19th Mar 2008 07:01
Kesa Electricals plc19 March 2008 19 March 2008 Interim Statement of Results for the Twelve Months ended 31 January 2008* Financial Highlights The accounts have been prepared with BUT as a discontinued operation. •Group revenue increased by 10.5% to £4,314.4 million (2007: £3,905.2 million), by 8.8% in constant currency(1) and by 3.0% on a like for like basis. •Group retail profit(2) increased by 0.6% to £145.6 million (2007: £144.7 million). •Net capital expenditure and investment increased to £228.4 million (2007: £111.6 million). •In September 2007, the acquisition of Menaje Del Hogar in Spain was completed for €100 million plus assumption of €31 million of net debt. •Cash generated from operations was £320.9 million (2007: £307.9 million). •Basic earnings per share decreased by 27.1% to 15.1 pence (2007: 20.7 pence). •Second interim dividend of 10.8 pence per share. Financial Highlights with BUT included in continuing operations •Group revenue increased by 10.6% to £4,980.2 million (2007: £4,500.9 million), by 8.9% in constant currency(1) and by 3.0% on a like for like basis. •Group retail profit(2) increased by 7.2% to £194.0 million (2007: £181.0 million). •Basic earnings per share excluding goodwill impairment increased by 9.2% to 22.6 pence (2007: 20.7 pence) *Full year results for the 15 months ended 30 April 2008 will be published on 24June 2008 (1) Constant exchange rate of £1 = €1.4468 (2) Retail profit is defined as total operating profit before the share of jointventure and associates' interest and taxation, the Demerger Award Plan chargeand valuation gains / losses on options to acquire minority interests. Thecomparative amounts have been restated to include the gains and losses on thedisposal of property, plant and equipment. Jean-Noel Labroue, Chief Executive, commented: "The Group delivered excellent revenue and profit growth against the strongcomparatives of last year. Sales were helped by the continued high demand fornew technologies, particularly flat screen televisions and laptops, while salesof white goods were weaker during the second half of the period. Overall we sawan easing of the negative mix effect on margin. "As consumer confidence declines, we are anticipating difficult tradingconditions ahead. We will be more focused than ever on margin optimisation andcost control while continuing to build on our strong service proposition. Wewill also continue with our planned investments in the business and new marketsto secure our longer term growth." David Newlands, Chairman, commented: "I am delighted with these results which represent a good performance from allour businesses in difficult market conditions. "The Group again improved its cash generation which allowed us to invest for thefuture and has also enabled us to declare a second interim dividend of 10.8pence per share." ENDS Enquiries Press:Kesa Electricals plcAnnabel Donaldson +44 (0) 20 7269 1400 FinsburyAlex Pettifer +44 (0) 20 7251 3801Euro RSCGBenjamin Perret +33 (0) 1 58 47 95 39 Analysts:Kesa Electricals plcSimon Ward +44 (0) 20 7269 1400 There will be an on-line presentation today to analysts and institutions at08.00am. This announcement is available on the KESA Electricals website:www.kesaelectricals.com. A recording of the presentation and Q&A will beavailable from 10.00am, access details are available on the web site. This Interim Statement of Results does not constitute an interim report preparedin accordance with the Disclosure and Transparency Rules of the FinancialServices Authority. The full interim report will be sent to shareholders on 31March 2008 and available on the website on 1 April 2008. As previously announced Kesa Electricals has changed its year end to 30 April.Summary unaudited financial information for the year ended 30 April 2007 and sixmonths to 31 October 2007 are available on our website. Certain statements made in this announcement are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual results to differ materiallyfrom any expected future results in forward looking statements KESA Electricals is a specialist electrical retailer. It employs more than29,000 people and trades in 12 countries and has an annual turnover ofapproximately £5 billion. KESA Electricals is a member of the FTSE 250. Itsordinary shares are listed with the UK Listing Authority and trade on the marketfor listed securities on the London Stock Exchange under the symbol KESA.L. Itis also listed on the Premier Marche of the Paris Stock Exchange. For furtherinformation, please visit the company's website, as above. GROUP OVERVIEW Results as reported in sterling including BUT Revenue for Revenue for Change Retail profit Retail profit Change 12 months 12 months for 12 months for 12 months ended ended ended ended 31 Jan 31 Jan 31 Jan 31 Jan 2008 2007 2008 2007 £m £m £m £m Darty 1,895.7 1,733.9 9.3% 111.3 114.1 (2.5)%Comet 1,731.6 1,676.5 3.3% 44.2 46.1 (4.1)%BUT 665.8 595.7 11.8% 48.4 36.3 33.3%Other* 687.1 494.8 38.9% 3.7 (2.4)Central - - - (13.6) (13.1)Total 4,980.2 4,500.9 10.6% 194.0 181.0 7.2% Results as reported in local currency Revenue for Revenue for Change Retail profit Retail profit Change 12 months 12 months for 12 months for 12 months ended ended ended ended 31 Jan 31 Jan 31 Jan 31 Jan 2008 2007 2008 2007 m m m m Darty €2,727.7 €2,554.6 6.8% €158.2 €168.7 (6.2)%Comet £1,731.6 £1,676.5 3.3% £44.2 £46.1 (4.1)%BUT €957.3 €877.4 9.1% €69.3 €53.1 30.5%Other* €983.8 €729.5 34.9% €4.2 •(3.1) *Includes BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland, DartyTurkey and Menaje Del Hogar from 17 September 2007. Financial Review On 30 January 2008, the Group announced it had agreed to the sale of itssubsidiary BUT, due to complete subject to the satisfaction of the conditionsprecedent by the end of March 2008. In accordance with IFRS 5, BUT has beentreated in the financial statements as a discontinued operation. This requiresthe removal of BUT from continuing operations and its inclusion in the accountsunder loss/profit from discontinued operations. In reviewing the performance for the year in this announcement, the operationsand earnings of BUT have been included in the revenue and retail profit figures. Reconciliation of published results to results including BUT: 12 months ended 31 January 2008 12 months ended 31 January 2007 (restated) As BUT As BUT£m published BUT integrated published BUT integrated Revenue 4,314.4 665.8 4,980.2 3,905.2 595.7 4,500.9 Retail profit 145.6 48.4 194.0 144.7 36.3 181.0 Non retail profit/(loss) 0.1 (4.3) (4.2) (0.8) (2.4) (3.2) ________ _______ ________ ________ ________ ________ Operating profit 145.7 44.1 189.8 143.9 33.9 177.8 Interest (12.9) (2.0) (14.9) (10.9) (1.5) (12.4) Tax (41.4) (13.9) (55.3) (43.2) (12.8) (56.0) Impairment of BUT goodwill - (39.8) (39.8) - - - ________ _______ ________ ________ ________ ________Profit/(loss) 91.4 (11.6) 79.8 89.8 19.6 109.4 ________ _______ ________ ________ ________ ________ The BUT goodwill impairment charge is a non cash loss representing thedifference between the expected sale proceeds net of fees and working capitaladjustments and the carrying value of the group's investment in BUT. Inaccordance with IFRS 5 this amount is recognised once the business is classifiedas discontinued and is a reduction in the balance sheet goodwill relating to theacquisition of BUT. The reported results in sterling were impacted by the strengthening of the Euroby 3.8 per cent overall and particularly in the significant fourth quarter. Group revenue was £4,980.2 million, up 10.6 per cent on last year (8.9 per centin constant currency) and up 3.0 per cent on a like for like basis. Group retail profit was £194.0 million, up 7.2 per cent on last year after £32.6million of start up losses for Darty Box and new businesses. The net interest charge was £14.9 million compared to £12.4 million last year.Profit after interest and before tax and goodwill impairment charge was £174.9million compared to £165.4 million last year. Cash generated from operations was £320.9 million, up from £307.9 million lastyear reflecting good working capital management. Net capital expenditure and investments increased to £228.4 million from £111.6million as a result of accelerated investment in the businesses and theacquisition of Menaje del Hogar. Earnings per share excluding goodwill impairment charge increased by 9.2 percent to 22.6 pence, 20.7 pence last year. Basic earnings per share as publisheddecreased by 27.1% to 15.1 pence (2007: 20.7 pence) as a result of the BUTimpairment. The Board has declared a second interim dividend of 10.8 pence. The ex dividenddate will be 11 June 2008, the record date 13 June 2008 and payment date 11 July2008. This will, when combined with the first interim dividend of 3.5 pence,represent an increase of 7.5 per cent on the dividends paid for the 12 monthperiod ended 31 January 2007. In addition the Board will also recommend thepayment of a final dividend of 3.6 pence, payable in October 2008 in relation tothe three month period ending 30 April 2008. Trading Review The overall market conditions were positive against strong comparatives butweakened towards the end of the period. Group revenue was again driven by thehigh demand for new technologies whilst sales of large white goods slowed downduring the second half of the period. Overall the negative mix effect on margineased. In France, revenue growth at Darty was up 6.8 per cent in local currency, up 3.8per cent on a like for like basis. Before taking into account the €33.4 millionrevenue and €22.5 million losses for Darty Box, revenue grew by 5.6 per cent andretail profit grew by 1.7 per cent. Comet's revenue increased by 3.3 per cent, up 0.4 per cent on a like for likebasis. Against particularly strong comparatives, retail profit fell by 4.1 percent to £44.2 million. Web generated sales at Darty and Comet grew by 49.6 per cent and 23.1 per centrespectively reflecting the strong customer demand for 'click and collect' anddemonstrating the success of our multi-channel strategy. BUT continued its turnaround programme. Total revenue grew by 9.1 per cent inlocal currency, total store revenue grew by 11.5 per cent in local currency and3.0 per cent on a like for like basis. Retail profit grew by 30.5 per cent to€69.3 million. Total revenue at our other businesses, BCC, Vanden Borre, Datart, Darty Italy,Darty Switzerland, Darty Turkey and Menaje del Hogar, grew by 34.9 per cent inlocal currency, up 8.2 per cent on a like for like basis. Retail profit grew by63.9 per cent to €27.2 million for the established businesses while overalllosses for our new businesses in Italy, Switzerland, Turkey, after contributionfrom Spain, were €23.0 million. Outlook As consumer confidence declines, we are anticipating trading conditions for theyear ahead to be difficult. The Group will focus on optimising margin andcontrolling costs while enhancing our specialist service proposition. We willalso continue to invest in our existing businesses and new markets to secure ourfuture growth. DARTY FRANCE Results for Results Change Results for 12 Results for Change for months ended 12 months 12 months 31 Jan 2008 12 months ended ended ended 31 Jan 31 Jan •m 31 Jan 2008 2007 2007 £m £m •m Revenue 1,895.7 1,733.9 9.3% 2,727.7 2,554.6 6.8% Retail 111.3 114.1 (2.5)% 158.2 168.7 (6.2)%profit No of 214 209 +5stores Sales 282.7 274.4 3.0%space(000s sq m) Darty's total revenue increased by 6.8 per cent in local currency compared tothe same period last year, up 3.8 per cent on a like for like basis. Salescontinued to be driven by the high demand for new technologies and, aspreviously stated, the negative mix effect on margin eased. Retail profit was €158.2 million, a decrease of 6.2 per cent on the previous 12months. Before taking into account the €33.4 million revenue and €22.5 million lossesfor Darty Box, revenue grew by 5.6 per cent and retail profit grew by 1.7 percent. Darty continued to add value to its customer proposition. The new kitchen rangeis being trialled in three stores with encouraging early results, a total of 3.2million 'Darty Cards' have been issued and the launch of 'click and collect'helped web generated sales increase by 49.6 per cent. The back office efficiency plan to centralise the accounting systems furtherprogressed. Demand for Darty Box during the fourth quarter of the year was below ourexpectations and total subscribers at the end of the period were 121,000.However, the quality of the product and associated services meet the highstandard that Darty customers have come to expect. The store modernisation programme progressed on schedule. During the period,Darty completed five new store openings, two relocations and eightrefurbishments/extensions. COMET Results for Results for Change 12 months ended 12 months 31 Jan 2008 ended £m 31 Jan 2007 £m Revenue 1,731.6 1,676.5 3.3% Retail profit 44.2 46.1 (4.1)% No of stores 251 248 +3 Sales space 267.9 258.9 3.5%(000s sq m) Comet delivered total revenue of £1,731.6 million, up 3.3 per cent on the sameperiod last year and up 0.4 per cent on a like for like basis. Sales were helpedby the continued strong demand for flat screen televisions and laptops, whilesales of white goods were weak over the second half. Against a good performance for the same period last year which included a netlease premium of £3.5 million from the closure of the Fosse Park store, Cometreported a small decline in retail profit to £44.2 million. Comet's consistent execution of its re-positioning programme to a morespecialist offering progressed further. 'Comet on Call', providing expert PC andlaptop support for the home and small business customers, was launched lastMarch and is now available from all stores nationwide. Investment in the store portfolio accelerated with ten further stores beingconverted to the successful mezzanine format. In addition, five new stores wereopened and two relocations were completed while two stores were closed. Web generated sales grew by 23.1 per cent helped by the continued high demandfor 'click and collect'. BUT Results for 12 Results for 12 Change Results Results for 12 Change months ended months ended for months ended 31 Jan 2008 31 Jan 2007 12 months 31 Jan 2007 ended £m £m 31 Jan •m 2008 •m Revenue 665.8 595.7 11.8% 957.3 877.4 9.1% Retail 48.4 36.3 33.3% 69.3 53.1 30.5%profit No of 116 107 +9stores Sales 374.6 348.1 7.6%space(000s sq m) BUT grew its total revenue by 9.1 per cent in local currency, with its in-housewholesale business declining by 1.0 per cent and store turnover growing by 11.5per cent, up 3.0 per cent on a like for like basis. Retail profit grew by 30.5 per cent in local currency, to €69.3 million, helpedby an improvement in the sales mix. During the period, BUT acquired 12 franchisee stores. OTHER BUSINESSES Results for 12 Results Change Results Results for 12 Change months ended for for months ended 31 Jan 2008 12 months 12 months 31 Jan 2007 ended ended £m 31 Jan 31 Jan •m 2007 £m 2008 •m Revenue 687.1 494.8 38.9% 983.8 729.5 34.9% Retail 3.7 (2.4) - 4.2 (3.1) -profit No of 224 141 +83stores Sales 269.4 162.5 65.8%space(000s sq m) Total revenue for BCC, Vanden Borre, Datart, Darty Italy, Darty Switzerland,Darty Turkey and Menaje del Hogar grew by 34.9 per cent in local currency, up8.2 per cent on a like for like basis, helped by particularly strong salesperformances at our established businesses BCC, Vanden Borre and Datart. Retail profit for these three businesses increased by 63.9 cent to €27.2 millionfrom €16.6 million last year. Overall losses for the new businesses Darty Italy,Darty Switzerland, Darty Turkey, after the contribution from Menaje del Hogar,totalled €23.0 million (€19.7 million in 2007). The performance of our established businesses demonstrates the success of ourbusiness model in consolidating markets. All three businesses significantlyincreased sales on a like for like basis and profitability. During the period,eight new stores were opened, 10 refurbishments / extensions were completedwhile one store was closed. In Italy, three new stores were opened bringing the total number of stores to12. In Switzerland, two new stores were opened bringing the total to five. Boththese new businesses showed positive like for like performances and improvedgross margin. In Turkey we now have six stores open in Istanbul and we continue to receivepositive customer reaction. The acquisition of Menaje Del Hogar in Spain was completed on 17 September 2007and from this date to the period end revenue was €97.6 million and retail profitwas €1.7 million. We are currently implementing the integration programme. Group income statementFor the period ended 31 January 2008 Six Six Twelve Year Six Twelve months months months ended months months ended ended ended 31 ended ended 31 31 31 January 31 31 January January January restated January JanuaryUnaudited Note 2008 2007 2008 2007 2008 2008 £m £m £m £m •m(1) •m(1)_________________________________________________________________________________ Revenue 2 2,546.3 2,245.9 4,314.4 3,905.2 3,606.6 6,242.1Group operating profit 2 120.7 108.8 140.1 138.3 171.0 202.7Share of post tax profit in 2 3.1 2.6 5.6 5.6 4.4 8.1joint ventures andassociates_________________________________________________________________________________Total operating profit 123.8 111.4 145.7 143.9 175.4 210.8_________________________________________________________________________________ _________________________________________________________________________________Analysed as:Retail profit (2) 3 124.1 111.5 145.6 144.7 175.8 210.6Share of joint ventures and 3 (0.3) (0.2) (0.5) (0.3) (0.4) (0.7)associates interest andtaxationValuation gains and losses 3 - - 0.6 - - 0.9Demerger award plan charge 3 - 0.1 - (0.5) - -_________________________________________________________________________________Total operating profit 123.8 111.4 145.7 143.9 175.4 210.8_________________________________________________________________________________ Finance costs (12.2) (8.5) (19.3) (17.5) (17.3) (27.9)Finance income 2.6 3.9 6.4 6.6 3.7 9.3_________________________________________________________________________________Profit before income tax 114.2 106.8 132.8 133 161.8 192.2 UK taxation (9.6) (13.5) (6.8) (5.8) (13.6) (9.8)Overseas taxation (26.1) (21.9) (34.6) (37.4) (37.0) (50.1)_________________________________________________________________________________Total taxation (35.7) (35.4) (41.4) (43.2) (50.6) (59.9)_________________________________________________________________________________ Profit for the financial year 78.5 71.4 91.4 89.8 111.2 132.3from continuing operationsProfit for the financial 5 (21.5) 11.7 (11.6) 19.6 (30.4) (16.8)year from discontinuedoperations_________________________________________________________________________________Profit for the financial period 57.0 83.1 79.8 109.4 80.8 115.5================================================================================= Profit attributable to:- Equity shareholders 56 82.1 79.8 109.4 79.3 115.5- Minority interests 1.0 1.0 - - 1.5 -_________________________________________________________________________________ 57.0 83.1 79.8 109.4 80.8 115.5Earnings per share - basic & diluted (pence): Profit from continuing 7 14.8 13.5 17.3 17.0 21.0 25.0operationsProfit from discontinued 7 (4.1) 2.2 (2.2) 3.7 (5.8) (3.2)operations_________________________________________________________________________________Profit for the period 10.7 15.7 15.1 20.7 15.2 21.8================================================================================= Notes 1) Income statement information in Euros is provided for illustrative purposes only and is translated at the average exchange rate of €1.4164 for £1 for the six months ended 31 January 2008 and €1.4468 for the twelve months ended 31 January 2008.2) Retail profit represents total operating profit before the share of joint venture associates' interest and taxation, the Demerger Award Plan charge and valuation gains/(losses) on options to acquire minority interests. The comparative amounts have been restated to include any gains and losses arising on the disposal of property, plant and equipment. Group statement of recognised income and expenseFor the period ended 31 January 2008 Twelve months Year Twelve months ended 31 ended 31 ended 31 January 2008 January 2007 January 2008 (unaudited) (audited) (unaudited) £m £m •m (1)_________________________________________________________________________________________________________________ Note_________________________________________________________________________________________________________________ Exchange differences 13 32.0 (5.7) 46.3Actuarial gains/(losses) on retirement benefit obligations 13.5 28.3 19.5Tax on actuarial (gains)/losses on retirement benefit obligations (5.2) (8.7) (7.5)Available for sale assets - fair value gains net of tax 13 (3.9) 1.6 (5.6)Cash flow hedges - fair value gains net of tax 13 (0.6) 2.7 (0.9)- recycled and reported in net profit 13 (0.2) 0.6 (0.3)Impact of put options exercised/ (entered into) during the year 13 - 10.9 -Tax on employee share schemes 12 (0.1) (1.2) (0.1)_________________________________________________________________________________________________________________ Net profit/(loss) recognised directly in equity 35.5 28.5 51.4 Profit for the period 3 79.8 109.4 115.5_________________________________________________________________________________________________________________ Total recognised income for the period 115.3 137.9 166.9================================================================================================================= Attributable to:- Equity shareholders 115.3 137.9 166.9- Minority interests - - -_________________________________________________________________________________________________________________ Total recognised income for the period 115.3 137.9 166.9================================================================================================================= Note 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 €1.4468 for £1. Group balance sheetas at 31 January 2008 31 January 2008 31 January 2007 31 January 2008 (unaudited) (audited) (unaudited) Note £m £m •m (1)_______________________________________________________________________________________________________AssetsNon-current assetsIntangible assets 8 177.3 217.9 238.1Property, plant and equipment 9 454.4 513.9 610.2Available for sale financial assets 18.0 20.0 24.1Investments in joint ventures and associates 14.7 43.7 19.7Other receivables 12.9 10.9 17.4Derivative financial instruments 2.7 5.0 3.6Deferred income tax assets 20.2 26.3 27.1_______________________________________________________________________________________________________Total non-current assets 700.2 837.7 940.2_______________________________________________________________________________________________________ Current assetsInventories 648.0 614.3 870.1Trade and other receivables 259.2 280.5 347.9Income tax 18.1 12.1 24.3Other investments 51.2 72.3 68.7Derivative financial instruments - 0.2 -Cash and cash equivalents 10 128.3 163.3 172.4Assets of disposal group held for sale 5 589.1 - 790.8_______________________________________________________________________________________________________Total current assets 1,693.9 1,142.7 2,274.2_______________________________________________________________________________________________________ Total assets 2,394.1 1,980.4 3,214.4_______________________________________________________________________________________________________ LiabilitiesCurrent liabilitiesBorrowings (3.4) (105.9) (4.5)Income tax liabilities (27.5) (21.2) (36.9)Trade and other payables (1,006.9) (896.8) (1,352.0)Derivative financial instruments 0.1 (0.1) 0.1Provisions (2.1) (1.2) (2.8)Liabilities of disposal group held for sale 5 (212.3) - (285.1)_______________________________________________________________________________________________________Total current liabilities (1,252.1) (1,025.2) (1,681.2)_______________________________________________________________________________________________________ Non-current liabilitiesBorrowings (323.3) (202.4) (434.1)Other payables (294.5) (259.3) (395.3)Deferred income tax liabilities (41.0) (35.1) (55.0)Retirement benefits 21 (69.2) (87.0) (92.9)Provisions (0.9) (0.7) (1.2)_______________________________________________________________________________________________________Total non-current liabilities (728.9) (584.5) (978.5)_______________________________________________________________________________________________________ Total liabilities (1,981.0) (1,609.7) (2,659.7)_______________________________________________________________________________________________________Net assets 413.1 370.7 554.7======================================================================================================= Group balance sheet (contd.) 31 January 2008 31 January 2007 31 January 2008 (unaudited) (audited) (unaudited) Note £m £m •m (1)_______________________________________________________________________________________________________ EquityShare capital 11 132.4 132.4 177.8Other reserves 13 764.2 736.9 1,026.1Retained earnings 12 (486.4) (503.1) (653.1)_______________________________________________________________________________________________________Total equity shareholders' funds 14 410.2 366.2 550.8_______________________________________________________________________________________________________Minority interests 2.9 4.5 3.9 _______________________________________________________________________________________________________ Total equity 413.1 370.7 554.7======================================================================================================= Note 1) Balance sheet information in Euros is provided for illustrative purposes only and is translated at the closing exchange rate of €1.3427 for £1. Approved by the Board of Directors on 19 March 2008 and signed on its behalf by: Jean-Noel Labroue Simon HerrickDirector Director Group cash flow statementTwelve months ended 31 January 2008 Twelve months Year ended 31 Twelve months ended 31 January ended 31 January 2008 2007 January 2008 (unaudited) (audited) (unaudited) Note £m £m •m (1)______________________________________________________________________________________________________________ Cash flows from operating activitiesCash generated from operations 15 320.9 307.9 464.3Interest received 5.7 6.7 8.2Interest paid (19.8) (15.6) (28.6)Tax paid (33.1) (37.8) (47.9)______________________________________________________________________________________________________________Net cash flows from operating activities 273.7 261.2 396.0______________________________________________________________________________________________________________ Cash flows from investing activitiesAcquisition of subsidiaries (net of cash acquired) (108.4) (13.1) (156.8)Proceeds from sale of property, plant and equipment 9.5 1.0 13.7Purchase of property, plant and equipment (101.8) (80.0) (147.3)Proceeds from sale of available for sale investments (0.7) - (1.0)Purchase of intangible assets (27.0) (19.5) (39.1)Cash inflow from other current investments 21.1 6.9 30.5Dividends received from joint ventures 8.6 4.4 12.4______________________________________________________________________________________________________________Net cash used in investing activities (198.7) (100.3) (287.6)============================================================================================================== Cash flows from financing activitiesFinance lease principal payments (5.5) - (8.0)Net increase in/(repayments of) borrowings 95.3 (138.1) 137.9Dividends paid to shareholders 6 (71.7) (65.7) (103.7)Dividends paid to minority interests (0.5) (0.9) (0.7)______________________________________________________________________________________________________________Net cash generated/(used) in financing activities 17.6 (204.7) 25.5==============================================================================================================Net cash inflow/(outflow) from cash, cash 16 92.6 (43.8) 133.9equivalents and bank overdrafts==============================================================================================================Effects of exchange rate changes 16 1.2 (2.2) 1.7 Net increase/(decrease) in cash, 93.8 (46.0) 135.6cash equivalents and bank overdrafts==============================================================================================================Cash, cash equivalents and bank overdrafts at start of year 16 59.8 105.8 88.1______________________________________________________________________________________________________________ Cash, cash equivalents and bank overdrafts at 16 153.6 59.8 223.7end of year==============================================================================================================Less cash held in disposal group 10 (28.6) - (41.4)______________________________________________________________________________________________________________Cash and cash equivalents held in continuing group 10 125.0 59.8 182.3============================================================================================================== Note 1) Cash flow information in Euros is provided for illustrative purposes only and is translated at the average exchange rate of €1.4468 for £1. Notes to the financial statementsFor the period ended 31 January 2008 1 Accounting policies Basis of preparation This second interim statement is provided due to the change in the year end ofKesa Electricals plc from 31 January to 30 April, in accordance with ListingRules 9.6.21R and 9.6.22G. The financial information set out on pages 1 to 22 comprises the interimcondensed consolidated financial statements of Kesa Electricals plc for the sixand twelve months ended 31 January 2008 which have been prepared in accordancewith the Disclosure and Transparency Rules of the Financial Services Authorityand with IAS 34 Interim Financial Reporting as adopted by the European Union.They have been prepared in accordance with IFRSs as adopted by the EuropeanUnion and the accounting policies set out in the 2006/7 Annual report approvedon 21 March 2007 and should be read in conjunction with those consolidatedfinancial statements. The interim condensed consolidated financial statementscomprise the Company and its subsidiary undertakings (together referred to asthe "Group") and the Group's interests in associated undertakings and jointventures. The second interim statement is unaudited, but has been reviewed by the auditorswhose report is included in the interim report to be sent to shareholders on 31March 2008. It does not constitute statutory financial statements within themeaning of Section 240 of the Companies Act 1985. The comparative figures forthe year ended 31 January 2007 are derived from the statutory accounts filedwith the Registrar of Companies. The audit report on the Annual Report 2006/07was unqualified, did not contain an emphasis of matter paragraph and did notcontain any statement under Section 237 of the Companies Act 1985. In accordance with IFRS 5, prior year income statement comparatives have beenrestated so as to report BUT as a discontinued operation. Use of adjusted measures Kesa Electricals plc believes that Retail Profit and adjusted earnings per shareprovide additional useful information on underlying trends and businessperformance to shareholders. Retail Profit represents total operating profitbefore the Demerger Award Plan charge, the share of joint venture andassociates' interest and taxation and valuation gains and losses on options toacquire minority interests. These measures are used by the Group for internalperformance analysis and incentive compensation arrangements for employees. Theterm Retail Profit is not defined by IFRS and may therefore not be comparablewith similarly titled profit measures reported by other companies. It is notintended to be a substitute for, or superior to, GAAP measurements of profit. In previous periods Retail Profit has excluded any gains or losses arising onthe disposal of property, plant and equipment. After a review of the componentsof Retail Profit in the period since demerger, management has concluded thatproperty, plant and equipment disposal gains and losses are an integral andrecurring feature of a retail business, and are similar in nature to gains andlosses arising on leases and should therefore be treated similarly and includedin Retail Profit. In addition, it has been concluded that any gains or lossesarising from the movement in put and call options in respect of minorityinterests during the period should be excluded from Retail Profit. Managementbelieve that the revised measure of Retail Profit will better reflect thefinancial performance of the Group. The change in definition of Retail Profit is effective for the 2007/08 financialyear. The consolidated income statement and the segmental analysis have beenrestated for the comparative periods to comply with this revised definition. Thechange had a positive impact of £2.4m for the six months to 31 January 2008, apositive impact of £0.6m for the six months to 31 January 2007, a positiveimpact of £3.0 for the twelve months to 31 January 2008 and a positive impact of£0.1m for the year to 31 January 2007. Principal rates of exchange Euro Czech KrAverage rate - six months to 31 January 2008 1.4164 39.4158Closing rate - 31 January 2008 1.3427 36.2012Average rate - twelve months to 31 January 2008 1.4468 40.5634Average rate - year ended 31 January 2007 1.4712 41.5569Closing rate - 31 January 2007 1.5081 40.7871Average rate - six months to 31 January 2007 1.4876 41.6587 Assets held for sale and Discontinued operations Assets and businesses are classified as held for sale, and stated at the lowerof carrying amount and fair value less costs to sell, if their carrying amountwill be recovered or settled principally through a sale transaction rather thanthrough continuing use. A discontinued operation is a component of the group'sbusiness that represents a separate major line of business that has beendisposed of, has been abandoned or meets the criteria to be classified as heldfor sale. A copy of the information to be provided to financial analysts is available onrequest from the Company Secretary, 22 - 24 Ely Place, London, EC1N 6TE. It isalso on Kesa's website, www.kesaelectricals.com. 2 Continuing Group operating profit Six months Six months Twelve months Year ended ended ended ended 31 31 January 31 January 31 January January 2008 2007 2008 2007 £m £m £m £m___________________________________________________________________________________________________________Revenue 2,546.3 2,245.9 4,314.4 3,905.2Cost of sales (1,844.7) (1,615.2) (3,105.9) (2,797.4)___________________________________________________________________________________________________________Gross profit 701.6 630.7 1,208.5 1,107.8 Distribution costs (98.9) (92.6) (181.1) (172.8)Selling expenses (396.6) (366.1) (739.7) (714.5)Administrative expenses (89.6) (68.7) (157.4) (92.5)Other income 4.2 5.5 9.8 10.3___________________________________________________________________________________________________________Group operating profit 120.7 108.8 140.1 138.3 Share of post tax profit in joint ventures and associates 3.1 2.6 5.6 5.6___________________________________________________________________________________________________________Total operating profit 123.8 111.4 145.7 143.9=========================================================================================================== The Demerger award plan charge is included within administrative expenses. Continuing Group operating profit includes net premiums on exit from leasedpremises of £3.9m (six months to 31 January 2007: £0.3m), and in the twelvemonths to 31 January 2008 of £3.9m (year ended 31 January 2007: £6.4m).Property, plant and equipment disposal gains were £3.0m for the twelve monthsended 31 January 2008 (twelve months ended 31 January 2007: £0.1m) and £2.4m forthe six months ended 31 January 2008 (six months ended 31 January 2007: £0.6m). Continuing Group total revenue includes revenue from services in the six monthsto January 2008 of £125.2m (six months to January 2007: £108.6m). ContinuingGroup total revenue includes revenue from services in the twelve months toJanuary 2008 of £231.2m (year to January 2007: £205.4m). Such revenuespredominantly comprise those relating to customer support agreements, deliveryand installation, product repairs and product support. The amount of inventory written off and charged to the income statement for thesix months to 31 January 2008 was £12.8m (six months to 31 January 2007:£11.7m), and £25.6m in the twelve months to 31 January 2008 (twelve months to 31January 2007: £23.4m). 3 Segmental analysis At 31 January 2008 and 31 January 2007, the Continuing Group was organised intothree business segments, as follows: - Darty - 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 theannouncement of the group entering into a sale and purchase agreement. Six months ended 31 January 2008 France UK Other Central Continuing Discontinued Group Darty Comet Costs Group Operations £m £m £m £m £m £m £m____________________________________________________________________________________________________________Revenue 1,087.8 1,025.6 432.9 - 2,546.3 389.7 2,936.0Retail profit/(loss) 78.1 45.2 8.0 (7.2) 124.1 31.7 155.8Share of joint ventures and associates (0.3) - - - (0.3) (1.7) (2.0)interest and taxationValuation gains and losses - - - - - (0.6) (0.6)____________________________________________________________________________________________________________Operating profit/(loss) 77.8 45.2 8.0 (7.2) 123.8 29.4 153.2____________________________________________________________________________________________________________ Finance costs (12.2) (1.2) (13.4)Finance income 2.6 0.1 2.7____________________________________________________________________________________________________________Finance costs - net (9.6) (1.1) (10.7)____________________________________________________________________________________________________________Profit before income tax 114.2 28.3 142.5Income tax expense (35.7) (10.0) (45.7)Loss on remeasurement - (39.8) (39.8)____________________________________________________________________________________________________________Profit for the period 78.5 (21.5) 57.0============================================================================================================ The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and discontinued operations are £3.4m and£5.0m respectively. The share of post tax profits of the joint ventures andassociates included within the operating profit for Darty and discontinuedoperations are £3.1m and £3.3m respectively. Six months ended 31 January 2007 France UK Other Central Continuing Discontinued Group Darty Comet Costs Group Operations £m £m £m £m £m £m £m__________________________________________________________________________________________________________Revenue 968.3 993.0 284.6 - 2,245.9 329.1 2,575.0Retail profit/(loss) 73.2 41.3 3.9 (6.9) 111.5 21.5 133.0Share of joint ventures and associates (0.2) - - - (0.2) (1.4) (1.6)interest and taxationDemerger award plan charge 0.1 - - - 0.1 - 0.1__________________________________________________________________________________________________________Operating profit/(loss) 73.1 41.3 3.9 (6.9) 111.4 20.1 131.5__________________________________________________________________________________________________________Finance costs (8.5) (1.0) (9.5)Finance income 3.9 0.2 4.1__________________________________________________________________________________________________________Finance costs - net (4.6) (0.8) (5.4)__________________________________________________________________________________________________________Profit before income tax 106.8 19.3 126.1Income tax expense (35.4) (7.6) (43.0)__________________________________________________________________________________________________________Profit for the period 71.4 11.7 83.1========================================================================================================== The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and discontinued operations are £2.8m and£3.8m respectively. The share of post tax profits of the joint ventures andassociates included within the operating profit for Darty and discontinuedoperations are £2.6m and £2.4m respectively. 3 Segmental analysis (contd.) Twelve months ended 31 January 2008 France UK Other Central Continuing Discontinued Group Darty Comet Costs Group Operations £m £m £m £m £m £m £m____________________________________________________________________________________________________________Revenue 1,895.7 1,731.6 687.1 - 4,314.4 665.8 4,980.2Retail profit/(loss) 111.3 44.2 3.7 (13.6) 145.6 48.4 194.0Share of joint ventures and associates (0.5) - - - (0.5) (3.1) (3.6)interest and taxationValuation gains/(losses) on options to - - - 0.6 0.6 (1.2) (0.6)acquire minority interests____________________________________________________________________________________________________________Operating profit/(loss) 110.8 44.2 3.7 (13.0) 145.7 44.1 189.8____________________________________________________________________________________________________________Finance costs (19.3) (2.2) (21.5)Finance income 6.4 0.2 6.6____________________________________________________________________________________________________________Finance costs - net (12.9) (2.0) (14.9)____________________________________________________________________________________________________________Profit before income tax 132.8 42.1 174.9 Income tax expense (41.4) (13.9) (55.3)Loss on remeasurement - (39.8) (39.8)____________________________________________________________________________________________________________Profit for the period 91.4 (11.6) 79.8============================================================================================================ The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and discontinued operations are £6.1m and£8.9m respectively. The share of post tax profits of the joint ventures andassociates included within the operating profit for Darty and discontinuedoperations are £5.6m and £5.8m respectively. Year ended 31 January 2007 France UK Other Central Continuing Discontinued Group Darty Comet Costs Group Operations £m £m £m £m £m £m £m____________________________________________________________________________________________________________Revenue 1,733.9 1,676.5 494.8 - 3,905.2 595.7 4,500.9Retail profit/(loss) 114.1 46.1 (2.4) (13.1) 144.7 36.3 181.0Share of joint ventures and associates (0.3) - - - (0.3) (2.4) (2.7)interest and taxationDemerger award plan charge (0.1) (0.1) (0.1) (0.2) (0.5) - (0.5)____________________________________________________________________________________________________________Operating profit/(loss) 113.7 46.0 (2.5) (13.3) 143.9 33.9 177.8____________________________________________________________________________________________________________ Finance costs (17.5) (1.8) (19.3)Finance income 6.6 0.3 6.9____________________________________________________________________________________________________________Finance costs - net (10.9) (1.5) (12.4)____________________________________________________________________________________________________________Profit before income tax 133.0 32.4 165.4Income tax expense (43.2) (12.8) (56.0)____________________________________________________________________________________________________________Profit for the period 89.8 19.6 109.4============================================================================================================ The share of operating profits of the joint ventures and associates includedwithin the retail profit for Darty and discontinued operations are £5.9m and£7.1m respectively. The share of post tax profits of the joint ventures andassociates included within the operating profit for Darty and discontinuedoperations are £5.6m and £4.7m respectively. 4 Results for the period The results from sales of electrical products plus associated services issubject to some seasonal fluctuations, with peak demand around Christmas and NewYear periods in the quarter ended 31 January. The total revenue for the Groupfor the six months to 31 January 2008 represented 59 per cent (six months ended31 January 2007: 57 per cent) of the total annual revenue in the twelve monthsended 31 January 2008 and 31 January 2007. 5 Discontinued operations On 30 January 2008 Kesa Electricals plc announced it had entered in to anagreement to sell BUT (the company's furniture and electricals business) to aconsortium of Colony Capital, Goldman Sachs & Merchant Equity Partners. Thebusiness to be sold comprised the BUT segment as reported in previous annualreports and accounts. The assets and liabilities related to BUT have beenpresented as held for sale following the announcement. As the operations of BUTrepresented a separate business segment, the disposal group has been classifiedas a discontinued operation in the consolidated income statement. In the cashflow statement, the cash flows of BUT have been aggregated with those of thecontinuing operations, but are shown separately in the note below. As announced in the Proposed Disposal Circular, the disposal is expected tocomplete on 31 March 2008. The information presented in this note is presentedat the lower of cost and fair value less costs to sell as prescribed in IFRS 5.As a result of this treatment an impairment charge of £39.8m has been recognisedin the Group income statement in the 12 months to 31 January 2008. Assets and liabilities classified as held for sale 31 January 2008 £m________________________________________________________________________________Assets classified as held for saleGoodwill 156.7Intangible Assets 8.8Property, plant and equipment 150.7Available for sale financial assets 1.4Cash and cash equivalents 34.9Other assets 236.6________________________________________________________________________________Assets classified as held for sale 589.1 Liabilities classified as held for saleLoan and capital borrowings (10.9)Other current liabilities (178.2)Non-current liabilities (23.2)________________________________________________________________________________Liabilities classified as held for sale (212.3)________________________________________________________________________________Net assets of disposal group 376.8________________________________________________________________________________ Results from discontinued operations The results from discontinued operations which have been included in theconsolidated income statement, are derived below. Six months Six months Twelve months Year ended 31 ended 31 ended 31 ended 31 January 2007 January 2008 January 2007 January 2008 £m £m £m £m___________________________________________________________________________________________________________________Revenue 389.7 329.1 665.8 595.7Cost of sales (228.1) (218.7) (406.0) (391.4)___________________________________________________________________________________________________________________Gross profit 161.6 110.4 259.8 204.3 Share of post tax profit in joint venture and associates 3.3 2.4 5.8 4.7Distribution costs (29.4) (25.4) (54.6) (49.2)Selling expenses (104.6) (64.7) (163.5) (125.8)Administrative expenses (14.3) (6.8) (24.4) (12.3)Other income 12.8 4.2 21.0 12.2___________________________________________________________________________________________________________________Operating profit 29.4 20.1 44.1 33.9Finance income (1.2) (1.0) (2.2) (1.8)Finance costs 0.1 0.2 0.2 0.3___________________________________________________________________________________________________________________Profit before taxation 28.3 19.3 42.1 32.4Taxation relating to performance of business held for sale (10.0) (7.6) (13.9) (12.8)Loss on remeasurement (39.8) - (39.8) -___________________________________________________________________________________________________________________Profit for the period from discontinued operations (21.5) 11.7 (11.6) 19.6___________________________________________________________________________________________________________________ Discontinued operations (cont'd)Cash flows from discontinued operations Twelve months Year ended 31 ended 31 January 2008 January 2007 £m £m________________________________________________________________________________Operating activities 51.8 43.3Investing activities (24.5) (24.8)Financing activities (15.1) (28.9)________________________________________________________________________________Total Cash flows 12.2 (10.4)________________________________________________________________________________ Cash flows from investing activities relate to interest received and capitalexpenditure. Cash flows from financing activities comprise dividends paid to shareholders and minority interests, proceeds and repayment of long term borrowings and finance lease principal payments. 6 Dividends Twelve months Year ended ended 31 31 January January 2008 2007 £m £m________________________________________________________________________________Final Paid: 10.05 pence (2006: 9.15 pence) per share 53.2 48.5Interim paid 18.5 17.2________________________________________________________________________________ 71.7 65.7================================================================================ The directors have declared a second interim dividend of 10.8 pence per share,which will absorb an estimated £57.2m of shareholders' funds. 7 Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toshareholders by 529.2m shares (31 January 2007: 529.5m), being the weightedaverage number of ordinary shares in issue. There is no difference between diluted and basic earnings per share.Supplementary adjusted earnings per share figures are presented. These excludethe effects of the Demerger Award Plan charge. Six months ended Six months ended Twelve months Year ended 31 January 2008 31 January 2007 31 January 2008 31 January 2007 Earnings Per Earnings Per Earnings Per Earnings Per share share share share amount amount amount amount £m pence £m pence £m pence £m pence____________________________________________________________________________________________Basic earnings per shareEarnings attributable 56.0 10.6 82.1 15.5 79.8 15.1 109.4 20.7to ordinaryshareholdersAdjustmentsDemerger Award Plan - - - - - - 0.5 0.1chargeTax effect of - - - - - - (0.1) -adjustments___________________________________________________________________________________________Basic - adjusted 56 10.6 82.1 15.5 79.8 15.1 109.8 20.8earnings per share___________________________________________________________________________________________ Earnings per shareContinuing operations 78.5 14.8 71.4 13.5 91.4 17.3 89.8 17Discontinued (21.5) (4.1) 11.7 2.2 (11.6) (2.2) 19.6 3.7operations___________________________________________________________________________________________Total for the period 57 10.7 83.1 15.7 79.8 15.1 109.4 20.7=========================================================================================== Earnings per share for the twelve months to 31 January 2008 before the BUTgoodwill impairment charge of £39.8m (2007: £nil) was 22.6 pence (2007: 20.7pence). 8 Intangible assets Goodwill Software Other Total intangibles £m £m £m £m__________________________________________________________________________________________________Opening net book amount at 1 February 2007 182.7 18.2 17.0 217.9Additions 98.6 16.6 31.1 146.3Reclassified as assets of disposal group held for sale (156.7) (5.9) (2.9) (165.5)Disposals (1.1) - - (1.1)Effect of foreign exchange rate changes 28.2 2.9 2.7 33.8Amortisation, impairment and other movements (39.8) (4.4) (9.9) (54.1)__________________________________________________________________________________________________Closing net book amount at 31 January 2008 111.9 27.4 38.0 177.3================================================================================================== Goodwill Software Other Total intangibles £m £m £m £m__________________________________________________________________________________________________Opening net book amount 1 February 2006 180.1 11.7 9.0 200.8Additions 8.1 9.3 9.2 26.6Effect of foreign exchange rate changes (5.5) (0.4) (0.6) (6.5)Amortisation, impairment and other movements - (2.4) (0.6) (3.0)__________________________________________________________________________________________________Closing net book amount 31 January 2007 182.7 18.2 17.0 217.9================================================================================================== 9 Property plant and equipment £m__________________________________________________________________________________________________________Opening net book amount at 1 February 2007 513.9Additions and assets acquired 118.5Reclassified as assets of disposal group held for sale at period end (150.7)Disposals (6.6)Effect of foreign exchange rate changes 55.5Depreciation, impairment and other movements (76.2)__________________________________________________________________________________________________________Closing net book amount at 31 January 2008 454.4========================================================================================================== During the twelve month period the group acquired £101.6m of property plant and equipment. Of theseadditions £71.8m relates to store refurbishments and equipment, £1.2m to vehicles, with a further £13.7mof IT upgrades, £11.5m of furniture and £3.4m of assets in the course of construction. The remainingbalance of £16.9m relates to additions made by discontinued operations. £m__________________________________________________________________________________________________________Opening net book amount at 1 February 2006 530.8Additions 79.9Disposals (5.6)Effect of foreign exchange rate changes (12.7)Depreciation, impairment and other movements (78.5)__________________________________________________________________________________________________________Closing net book amount at 31 January 2007 513.9========================================================================================================== Capital Commitments Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m__________________________________________________________________________________________________________Contracts placed for future capital expenditure not provided for:- property, plant and equipment 9.6 2.6- intangible assets 0.2 -__________________________________________________________________________________________________________Total 9.8 2.6========================================================================================================== 10 Cash and cash equivalents Twelve months Year ended 31 ended 31 January January 2008 2007 £m £m________________________________________________________________________________Cash at bank and in hand 113.1 53.0Short-term bank deposit and investments 50.1 110.3Less: cash included in assets of disposal group (34.9) -________________________________________________________________________________Total 128.3 163.3================================================================================ For the purpose of the consolidated cash flow statement, cash, cash equivalentsand bank overdrafts comprise the following: Twelve months Year ended 31 ended 31 January January 2008 2007 £m £m______________________________________________________________________________________Cash at bank and in hand 113.1 53.0Bank overdrafts (9.6) (103.5)Short-term bank deposit and investments 50.1 110.3Cash, cash equivalents and bank overdrafts of disposal group (28.6) -______________________________________________________________________________________Total cash, cash equivalents and bank overdrafts 125.0 59.8====================================================================================== The effective interest rate on short-term deposits held at 31 January 2008 was4.75 per cent (31 January 2007: 5.0 per cent) and these deposits had an averagematurity of 1.0 day (31 January 2007: 4.5 days). As part of the Group's underlying insurance arrangements, £72.4m of bankdeposits and other investments (31 January 2007: £71.8m) are pledged to meetexpected future costs arising from the provision of extended warranty cover. 11 Share capital At 31 January 2008 and 31 January 2007 Number m £m________________________________________________________________________________AuthorisedOrdinary shares of 25 pence each 1,000 250.0 Issued and fully paidOrdinary shares of 25 pence each 529.6 132.4================================================================================ 12 Retained earnings £m___________________________________________________________________________________At 1 February 2007 (503.1)Profit for the period - continuing operations 91.4Loss for the period - discontinued operations (11.6)Dividends (71.7)Employee share schemes 0.7Tax on employee share schemes (0.1)Investment in ESOP shares (0.3)Net SORIE pension movement 8.3___________________________________________________________________________________At 31 January 2008 (486.4)=================================================================================== £m___________________________________________________________________________________At 1 February 2006 (564.7) Profit for the period - continuing operations 89.8Profit for the period - discontinued operations 19.6Dividends (65.7)Employee share schemes (0.2)Tax on employee share schemes (1.2)Investment in ESOP shares (0.3)Net SORIE pension movement 19.6___________________________________________________________________________________At 31 January 2007 (503.1)=================================================================================== 13 Other reserves Other Demerger Translation Available Hedging Total reserve reserve reserve for sale reserve Other Investments reserves reserve £m £m £m £m £m £m______________________________________________________________________________________________________At 1 February 2007 (15.1) 741.8 (7.7) 15.3 2.6 736.9 Exchange differences - - 32.0 - - 32.0Available for sale assets- fair value gains net of tax - - - (3.9) - (3.9)Cash flow hedges- fair value gains net of tax - - - - (0.6) (0.6)- recycled and reported in net profit - - - - (0.2) (0.2)______________________________________________________________________________________________________At 31 January 2008 (15.1) 741.8 24.3 11.4 1.8 764.2______________________________________________________________________________________________________ Other Demerger Translation Available Hedging Total reserve reserve reserve for sale reserve Other Investments reserves reserve £m £m £m £m £m £m______________________________________________________________________________________________________At 1 February 2006 (26.0) 741.8 (2.0) 13.7 (0.7) 726.8 Exchange differences - - (5.7) - - (5.7)Available for sale assets- fair value gains net of tax - - - 1.6 - 1.6Cash flow hedges- fair value gains net of tax - - - - 2.7 2.7- recycled and reported in net profit - - - - 0.6 0.6Put and call options movement 10.9 - - - - 10.9______________________________________________________________________________________________________At 31 January 2007 (15.1) 741.8 (7.7) 15.3 2.6 736.9====================================================================================================== The Demerger reserve represents a reserve created on demerger and isnon-distributable. Exchange differences arising from the translation of the net investment inforeign operations on consultation are included within the Translation reserve. The available for sale investments reserve includes movements, net of deferredincome tax, in the fair value of available for sale investments. On disposal ofthe investment, the amount taken through the reserve is recycled out through theincome statement. The movement in the fair value of cashflow hedges, net of deferred income tax,which are deemed to be effective is taken through the Hedging reserve. On expiryof the cash flow hedge, the amount in the Hedging reserve is recycled throughthe Income statement. If a hedge is deemed ineffective, the amount in the hedgeis immediately recycled out through the income statement. Amounts included within the Other reserve represent the movement in respect ofput and call options entered into or exercised in prior periods. 14 Statement of changes in shareholders' equity Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m________________________________________________________________________________Profit attributable to shareholders 79.8 109.4Dividends (71.7) (65.7)Exchange differences 32.0 (5.7)Employee share schemes 0.7 (0.2)Tax on employee share schemes (0.1) (1.2)Available for sale assets- fair value gains net of tax (3.9) 1.6Cash flow hedges- fair value gains net of tax (0.6) 2.7- recycled and reported in net profit (0.2) 0.6Investment in ESOP shares (0.3) (0.3)Net actuarial gain on retirement benefit obligations 8.3 19.6Impact of put options exercised in the period - 10.9Opening shareholders' equity 366.2 294.5________________________________________________________________________________Closing shareholders' equity 410.2 366.2================================================================================ Closing shareholders' equity of £410.2m at 31 January 2008 includes £370.2mrelating to discontinued operations. 15 Cash flow from operating activities Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m_______________________________________________________________________________________________ Profit after income tax from continuing operations 91.4 89.8Adjustments for:Income tax 41.9 43.5Interest income (6.4) (6.6)Interest expense 19.3 17.5Share of results of joint venture before interest and taxation (4.6) (5.0)Share of results of associates before interest and taxation (1.5) (0.9)_______________________________________________________________________________________________Operating Profit 140.1 138.3 Operating (loss)/profit of discontinued operations (1.5) 29.2 Depreciation and amortisation 88.4 80.2Net Impairment of property, plant and equipment 40.4 1.1(Profit)/Loss on disposal of property, plant and equipment (3.0) 4.6Increase in inventories (63.7) (5.5)Increase in trade and other receivables (33.5) (42.4)Increase in payables 153.7 102.4_______________________________________________________________________________________________Net cash inflow from operating activities 320.9 307.9=============================================================================================== Tax includes joint venture and associate tax of £0.5m (2007: £0.3m). 16 Reconciliation of net cash flow to movement in net debt Twelve months ended 31 January 2008 At Cash flow Exchange At 31 January difference 1 February 2008 2007 £m £m £m £m__________________________________________________________________________________________________________________Cash at bank and in hand 113.1 53.9 6.2 53.0Overdrafts (9.6) 100.7 (6.8) (103.5)Short-term deposits and investments 50.1 (62.0) 1.8 110.3__________________________________________________________________________________________________________________ 153.6 92.6 1.2 59.8 Borrowings falling due within one year (2.3) 0.4 (0.3) (2.4)Borrowings falling due after one year (325.7) (91.3) (32.0) (202.4)Finance leases (7.6) (4.4) (0.5) (2.7)__________________________________________________________________________________________________________________ (335.6) (95.3) (32.8) (207.5) Other current investments 51.2 (21.1) - 72.3__________________________________________________________________________________________________________________Total (130.8) (23.8) (31.6) (75.4)__________________________________________________________________________________________________________________ 17 Reconciliation of cash flow to movement in net debt Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m_________________________________________________________________________________________________Net cash inflow/(outflow) from cash and cash equivalents 92.6 (43.8)Cash (inflow)/outflow from change in borrowings and lease financing (95.3) 138.1Cash inflow from change in other current investments (21.1) (6.9)_________________________________________________________________________________________________Change in net debt resulting from cash flows (23.8) 87.4_________________________________________________________________________________________________Translation differences (31.6) 3.5_________________________________________________________________________________________________Movement in net debt in the year (55.4) 90.9_________________________________________________________________________________________________Net debt at start of year (75.4) (166.3)_________________________________________________________________________________________________Net debt at end of year (130.8) (75.4)_________________________________________________________________________________________________ 18 Acquisitions The group has made a number of acquisitions during the period, of which thematerial transaction has been disclosed separately and the remainder shown inaggregate. Menaje Del Hogar On 17 September 2007, Kesa completed the acquisition of Menaje del HogarSocieded Anonima (MH), a specialist electrical retailer. Consideration was €100min cash for 100% of the voting rights and share capital of the business,together with €31m net debt assumed. Menaje del Hogar forms part of the 'Other'segment. A summary of the fair values of the assets and liabilities arising is set outbelow: Book values Fair value Provisional adjustments fair values acquired £m £m £m__________________________________________________________________________________________Intangible assets 2.1 14.2 16.3Property, plant and equipment 14.5 - 14.5Inventory 32.8 - 32.8Cash, cash equivalents and bank overdrafts (22.0) - (22.0)Trade and other receivables 6.4 - 6.4Trade and other payables (52.1) - (52.1)Other current liabilities (2.7) - (2.7)Non-current liabilities (4.1) (4.3) (8.4)__________________________________________________________________________________________Total fair value of net liabilities acquired (25.1) 9.9 (15.2)__________________________________________________________________________________________Goodwill arising on the acquisition was as follows: Cash consideration 69.8Transaction costs 1.6Net liabilities acquired 15.2__________________________________________________________________________________________Goodwill 86.6__________________________________________________________________________________________ The goodwill arising on these acquisitions is attributable to the anticipatedprofitability of the new markets and product ranges to which the Group hasgained access, and to additional profitability and operating efficiencies inrespect of existing markets. From the date of acquisition to 31 January 2008, Menaje del Hogar contributed£70.2m to revenue and £1.4m to retail profit. If the acquisition of Menaje del Hogar had been completed on the first day ofthe financial year, continuing Group revenue would have been approximately£4,424.0m and Group retail profit £147.8m. Fair value adjustments provisionally made are in respect of independentvaluations of Intangibles and their related tax effects. Further adjustments to goodwill and the fair value of assets and liabilitiesacquired may be necessary when additional information is available concerningsome of the judgmental areas. 18 Acquisitions (cont'd) Other acquisitions During the period, the Group acquired four businesses in France; Obry in April,Morieux in July, Modimm in August and ETS Cabanes in October; which are includedin the Discontinued operations segment and are furniture and electrical retailbusinesses. The Group also acquired two businesses in Italy; Rho in March andCarretti in April; which form part of the Other segment and are electricalretail businesses. A summary of the fair value of the assets and liabilities arising on otheracquisitions during the period is set out below: Book values Fair value Provisional adjustments fair values acquired £m £m £m_____________________________________________________________________________________________Intangible assets 0.3 0.3Property, plant and equipment 2.7 (0.3) 2.4Inventory 7.6 (0.3) 7.3Cash, cash equivalents and bank overdrafts 11.8 11.8Trade and other receivables 1.6 1.6Other current assets 0.7 0.7Trade and other payables (4.4) (4.4)Other current liabilities (3.6) (0.1) (3.7)Deferred tax - 0.3 0.3Non-current liabilities (1.3) (0.2) (1.5)_____________________________________________________________________________________________Total fair value of net assets acquired 15.4 (0.6) 14.8_____________________________________________________________________________________________ Goodwill arising on these acquisitions was as follows: Cash consideration 26.5Deferred consideration (0.1)Transaction costs 0.4Net assets acquired (14.8)_____________________________________________________________________________________________Goodwill 12.0_____________________________________________________________________________________________ None of the Other acquisitions are individually or in aggregate material and forthis reason no pre and post acquisition results are disclosed. The goodwill arising on all these acquisitions is attributable to theanticipated profitability of the new markets and product ranges to which theGroup has gained access and to additional profitability and operatingefficiencies in respect of existing markets. Further adjustments to goodwill and the fair value of assets and liabilitiesacquired may be necessary when additional information is available concerningsome of the judgmental areas. The fair value of net assets acquired in the year ended 31 January 2007 was£1.2m. The book value of assets acquired approximated to fair value and nomaterial adjustments have been made during the year to 31 January 2008. There have been no acquisitions since the balance sheet date. 19 Related party transactions Transactions carried out with related parties in the normal course of business are summarisedbelow. Joint venture and associates Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m___________________________________________________________________________________________________Dividends receivable 8.4 4.4___________________________________________________________________________________________________ The period-end balances with joint venture and associates are: Amounts recoverable from joint venture and associates at 31 January 2008 2.7 2.3=================================================================================================== Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m___________________________________________________________________________________________________Value of transactions with associated undertakings 275.0 262.6=================================================================================================== The associated undertakings provide credit facilities to customers on productsales. Other related party transactions Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m___________________________________________________________________________________________________Rent payments 0.9 0.8Other payments for services 0.1 1.1=================================================================================================== Rent payments include £0.3m (2007: £0.3m) paid to members of key management, and£0.6m (2007: £0.5m) paid to directors of subsidiary undertakings, who are notpart of key management. Other payments for services provided by related parties principally compriseadministrative, accounting, information technology and human resource services£0.1 (2007: £0.9m) was paid to members of key management and £nil (2007: £0.2m)was paid to directors of subsidiary undertakings for other services providedduring the period. 20 Contingent liabilities The group has the following quantifiable contingent liabilities, which arose inthe ordinary course of business and which have not been provided for in theseaccounts since no actual liability is expected to arise: Twelve months Year ended ended 31 January 31 January 2008 2007 £m £m________________________________________________________________________________Obligations under forward foreign exchange contracts 121.9 94.2================================================================================ 21 Retirement benefits In the UK, the Group operates a defined benefit scheme (the "Comet Pensionscheme") which was closed to new entrants on 1 April 2004. All employees who donot participate in the Comet Pension Scheme are offered access to a groupdefined contribution scheme. In France, the main pension benefits are provided through the state system. TheGroup is also required to pay lump sums ("retirement indemnities") to employeeswhen they retire from service. In addition, the Group provides a supplementaryfunded, defined benefit plan ("Supplementary Pension Plan") for its topexecutives. The amounts recognised in the balance sheet are as follows: Twelve months ended Year ended 31 January 2008 31 January 2007 ___________________________________________________ UK France Total UK France Total £m £m £m £m £m £m Present value of defined benefit obligations 273.7 32.9 306.6 279.3 35.6 314.9Fair value of plan assets (217.3) (19.6) (236.9) (208.8) (19.4) (228.2)Unrecognised prior service costs - - - - 0.3 0.3Currency translation movement - (0.5) (0.5) - - - ___________________________________________________Net liability recognised in the balance sheet 56.4 12.8 69.2 70.5 16.5 87.0 ___________________________________________________ The movement in the liability in the twelve months to January 2008 resultsprincipally from an appreciation of the sterling discount rate to 5.95% (2007:5.20%), offset by declines in the fair values of plan assets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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