Half Yearly Results Section 2

Group income statement 

Six months ended 31 October 2009

Six months ended 31 October 2009 (unaudited)

Six months ended 31 October 2008 (unaudited)

Year ended 

30 April 2009 

(audited)

Six months ended 31 October 2009 (unaudited)

Note

£m

£m

£m

€m(1)

Revenue

2

2,347.2

2,180.8

4,954.1

2,673.0

Group operating profit/(loss)

2

12.3

(104.9)

(72.3)

14.0

Share of post tax profit in joint venture and associates

2

2.4

3.2

7.3

2.7

Total operating profit/(loss)

14.7

(101.7)

(65.0)

16.7

Analysed as:

Retail profit (2)

3

24.3

13.0

77.0

27.7

Share of joint venture and associates interest and taxation

3

(0.4)

(0.3)

(0.7)

(0.5)

Valuation (losses)/gains

3

(4.6)

 - 

0.3

(5.2)

Profit on disposal of business operation

8

4.5

 - 

 - 

5.1

Exceptional costs

8

(9.0)

-

(23.1)

(10.3)

Amortisation and impairment of acquisition related intangible assets

8

(0.1)

(114.4)

(118.5)

(0.1)

Total operating profit/(loss)

14.7

(101.7)

(65.0)

16.7

Finance costs

(10.5)

(5.2)

(14.0)

(12.0)

Finance income

1.1

3.1

6.5

1.3

Exceptional finance income/(costs)

0.7

-

(9.3)

0.8

Profit/(loss) before income tax

6.0

(103.8)

(81.8)

6.8

UK taxation

6.0

6.9

6.1

6.8

Overseas taxation

(9.6)

(6.3)

(38.9)

(10.9)

Total Taxation

(3.6)

0.6

(32.8)

(4.1)

Profit/(loss) for the financial period from continuing operations

2.4

(103.2)

(114.6)

2.7

(Loss)/profit for the financial period from discontinued operations

7

(1.8)

2.7

3.2

(2.0)

Profit/(loss) for the financial period

0.6

(100.5)

(111.4)

0.7

Profit/(loss) attributable to:

- Equity shareholders

1.7

(99.9)

(111.4)

1.9

- Minority interests

(1.1)

(0.6)

 - 

(1.2)

0.6

(100.5)

(111.4)

0.7

Earnings/(loss) per share - basic and diluted (pence)

Continuing operations

0.6

(19.4)

(21.7)

0.7

Discontinued operations

(0.3)

0.5

0.6

(0.3)

Total earnings/(loss) per share 

6

0.3

(18.9)

(21.1)

0.4

Earnings/(loss) per share - adjusted (pence)

Continuing operations

2.0

2.2

5.7

2.3

Discontinued operations

(0.3)

0.5

0.6

(0.3)

Total adjusted earnings per share

6

1.7

2.7

6.3

2.0

Notes

1) Income statement information in euros is provided for illustrative purposes only and is translated at the average exchange rate of €1.1388 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 costs, profit on disposal of business operation and amortisation and impairment of acquisition related intangible assets. Retail profit includes any gains or losses arising on the disposal of property, plant and equipment.

3) Adjusted earnings per share excludes the effects of valuation gains and losses on options to acquire minority interests, exceptional costs, exceptional finance costs, profit on disposal of business operation and amortisation and impairment of acquisition related intangible assets (Note 6).

Group statement of comprehensive income 

Six months ended 31 October 2009

 Six months

ended 31

October 2009

(unaudited)

Six months

ended 31

October 2008

(unaudited)

Year ended

30 April

2009

(unaudited)

Six months

ended 31

October 2009

(unaudited)

Note

£m

£m

£m

€m(1)

Profit/(loss) for the period

3

0.6

(100.5)

(111.4)

0.7

Other comprehensive (expense)/ income:

Exchange differences

(0.2)

(0.7)

(0.2)

(0.3)

Foreign exchange recycled to income statement on disposal of foreign operations

8

1.4

-

-

1.6

Actuarial (losses)/gains on retirement benefit obligations

(35.9)

15.7

19.2

(40.9)

Tax on actuarial losses and gains on retirement benefit obligations

10.1

(4.5)

(5.5)

11.6

Available for sale assets - fair value gains/(losses) net of tax

4.9

(8.7)

(14.1)

5.6

Cash flow hedges - fair value gains/(losses) net of tax

0.1

2.2

(0.1)

0.1

Total comprehensive expense for the period

(19.0)

(96.5)

(112.1)

(21.6)

Attributable to:

- Equity shareholders

(18.3)

(95.9)

(112.1)

(20.8)

- Minority interests

(0.7)

(0.6)

 - 

(0.8)

Total comprehensive expense for the period 

(19.0)

(96.5)

(112.1)

(21.6)

Note

1) Statement of recognised income and expenses information in euros is provided for illustrative purposes only and is translated at the average exchange rate of €1.1388 for £1.

Group statement of changes in equity 

Six months ended 31 October 2009

Share

capital

Demerger

and other

reserves

Translation

reserve

Available for

sale

investments

reserve

Retained

earnings

Total

Shareholders

equity

Minority

interest

Total

equity

£m

£m

£m

£m

£m

£m

£m

£m

At 1 May 2009 restated (Note 1)

132.4

732.3

(18.3)

(4.0)

(640.0)

202.4

(0.8)

201.6 

Profit for the period

1.7

1.7

(1.1)

0.6

Other comprehensive income/(expense):

Exchange differences

(0.6)

(0.6)

0.4

(0.2)

Transfer to income statement on disposal of foreign operations

1.4

1.4

1.4

Actuarial losses on retirement benefit obligations

(35.9)

(35.9)

(35.9)

Tax on actuarial losses on retirement benefit obligations

10.1

10.1

10.1

Available for sale assets - Fair value gain net of tax

4.9

4.9

4.9

Cash flow hedges - Fair value gains net of tax

0.1

0.1

0.1

Total comprehensive income/(expense) for the period

-

0.1

0.8

4.9

(24.1)

(18.3)

(0.7)

(19.0)

Transactions with owners:

Dividends

(17.2)

(17.2)

(2.3)

(19.5)

Employee share schemes

0.4

0.4

0.4

Investment in ESOP shares

(0.1)

(0.1)

(0.1)

At 31 October 2009

132.4

732.4

(17.5)

0.9

(681.0)

167.2

(3.8)

163.4

Share

capital

Demerger

and other

reserves

Translation

reserve

Available for

sale

investments

reserve

Retained

earnings

Total

shareholders'

equity

Minority

interest

Total

equity 

£m

£m

£m

£m

£m

£m

£m

£m 

At 1 May 2008 as reported

132.4

732.4

(18.1)

10.1

(456.6)

400.2

(0.5)

399.7 

 Prior year adjustment in respect of IAS 38 (Note 1)

-

- 

- 

- 

(0.9) 

(0.9)

(0.9) 

At 1 May 2008 restated 

132.4

732.4

(18.1)

10.1

(457.5)

399.3

(0.5)

398.8

Loss for the period - continuing operations

 - 

- 

 - 

 - 

(102.6)

(102.6)

(0.6)

(103.2) 

Profit for the period - discontinued operations

 - 

 - 

 - 

 - 

2.7

2.7

 - 

2.7 

Other comprehensive income:

Exchange differences

 - 

 - 

(0.6)

 - 

 - 

(0.6)

(0.1)

(0.7)

Actuarial gains on retirement benefit obligations

 - 

 - 

 - 

 - 

15.7

15.7

 - 

15.7 

Tax on actuarial gains on retirement benefit obligations

 - 

 - 

 - 

 - 

(4.5)

(4.5)

 - 

(4.5) 

Available for sale assets - fair value loss net of tax

 - 

 - 

 - 

(8.7)

 - 

(8.7)

 - 

(8.7) 

Cash flow hedges - fair value loss net of tax

 - 

2.2

 - 

 - 

 - 

2.2

 - 

2.2 

Total comprehensive income/(expense) for the period 

-

2.2

(0.6)

(8.7)

(88.7)

(95.8)

(0.7)

(96.5) 

Transactions with owners: 

Dividends 

 - 

 - 

 - 

 - 

(76.3)

(76.3)

(0.1)

(76.4) 

Employee share schemes 

 - 

 - 

 - 

 - 

0.6

0.6

 - 

0.6 

Investments in ESOP shares 

 - 

 - 

 - 

 - 

(0.1)

(0.1)

 - 

(0.1) 

Tax on employee share schemes 

 - 

 - 

 - 

 - 

(0.1)

(0.1)

 - 

(0.1) 

At 31 October 2008 restated 

132.4

734.6

(18.7)

1.4

(622.1)

227.6

(1.3)

226.3 

Group balance sheet 

As at 31 October 2009 

31 October 2009

(unaudited)

31 October 2008

restated

(unaudited)

30 April 2009

restated

(audited)

31 October 2009

(unaudited)

Note

£m

£m

£m

€m(1)

Assets

Non-current assets

Intangible assets

9

112.4

96.0

117.2

125.5

Property, plant and equipment

10

515.9

487.2

530.7

576.2

Available for sale financial assets

9.1

8.5

4.0

10.2

Investments in joint venture and associates

20.0

18.4

21.0

22.4

Other receivables

18.1

11.7

15.7

20.2

Deferred income tax assets

42.7

23.8

30.7

47.7

Total non-current assets

718.2

645.6

719.3

802.2

Current assets

Inventories

803.4

744.9

664.7

897.2

Trade and other receivables

276.1

312.4

242.9

308.4

Income tax

11.2

26.8

0.6

12.5

Other investments

22.9

41.7

23.8

25.6

Derivative financial instruments

0.2

3.4

0.1

0.2

Cash and cash equivalents

11

147.6

123.6

130.0

164.8

Total current assets

1,261.4

1,252.8

1,062.1

1,408.7

Total assets

1,979.6

1,898.4

1,781.4

2,210.9

Liabilities

Current liabilities

Borrowings

(3.2)

(2.7)

(0.8)

(3.6)

Income tax liabilities

(4.4)

(10.8)

(8.1)

(4.9)

Trade and other payables

(1,194.7)

(1,081.9)

(956.2)

(1,334.3)

Derivative financial instruments

(0.4)

 - 

(0.4)

(0.4)

Provisions

(2.3)

(1.7)

(2.9)

(2.6)

Total current liabilities

(1,205.0)

(1,097.1)

(968.4)

(1,345.8)

Non-current liabilities

Borrowings

(110.3)

(154.4)

(140.9)

(123.2)

Other payables

(351.4)

(312.1)

(356.7)

(392.4)

Deferred income tax liabilities

(55.2)

(49.1)

(54.7)

(61.7)

Retirement benefits

16

(91.1)

(58.7)

(55.1)

(101.7)

Provisions

(3.2)

(0.7)

(4.0)

(3.6)

Total non-current liabilities

(611.2)

(575.0)

(611.4)

(682.6)

Total liabilities

(1,816.2)

(1,672.1)

(1,579.8)

(2,028.4)

Net assets

163.4

226.3

201.6

182.5

31 October 2009

(unaudited)

31October 2008

Restated

(unaudited)

30 April 2009

Restated

(audited)

31 October 2009

(unaudited)

Note

£m

£m

£m

€m(1)

Equity

Share capital

12

132.4

132.4

132.4

147.9

Other reserves

715.8

717.3

710.0

799.4

Retained earnings

(681.0)

(622.1)

(640.0)

(760.6)

Total equity shareholders' funds

167.2

227.6

202.4

186.7

Minority interests

(3.8)

(1.3)

(0.8)

(4.2)

Total equity

163.4

226.3

201.6

182.5

Notes

1) Balance sheet information in euros is provided for illustrative purposes only and is translated at the closing exchange rate of €1.1168 for £1.

Approved by the Board of Directors on 16 December 2009 and signed on its behalf by:

Thierry Falque-Pierrotin 

Simon Herrick

Director

Director

Group statement of cash flows 

Six months ended 31 October 2009

Six months

ended 31

October 2009

(unaudited)

Six months

ended 31

October 2008

(unaudited)

Year

ended 30

April 2009

(audited)

Six months

ended

31 October

2009

(unaudited)

Note

£m

£m

£m

€m(1)

Cash flows from operating activities

Cash generated from operations

13

113.3

122.3

250.6

129.0

Interest paid

(13.0)

(6.7)

(15.8)

(14.8)

Tax paid

(19.3)

(8.4)

(25.9)

(22.0)

Net cash flows from operating activities

81.0

107.2

208.9

92.2

Cash flows from investing activities

Proceeds from sale of business operation, net of cash disposed

10.7

-

-

12.2

Proceeds from sale of property, plant and equipment

4.9

2.1

(92.1)

5.6

Purchase of property, plant and equipment

(29.3)

(62.0)

2.1

(33.4)

Purchase of available for sale investments

-

-

(0.7)

-

Purchase of intangible assets

(10.6)

(15.0)

(40.6)

(12.1)

Cash inflow from other current investments

0.8

3.4

12.3

0.9

Interest received

1.8

0.7

6.7

2.0

Dividends received from joint venture/ associate

3.3

1.6

5.5

3.8

Net cash used in investing activities

(18.4)

(69.2)

(106.8)

(21.0)

Cash flows from financing activities

Net proceeds from/(net repayment of) borrowings

(28.0)

102.2

66.0

(31.9)

Dividends paid to shareholders

5

(17.2)

(76.3)

(85.5)

(19.6)

Dividends paid to minority interests

(2.3)

-

(0.1)

(2.6)

Net cash (used in)/generated by financing activities

(47.5)

25.9

(19.6)

(54.1)

Net cash inflow from cash, cash equivalents and bank overdrafts

14

15.1

63.9

82.5

17.1

Effects of exchange rate changes

14

0.1

(2.6)

(12.9)

0.1

Net increase in cash, cash equivalents and bank overdrafts

15.2

61.3

69.6

17.2

Cash, cash equivalents and bank overdrafts at start of period

14

129.2

59.6

59.6

147.1

Cash, cash equivalents and bank overdrafts at end of period

11

144.4

120.9

129.2

164.3

Notes

Notes to the financial statements

Six months ended 31 October 2009

1 Accounting policies (unaudited)

Basis of preparation

The financial information set out on pages XX to XX comprises the condensed consolidated financial statements of Kesa Electricals PLC for the six months ended 31 October 2009. The Interim report is unaudited, but has been reviewed by the auditors whose report is set out on page XX. It does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the year ended 30 April 2009 are derived from the statutory accounts filed with the Registrar of Companies. The audit report on the Annual Report 2008/09 was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

The interim condensed consolidated financial statements comprise the Company and its subsidiary undertakings (together referred to as the "Group") and the Group's interests in associated undertakings and joint ventures. 

The interim report has been prepared in accordance with Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 Interim Financial Reporting as adopted by the European Union. The report has been prepared in accordance with IFRSs as adopted by the European Union and, except as described below, the accounting policies set out in the 2008/9 Annual report approved on 24 June 2009, and should be read in conjunction with those consolidated financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

Effect of new standards

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 May 2009. - IAS 1, (Revised) "Presentation of financial statements". The new standard has prohibited the presentation of items of income and expenses in the statement of changes in equity, requiring "non-owner changes in equity" to be presented separately from owner changes in equity. The Group has elected to show the statement of comprehensive income separately from the income statement. The implementation of this new standard has not affected the measurement of reported profit or equity; - IAS 23, (Amendment) "Borrowing costs". The amendment required an entity to capitalise borrowing costs directly attributable to the acquisitions, construction or production of a qualifying asset as part of the cost of that asset, removing the option to immediately expense those borrowing costs. This amendment does not have a material affect on the Group;

- IAS 32, (Amendment) "Financial Instruments: Presentation", and IAS 1 (Amendment) "Presentation of financial statements" - "Puttable financial instruments and obligations arising on liquidation". This amendment requires puttable financial instruments and instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rate share of the net assets of the entity only on liquidation, to be classified as equity. This amendment does not have a material affect on the Group;

- IAS 38, (Amendment) "Intangible assets: Recognition of an expense". This amendment requires an entity to expense expenditure on point of sale material and related marketing costs, which had previously been recognised as a prepayment in the balance sheet. An adjustment of £0.9m has been made to opening equity to reflect the retrospective impact of this amendment:

- IAS 39, (Amendment) "Financial instruments: Recognition and measurement". This amendment updates the accounting treatment of hedging instruments. This amendment does not have a material affect on the Group;

- IFRS 2, (Amendment) "Share-based payment". This amendment clarifies that vesting conditions are service conditions and performance conditions only and that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. This amendment does not have a material effect on the Group. 

- IFRS 8, "Operating segments". IFRS 8 replaces IAS 14 "Segment reporting". This standard requires segmental reporting in the financial statements to be presented on the same basis as that used for internal management reporting purposes to the chief operating decision maker. The chief operating decision maker has been identified as the Chief Executive Officer. This has resulted in some changes to the Group's segments and the disclosures;- IFRIC 13, "Customer loyalty programmes relating to IAS 18, Revenue". IFRIC 13 clarifies that where goods or services are sold together with a customer loyalty incentive, the arrangement is a multiple-element arrangement and the consideration receivable from the customer should be allocated between the components of the arrangement in proportion to their fair values. This standard does not have a material affect on the Group;

- IFRIC 14, "IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction". IFRIC 14 provides guidance on assessing the limit in IAS 19 on the amount of surplus that can be recognised as an asset and how the pension asset or liability may be affected by a statutory or contractual minimum funding requirement. This standard does not have a material affect on the Group;

- IFRIC 16, "Hedges of a net investment in a foreign operation". IFRIC 16 clarifies the accounting treatment of net investment hedging. This standard does not have a material affect on the Group.

Principal rates of exchange

Euro

Czech Kr

Average rate - six months to 31 October 2009

1.1388

29.6043

Closing rate - 31 October 2009

1.1168

29.6177

Average rate - six months to 31 October 2008

1.2624

30.8168

Closing rate - 31 October 2008

1.2742

30.7050

Average rate - year ended 30 April 2009

1.1923

30.4226

Closing rate - 30 April 2009

1.1184

29.9720

Notes to the financial statements

Six months ended 31 October 2009

2 Group operating profit/(loss) (unaudited)

Six months 

ended 31 October 2009

Six months 

ended 31 October 2008

Year 

ended 30 April 2009

£m

£m

£m

Analysis by function:

Revenue

2,347.2

2,180.8

4,954.1

Cost of sales

(1,675.8)

(1,570.0)

(3,585.5)

Gross profit

671.4

610.8

1,368.6

Distribution costs

(107.8)

(100.7)

(213.7)

Administrative expenses

(117.8)

(108.8)

(243.3)

Selling expenses 

(432.7)

(396.8)

(852.8)

Profit on disposal of business operation

4.5

-

-

Exceptional costs

(9.0)

-

(23.1)

Amortisation and impairment of acquisition related intangible assets

(0.1)

(114.4)

(118.5)

Other income

3.8

5.0

10.5

Group operating profit/ (loss)

12.3

(104.9)

(72.3)

Share of post tax profit in joint venture and associates

2.4

3.2

7.3

Total operating profit/ (loss)

14.7

(101.7)

(65.0)

Group operating profit includes net premiums on exit from leased premises, arising primarily in Comet, of £3.0m (31 October 2008: £1.7m, 30 April 2009: £2.1m) and property, plant and equipment disposal gains of £1.3m (31 October 2008: £0.8m, 30 April 2009: £4.3m loss).

Total revenue includes revenue from services of £174.2m (31 October 2008: £144.6m, 30 April 2009: £314.2m). Such revenues predominantly comprise those relating to customer support agreements, delivery and installation, product repairs and product support.

The amount of inventory written off and charged to the income statement for the period was £13.5m (31 October 2008 £11.3m, 30 April 2009 £28.3m).

 Six months ended 31 October 2009

France 

Darty

France

UK

Comet

Other established 

businesses

Developing

businesses

Unallocated

Continuing

Group

 Discont'd

Operations

Group

£m

£m

£m

£m

£m

£m

£m

£m

Revenue

1,133.9

749.3

317.1

146.9

-

2,347.2

2,347.2

Retail profit/(loss)

45.2

(1.2)

4.0

(16.1)

(7.6)

24.3

24.3

Share of joint venture and associates interest and taxation

(0.4)

(0.4)

(0.4)

Valuation losses

-

(4.6)

(4.6)

(4.6)

Profit on disposal

4.5

-

4.5

4.5

Amortisation and impairment of acquisition related intangible assets

(0.1)

(0.1)

(0.1)

Exceptional costs

(2.9)

(0.4)

(5.7)

(9.0)

(9.0)

Operating profit/(loss)

41.9

(1.6)

4.0

(17.4)

(12.2)

14.7

14.7

Finance costs

(10.5)

(10.5)

Finance income

1.1

1.1

Exceptional finance costs

0.7

0.7

Finance costs - net

(8.7)

(8.7)

Profit before income tax

6.0

6.0

Income tax expense

(3.6)

(3.6)

Profit for the year from discontinued operations

-

(1.8)

(1.8)

Profit/ (loss) for the period

2.4

(1.8)

0.6

The share of operating profits of the joint venture and associates included within the retail profit for Darty France is £2.8m. The share of post tax profits of the joint venture and associates included within the operating profit for Darty France is £2.4m.

France 

Darty

France

UK

Comet

Other established

businesses

Developing

businesses

Continuing

Group

Discont'd

 Operations

Unallocated

Group

£m

£m

£m

£m

£m

£m

 £m

£m

Segmental total assets

953.3

443.4

234.2

141.8

206.9

1,979.6

-

1,979.6

Segmental liabilities

(843.2)

(473.9)

(154.1)

(95.3)

(249.7)

(1,816.2)

-

(1.816.2)

Segmental depreciation and amortisation

(28.5)

(13.6)

(6.9)

(3.9)

(0.5)

(53.4)

-

(53.4)

Segmental capital expenditure

20.7

4.8

6.9

5.8

1.7

39.9

-

39.9

France 

Darty

France

UK

Comet

Other established

businesses

Developing

businesses

Unallocated

Continuing 

Group

Discont'd 

operations

 Group

£m

£m

£m

£m

£m

£m

£m

Revenue

1,010.5

723.3

308.7

138.3

 - 

2,180.8

 - 

2,180.8

Retail profit/(loss)

40.1

(8.1)

7.0

(19.0)

(7.0)

13.0

 - 

13.0

Share of joint venture and associates interest and taxation

(0.3)

 - 

 - 

 - 

 - 

(0.3)

 - 

(0.3)

Valuation losses

 - 

 - 

 - 

 - 

 - 

 - 

 - 

 - 

Amortisation and impairment of acquisition related intangible assets

 - 

 - 

 - 

(114.4)

 - 

(114.4)

 - 

(114.4)

Exceptional costs

 - 

-

 - 

-

-

-

 - 

-

Operating profit/(loss)

39.8

(8.1)

7.0

(133.4)

(7.0)

(101.7)

 - 

(101.7)

Finance costs

(5.2)

 - 

(5.2)

Finance income

3.1

 - 

3.1

Exceptional finance costs

-

-

-

Finance costs - net

(2.1)

 - 

(2.1)

Loss before income tax

(103.8)

 - 

(103.8)

Income tax credit

0.6

-

0.6

Pre-tax profit on disposal

 - 

2.7

2.7

(Loss)/ profit for the period

(103.2)

2.7

(100.5)

 France 

 Darty

France

UK

Comet

Other established

Businesses

Developing

businesses

Unallocated

Continuing

Group

Discont'd

 operations

Group

 £m

£m

£m

£m

£m

£m

£m