustments in respect of prior years |
(14) |
(29) |
|
20 |
(10) |
|
|
Double taxation relief |
- |
(1) |
|
20 |
(11) |
|
|
Overseas tax |
||
|
Current tax on profits for the year |
111 |
88 |
|
Adjustments in respect of prior years |
6 |
- |
|
117 |
88 |
|
|
Deferred tax |
||
|
Current year |
(41) |
19 |
|
Adjustments in respect of prior years |
(8) |
21 |
|
Adjustments in respect of changes in tax rates |
- |
(3) |
|
(49) |
37 |
|
|
Income tax expense - continuing operations |
88 |
114 |
The effective rate of tax on profit from continuing operations before exceptional items and excluding tax adjustments in respect of prior years and changes in tax rates is 31% (2007/08 restated: 31%). Tax on exceptional items is a credit of £7m, all of which relates to current year items. In 2007/08 tax on exceptional items was a credit of £2m, of which a £14m charge related to current year items and a £16m credit related to prior year items. Excluding exceptional items the prior year adjustment in 2007/08 was a charge of £5m.
7. Earnings per share
|
|
2008/09 |
|
2007/08 Restated |
|||
|
Earnings |
Weighted average number of shares |
Earnings per share |
Earnings |
Weighted average number of shares |
Earnings per share |
|
|
£ millions |
millions |
pence |
£ millions |
millions |
pence |
|
|
Total operations: |
||||||
|
Basic earnings per share |
209 |
2,345 |
8.9 |
274 |
2,342 |
11.7 |
|
Dilutive share options |
9 |
- |
9 |
- |
||
|
Diluted earnings per share |
209 |
2,354 |
8.9 |
274 |
2,351 |
11.7 |
|
Continuing operations: |
||||||
|
Basic earnings per share |
5 |
2,345 |
0.2 |
254 |
2,342 |
10.9 |
|
Dilutive share options |
9 |
- |
9 |
- |
||
|
Diluted earnings per share |
5 |
2,354 |
0.2 |
254 |
2,351 |
10.9 |
|
Basic earnings per share |
5 |
2,345 |
0.2 |
254 |
2,342 |
10.9 |
|
Exceptional items |
273 |
11.7 |
(4) |
(0.2) |
||
|
Tax on exceptional and prior year items |
(23) |
(1.0) |
3 |
0.1 |
||
|
Financing fair value remeasurements |
5 |
0.2 |
(5) |
(0.2) |
||
|
Tax on financing fair value remeasurements |
(2) |
(0.1) |
2 |
- |
||
|
Adjusted basic earnings per share |
258 |
2,345 |
11.0 |
250 |
2,342 |
10.6 |
|
Diluted earnings per share |
5 |
2,354 |
0.2 |
254 |
2,351 |
10.9 |
|
Exceptional items |
273 |
11.7 |
(4) |
(0.2) |
||
|
Tax on exceptional and prior year items |
(23) |
(1.0) |
3 |
0.1 |
||
|
Financing fair value remeasurements |
5 |
0.2 |
(5) |
(0.2) |
||
|
Tax on financing fair value remeasurements |
(2) |
(0.1) |
2 |
- |
||
|
Adjusted diluted earnings per share |
258 |
2,354 |
11.0 |
250 |
2,351 |
10.6 |
Basic earnings per share is calculated by dividing the profit for the year attributable to equity shareholders of the Company by the weighted average number of shares in issue during the year, excluding those held in the Employee Share Ownership Plan Trust (ESOP) which for the purpose of this calculation are treated as cancelled.
For diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of all dilutive potential ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's shares during the year.
8. Dividends
|
£ millions |
2008/09 |
2007/08 |
|
Dividends to equity shareholders of the Company |
||
|
Final dividend for the year ended 2 February 2008 of 3.4p per share (3 February 2007: 6.8p per share) |
80 |
159 |
|
Interim dividend for the year ended 31 January 2009 of 1.925p per share (2 February 2008: 3.85p per share) |
45 |
90 |
|
|
125 |
249 |
The proposed final dividend for the year ended 31 January 2009 of 3.4p per share is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
9. Post employment benefits
|
2008/09 |
2007/08 |
|||||
|
£ millions |
UK |
Other |
Total |
UK |
Other |
Total |
|
Surplus/(deficit) in scheme at beginning of year |
110 |
(33) |
77 |
(28) |
(27) |
(55) |
|
Current service cost |
(20) |
(3) |
(23) |
(26) |
(3) |
(29) |
|
Settlements, curtailments and termination benefits |
- |
- |
- |
- |
1 |
1 |
|
Interest on defined benefit obligations |
(82) |
(2) |
(84) |
(74) |
(2) |
(76) |
|
Expected return on pension scheme assets |
97 |
- |
97 |
88 |
- |
88 |
|
Actuarial (losses)/gains |
(186) |
(5) |
(191) |
49 |
(2) |
47 |
|
Contributions paid by employer |
41 |
7 |
48 |
101 |
2 |
103 |
|
Disposal of subsidiaries |
- |
7 |
7 |
- |
- |
- |
|
Exchange differences |
- |
(5) |
(5) |
- |
(2) |
(2) |
|
(Deficit)/surplus in scheme at end of year |
(40) |
(34) |
(74) |
110 |
(33) |
77 |
The assumptions used in calculating the costs and obligations of the Group's defined benefit pension schemes are set by the Directors after consultation with independent professionally qualified actuaries. The assumptions are based on the conditions at the time and changes in these assumptions can lead to significant movements in the estimated obligations, as illustrated in the sensitivity analysis.
The UK scheme discount rate is based on the yield on the iBoxx over 15 year AA-rated Sterling corporate bond index adjusted for the difference in term between iBoxx and scheme liabilities. The overall expected rate of return on scheme assets reflects market expectations at the valuation date of long term asset returns and the mix of assets in the schemes.
|
2008/09 |
2007/08 |
||||
|
Annual % rate |
UK |
Other |
UK |
Other |
|
|
Discount rate |
|
6.5 |
5.3 to 5.5 |
6.2 |
5.3 to 5.5 |
|
Salary escalation |
4.3 |
2.0 to 6.6 |
4.1 |
2.0 to 6.6 |
|
|
Rate of pension increases |
3.5 |
- |
3.3 |
- |
|
|
Price inflation |
|
3.5 |
2.0 to 2.5 |
3.3 |
2.0 to 2.5 |
|
2008/09 |
2007/08 |
||||
|
% rate of return |
|
UK |
Other |
UK |
Other |
|
Equities |
8.7 |
- |
8.1 |
- |
|
|
Bonds |
5.6 |
- |
5.3 |
- |
|
|
Property |
7.1 |
- |
6.7 |
- |
|
|
Other |
|
4.3 |
3.5 |
4.3 |
4.0 |
|
Overall expected rate of return |
|
6.7 |
3.5 |
6.8 |
4.0 |
For the UK scheme, the mortality assumptions used in the actuarial valuations have been selected with regard to the characteristics and experience of the membership of the scheme from 2004 to 2007. The assumptions for life expectancy of UK scheme members are as follows:
|
Years
|
2008/09
|
2007/08
|
|
Age to which current pensioners are expected to live (60 now)
|
|
|
|
- Male
|
87.2
|
87.2
|
|
- Female
|
85.9
|
85.9
|
|
Age to which future pensioners are expected to live (60 in 15 years time)
|
|
|
|
- Male
|
88.8
|
88.8
|
|
- Female
|
87.1
|
87.1
|
The following sensitivity analysis for the UK scheme shows the estimated impact on obligations resulting from changes to key actuarial assumptions, whilst holding all other assumptions constant.
|
Assumption
|
Change in assumption
|
Impact on defined benefit obligation
|
|
Discount rate
|
Increase/decrease by 0.1%
|
Decrease/increase by £26m
|
|
Salary escalation
|
Increase/decrease by 0.1%
|
Increase/decrease by £2m
|
|
Rate of pension increases
|
Increase/decrease by 0.1%
|
Increase/decrease by £14m
|
|
Price inflation
|
Increase/decrease by 0.1%
|
Increase/decrease by £24m
|
|
Mortality
|
Increase in life expectancy by one year
|
Increase by £40m
|
10. Reserves
|
Retained |
Translation |
Cash flow |
Other |
||
|
£ millions |
earnings |
reserve |
hedge reserve |
reserves |
Reserves |
|
At 3 February 2008 |
1,815 |
248 |
(2) |
159 |
2,220 |
|
Actuarial losses on post employment benefits |
(191) |
- |
- |
- |
(191) |
|
Currency translation differences - Group excluding minority interests |
- |
152 |
- |
- |
152 |
|
Currency translation differences - joint ventures and associates |
- |
32 |
- |
- |
32 |
|
Currency translation differences - gains transferred to income statement |
- |
(80) |
- |
- |
(80) |
|
Cash flow hedges - fair value gains |
- |
- |
33 |
- |
33 |
|
Cash flow hedges - gains transferred to inventories |
- |
- |
(10) |
- |
(10) |
|
Tax on items recognised directly in equity |
54 |
(12) |
(7) |
- |
35 |
|
Net (expense)/income recognised directly in equity |
(137) |
92 |
16 |
- |
(29) |
|
Profit for the year |
209 |
- |
- |
- |
209 |
|
Total recognised income for the year |
72 |
92 |
16 |
- |
180 |
|
Share-based compensation |
15 |
- |
- |
- |
15 |
|
Own shares disposed |
(9) |
- |
- |
- |
(9) |
|
Dividends |
(125) |
- |
- |
- |
(125) |
|
At 31 January 2009 |
1,768 |
340 |
14 |
159 |
2,281 |
|
At 4 February 2007 |
1,763 |
20 |
(3) |
159 |
1,939 |
|
Actuarial gains on post employment benefits |
47 |
- |
- |
- |
47 |
|
Currency translation differences - Group excluding minority interests |
- |
204 |
- |
- |
204 |
|
Currency translation differences - joint ventures and associates |
- |
26 |
- |
- |
26 |
|
Currency translation differences - losses transferred to income statement |
- |
3 |
- |
- |
3 |
|
Cash flow hedges - fair value losses |
- |
- |
(6) |
- |
(6) |
|
Cash flow hedges - losses transferred to inventories |
- |
- |
8 |
- |
8 |
|
Tax on items recognised directly in equity |
(13) |
(5) |
(1) |
- |
(19) |
|
Net income recognised directly in equity |
34 |
228 |
1 |
- |
263 |
|
Profit for the year |
274 |
- |
- |
- |
274 |
|
Total recognised income for the year |
308 |
228 |
1 |
- |
537 |
|
Share-based compensation |
6 |
- |
- |
- |
6 |
|
Own shares disposed |
(13) |
- |
- |
- |
(13) |
|
Dividends |
(249) |
- |
- |
- |
(249) |
|
At 2 February 2008 |
1,815 |
248 |
(2) |
159 |
2,220 |
11. Cash generated by operations
|
£ millions |
2008/09 |
2007/08 Restated |
|
Operating profit |
173 |
428 |
|
Share of post-tax results of joint ventures and associates |
14 |
(14) |
|
Amortisation and depreciation |
265 |
226 |
|
Impairment losses |
185 |
19 |
|
Loss/(profit) on disposal of property, plant and equipment, investment property and intangible assets |
11 |
(29) |
|
Share-based compensation charge |
15 |
6 |
|
Decrease/(increase) in inventories |
169 |
(216) |
|
Decrease in trade and other receivables |
69 |
4 |
|
(Decrease)/increase in trade and other payables |
(23) |
178 |
|
Increase/(decrease) in provisions |
14 |
(16) |
|
Movement in post employment benefits |
(25) |
(73) |
|
Cash generated by operations - continuing operations |
867 |
513 |
12. Net debt
Net debt comprises borrowings and financing derivatives (excluding accrued interest), less cash and cash equivalents and current other investments. Financing derivatives are those that relate to underlying items of a financing nature.
|
£ millions |
2008/09 |
2007/08 |
|
Cash and cash equivalents |
1,157 |
218 |
|
Bank overdrafts |
(163) |
(23) |
|
Cash and cash equivalents and bank overdrafts |
994 |
195 |
|
Current other investments |
- |
11 |
|
Bank loans |
(307) |
(283) |
|
Medium Term Notes and other fixed term debt |
(1,757) |
(1,436) |
|
Financing derivatives |
135 |
23 |
|
Finance leases |
(69) |
(69) |
|
Net debt |
(1,004) |
(1,559) |
|
£ millions |
2008/09 |
2007/08 |
|
Net debt at beginning of year |
(1,559) |
(1,294) |
|
Net increase/(decrease) in cash and cash equivalents and bank overdrafts |
743 |
(56) |
|
Disposal of current other investments |
(12) |
(21) |
|
Net payment/(receipt) on forward foreign exchange contracts |
5 |
(6) |
|
Net payment/(receipt) of bank loans |
37 |
(136) |
|
Capital element of finance lease rental payments |
12 |
11 |
|
Cash flow movement in net debt |
785 |
(208) |
|
Exchange differences and other non-cash movements |
(230) |
(57) |
|
Net debt at end of year |
(1,004) |
(1,559) |
13. Discontinued operations
On 30 January 2009 Kingfisher completed the sale of its Castorama Italy business to Groupe Adeo S.A. The disposed business has been classified as a discontinued operation in these financial statements. A summary of the results, earnings per share and cash flows of the Castorama Italy business is set out below:
|
£ millions |
2008/09 |
2007/08 |
|
|
Revenue |
368 |
314 |
|
|
Operating expenses |
(334) |
(285) |
|
|
Operating profit |
34 |
29 |
|
|
Net finance income |
1 |
- |
|
|
Profit before taxation |
35 |
29 |
|
|
Income tax expense |
(9) |
(9) |
|
|
Profit from discontinued operations before exceptional profit on disposal |
26 |
20 |
|
|
Exceptional profit on disposal (see below) |
178 |
- |
|
|
Profit from discontinued operations |
204 |
20 |
|
Pence |
2008/09 |
2007/08 |
|
|
Basic earnings per share |
8.7 |
0.8 |
|
|
Diluted earnings per share |
8.7 |
0.8 |
|
£ millions |
2008/09 |
2007/08 |
|
|
Net cash flows from operating activities before tax paid on disposal |
29 |
21 |
|
|
Net cash flows from investing activities before proceeds received on disposal |
(12) |
(15) |
|
|
Net cash flows from financing activities |
1 |
1 |
|
|
Net increase in cash and cash equivalents and bank overdrafts from discontinued operations before proceeds received and tax paid on disposal |
18 |
7 |
|
|
Proceeds received on disposal (see below) |
534 |
- |
|
|
Tax paid on disposal |
(6) |
- |
|
|
Net increase in cash and cash equivalents and bank overdrafts from discontinued operations |
546 |
7 |
The Castorama Italy business was classified as a disposal group held for sale from 1 August 2008 (the date of announcement of the agreement to sell) up to 30 January 2009 (the date the sale was completed). Accordingly, depreciation and amortisation of £6m were not charged with respect to Castorama Italy during this period. If depreciation and amortisation had been charged, operating profit and retail profit for the year would have been £28m.
The profit on disposal is analysed as follows:
|
£ millions |
2008/09 |
|
|
Proceeds (net of cash disposal costs of £4m) before cash and cash equivalents disposed |
548 |
|
|
Cash and cash equivalents disposed |
(14) |
|
|
Proceeds received on disposal |
534 |
|
|
Other disposal costs |
(6) |
|
|
Net proceeds on disposal |
528 |
|
|
Net assets disposed excluding cash and cash equivalents (see below) |
(404) |
|
|
Currency translation gains transferred from translation reserve |
80 |
|
|
Exceptional profit on disposal before tax |
204 |
|
|
Exceptional tax on profit on disposal |
(26) |
|
|
Exceptional profit on disposal |
178 |
|
£ millions |
2008/09 |
|
|
Goodwill |
55 |
|
|
Property, plant and equipment |
386 |
|
|
Inventories, trade and other receivables/(payables) |
13 |
|
|
Deferred tax liabilities |
(45) |
|
|
Post employment benefits |
(7) |
|
|
Other net assets |
2 |
|
|
Net assets disposed excluding cash and cash equivalents |
404 |
Related Shares:
Kingfisher