Full Year Results - Part 2

RNS Number : 5941L

Home Retail Group Plc

29 April 2015

 

Consolidated income statement                                                  

For the 52 weeks ended 28 February 2015

		52 weeks ended 28 February 2015				52 weeks ended 1 March 2014
		Before exceptional items	Exceptional items (note 3)	After exceptional items		Before exceptional items	Exceptional items (note 3)	After exceptional items
	Notes	£m	£m	£m		£m	£m	£m
Revenue		5,710.4	-	5,710.4		5,663.0	-	5,663.0
Cost of sales		(3,937.4)	-	(3,937.4)		(3,899.2)	-	(3,899.2)
Gross profit		1,773.0	-	1,773.0		1,763.8	-	1,763.8
Net operating expenses		(1,635.6)	(35.5)	(1,671.1)		(1,652.4)	(41.4)	(1,693.8)
Operating profit/(loss)		137.4	(35.5)	101.9		111.4	(41.4)	70.0
- Finance income		3.4	-	3.4		10.5	-	10.5
- Finance expense		(11.5)	-	(11.5)		(9.3)	-	(9.3)
Net financing income/(expense)	4	(8.1)	-	(8.1)		1.2	-	1.2
Profit/(loss) before tax		129.3	(35.5)	93.8		112.6	(41.4)	71.2
Taxation		(29.3)	7.1	(22.2)		(26.6)	9.4	(17.2)
Profit/(loss) for the year attributable to equity holders of the Company		100.0	(28.4)	71.6		86.0	(32.0)	54.0
Earnings per share				pence				pence
- Basic	6			9.4				6.8
- Diluted	6			8.9				6.6
				pence				pence
Proposed final dividend per share				2.8				2.3
Interim dividend per share				1.0				1.0
Proposed total dividend per share				3.8				3.3

Non-GAAP measures			52 weeks ended 28 February 2015			52 weeks ended 1 March 2014
Reconciliation of profit before tax (PBT) to benchmark PBT	Notes		£m			£m
Profit before tax			93.8			71.2
Adjusted for:
Amortisation of acquisition intangibles			1.8			1.8
Post-employment benefit scheme administration costs			1.9			1.9
Adjustments in respect of store impairment and property provisions			(0.1)			(2.1)
Exceptional items	3		35.5			41.4
Financing fair value remeasurements	4		1.0			(9.0)
Financing impact on post-employment benefit obligations	4		3.0			3.3
Discount unwind on non-benchmark items	4		6.7			6.9
Balance sheet review			(11.5)			-
Benchmark PBT			132.1			115.4
Benchmark earnings per share			pence			pence
- Basic	6		13.0			10.4
- Diluted	6		12.4			10.1

 

Consolidated statement of comprehensive income

For the 52 weeks ended 28 February 2015

		52 weeks ended 28 February 2015	52 weeks ended 1 March  2014
		£m	£m
Profit for the year attributable to equity holders of the Company		71.6	54.0
Items that may be reclassified subsequently to profit or loss:
Net change in fair value of cash flow hedges
- Foreign currency forward exchange contracts		49.1	(72.2)
Net change in fair value of cash flow hedges transferred to inventory
- Foreign currency forward exchange contracts		(3.3)	13.7
Fair value movements on available-for-sale financial assets		0.7	1.1
Fair value movements on available-for-sale financial assets transferred to the income statement		-	(3.4)
Currency translation differences		(1.5)	(3.6)
Tax (charge)/credit in respect of items that will be or have been recycled		(9.1)	13.1
		35.9	(51.3)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of the net defined benefit liability		(55.6)	(23.8)
Tax credit in respect of items not recycled		11.1	3.3
		(44.5)	(20.5)
Other comprehensive income for the year, net of tax		(8.6)	(71.8)
Total comprehensive income for the year attributable to equity holders of the Company		63.0	(17.8)

 

Consolidated balance sheet

At 28 February 2015

		28 February 2015	1 March 2014
	Notes	£m	£m
ASSETS
Non-current assets
Goodwill		1,543.9	1,543.9
Other intangible assets		235.5	193.6
Property, plant and equipment		412.9	456.7
Deferred tax assets		44.6	41.3
Trade and other receivables		1.4	1.8
Other financial assets		10.6	9.9
Total non-current assets		2,248.9	2,247.2
Current assets
Inventories		963.0	902.4
Trade and other receivables		790.0	712.1
Current tax assets		13.2	10.4
Other financial assets		30.0	1.0
Cash and cash equivalents		309.3	331.0
Total current assets		2,105.5	1,956.9
Non-current assets classified as held for sale		18.3	-
Total assets		4,372.7	4,204.1
LIABILITIES
Non-current liabilities
Trade and other payables		(46.4)	(47.4)
Provisions	7	(126.2)	(190.0)
Deferred tax liabilities		(24.3)	(12.9)
Post-employment benefits		(114.4)	(76.6)
Total non-current liabilities		(311.3)	(326.9)
Current liabilities
Trade and other payables		(1,283.1)	(1,115.3)
Provisions	7	(95.7)	(46.1)
Other financial liabilities		(2.9)	(36.5)
Current tax liabilities		(6.8)	(5.8)
Total current liabilities		(1,388.5)	(1,203.7)
Total liabilities		(1,699.8)	(1,530.6)
Net assets		2,672.9	2,673.5
EQUITY
Share capital		81.3	81.3
Capital redemption reserve		6.4	6.4
Merger reserve		(348.4)	(348.4)
Other reserves		(61.5)	(52.3)
Retained earnings		2,995.1	2,986.5
Total equity		2,672.9	2,673.5

 

Consolidated statement of changes in equity

For the 52 weeks ended 28 February 2015

			Attributable to equity holders of the Company
			Capital
		Share	redemption	Merger	Other	Retained
		capital	reserve	reserve	reserves	earnings	Total
		£m	£m	£m	£m	£m	£m
Balance at 2 March 2014		81.3	6.4	(348.4)	(52.3)	2,986.5	2,673.5
Profit for the year		-	-	-	-	71.6	71.6
Other comprehensive income		-	-	-	35.6	(44.2)	(8.6)
Total comprehensive income for the year ended 28 February 2015		-	-	-	35.6	27.4	63.0
Transactions with owners:
Movement in share-based compensation reserve		-	-	-	-	8.6	8.6
Net movement in own shares		-	-	-	(44.8)	(3.7)	(48.5)
Tax credit related to share-based compensation  reserve		-	-	-	-	1.9	1.9
Equity dividends paid during the year		-	-	-	-	(25.3)	(25.3)
Other distributions		-	-	-	-	(0.3)	(0.3)
Total transactions with owners		-	-	-	(44.8)	(18.8)	(63.6)
Balance at 28 February 2015		81.3	6.4	(348.4)	(61.5)	2,995.1	2,672.9
			Attributable to equity holders of the Company
			Capital
		Share	redemption	Merger	Other	Retained
		capital	reserve	reserve	reserves	earnings	Total
		£m	£m	£m	£m	£m	£m
Balance at 3 March 2013		81.3	6.4	(348.4)	31.9	2,961.3	2,732.5
Profit for the year		-	-	-	-	54.0	54.0
Other comprehensive income		-	-	-	(49.0)	(22.8)	(71.8)
Total comprehensive income for the year ended 1 March 2014		-	-	-	(49.0)	31.2	(17.8)
Transactions with owners:
Movement in share-based compensation reserve		-	-	-	-	14.5	14.5
Net movement in own shares		-	-	-	(35.2)	(1.9)	(37.1)
Tax credit related to share-based compensation  reserve		-	-	-	-	5.5	5.5
Equity dividends paid during the year		-	-	-	-	(23.9)	(23.9)
Other distributions		-	-	-	-	(0.2)	(0.2)
Total transactions with owners		-	-	-	(35.2)	(6.0)	(41.2)
Balance at 1 March 2014		81.3	6.4	(348.4)	(52.3)	2,986.5	2,673.5

Further details on equity movements are shown in note 8.

Consolidated statement of cash flows

For the 52 weeks ended 28 February 2015

		52 weeks ended  28 February 2015	52 weeks ended  1 March 2014
	Notes	£m	£m
Cash flows from operating activities
Cash generated from operations	9	211.8	161.0
Tax paid		(12.1)	(17.6)
Disposal of leasehold property		(9.0)	-
Cash flows from operating activities		190.7	143.4
Purchase of property, plant and equipment		(81.2)	(72.5)
Purchase of other intangible assets		(93.3)	(102.8)
Proceeds from the disposal of property, plant and equipment - freehold property		30.0	-
Proceeds from the disposal of property, plant and equipment - other		6.7	2.2
Loans repaid by associates		-	3.5
Disposal of investments		-	21.7
Interest received		0.7	0.6
Net cash used in investing activities		(137.1)	(147.3)
Cash flows from financing activities
Purchase of shares for Employee Share Trust		(50.0)	(37.4)
Proceeds from disposal of shares held by Employee Share Trust		1.5	0.3
Dividends paid		(25.3)	(23.9)
Net cash used in financing activities		(73.8)	(61.0)
Net decrease in cash and cash equivalents		(20.2)	(64.9)
Movement in cash and cash equivalents
Cash and cash equivalents at the beginning of the year		331.0	396.0
Effect of foreign exchange rate changes		(1.5)	(0.1)
Net decrease in cash and cash equivalents		(20.2)	(64.9)
Cash and cash equivalents at the end of the year		309.3	331.0

Analysis of net cash/(debt)

At 28 February 2015

		28 February  2015	1 March  2014
Non-GAAP measures		£m	£m
Financing net cash:
Cash and cash equivalents		309.3	331.0
Total financing net cash		309.3	331.0
Operating net debt:
Off balance sheet operating leases		(1,914.4)	(2,046.2)
Total operating net debt		(1,914.4)	(2,046.2)
Total net debt		(1,605.1)	(1,715.2)

The Group uses the term 'total net debt' to highlight the Group's aggregate net indebtedness to banks and other financial institutions together with debt-like liabilities, notably operating leases.  The gross lease commitments are £2,342.2m (2014: £2,627.1m), the discounted value of these leases is £1,914.4m (2014: £2,046.2m) based upon discounting the existing lease commitments at the Group's estimated long-term cost of borrowing of 4.1% (2014: 5.0%).

Notes

For the 52 weeks ended 28 February 2015

1. BASIS OF PREPARATION

The financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated statement of cash flows and related notes, is derived from the full Group consolidated financial statements for the 52 weeks to 28 February 2015 and does not constitute full accounts within the meaning of Section 435 (1) and (2) of the Companies Act 2006.  The Group's Annual Report and Financial Statements 2015, on which the auditors have given an unqualified audit report and which does not contain a statement under Section 498 (2) or (3) of the Companies Act 2006, will be delivered to the Registrar of Companies in due course, and made available to shareholders in June 2015.   The financial year represents the 52 weeks to 28 February 2015 (prior financial year 52 weeks to 1 March 2014).

The Group consolidated financial statements are presented in sterling, rounded to the nearest hundred thousand.  They are prepared on a going concern basis and under the historic cost basis modified for the revaluation of certain financial instruments, share-based payments and post-employment benefits.  The principal accounting policies adopted by Home Retail Group are set out in Home Retail Group plc's Annual Report and Financial Statements dated 1 March 2014.  With the exception of those changes in accounting standards which are effective for the first time for the current period, as detailed below, these policies have been consistently applied to all the periods presented. 

Changes in accounting standards

There are no new standards, amendments to existing standards or interpretations which are effective for the first time during the year ended 28 February 2015 that have a material impact on the Group.

At the balance sheet date there are a number of new standards and amendments to existing standards in issue but not yet effective, including IFRS 15 'Revenue from contracts with customers' which is effective for periods beginning on or after 1 January 2017 and IFRS 9 'Financial Instruments', which is effective for periods beginning on or after 1 January 2018. The Group has not early-adopted any of these new standards or amendments to existing standards and the Group will assess their full impact in due course. There are no other new standards, amendments to existing standards or interpretations that are not yet effective that would be expected to have a material impact on the Group.

2. NON-GAAP FINANCIAL INFORMATION

Home Retail Group has identified certain measures that it believes will assist the understanding of the performance of the business. The measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted measures. The non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures of performance but Home Retail Group has included them as it considers them to be important comparables and key measures used within the business for assessing performance.  The following are the key non-GAAP measures identified by Home Retail Group:

Exceptional items

Items which are both non-recurring and material in either size or nature are presented as exceptional items within their relevant income statement line.  The separate reporting of exceptional items helps provide a better indication of underlying performance of the Group.  Examples of items which may be recorded as exceptional items are restructuring costs and the profits and/or losses on the disposal of businesses.

Benchmark measures

The Group uses the following terms as measures which are not formally recognised under IFRS:

·	Benchmark operating profit is defined as operating profit before amortisation of acquisition intangibles, post-employment benefit scheme administration costs, store impairment and onerous lease charges or releases and costs or income associated with store closures and exceptional items.
·	Benchmark profit before tax (benchmark PBT) is defined as profit before amortisation of acquisition intangibles, post-employment benefit scheme administration costs, store impairment and onerous lease charges or releases and costs or income associated with store closures, exceptional items, financing fair value remeasurements, financing impact on post-employment benefit obligations, the discount unwind on non-benchmark items and taxation.
·	Basic benchmark earnings per share (benchmark EPS) is defined as benchmark PBT less taxation attributable to benchmark PBT, divided by the weighted average number of shares in issue (excluding shares held in Home Retail Group's share trusts net of vested but unexercised share awards).

These measures are considered useful in that they provide investors with an alternative means to evaluate the underlying performance of the Group's operations.

Total net debt

The Group uses the term 'total net debt' which is considered useful in that it highlights the Group's aggregate net indebtedness to banks and other financial institutions together with debt-like liabilities, notably operating leases.

3. EXCEPTIONAL ITEMS	52 weeks ended 28 February 2015	52 weeks ended 1 March 2014
	£m	£m
Argos transformation and other restructuring charges	(31.4)	(27.8)
Customer redress - Payment Protection Insurance	(4.1)	(25.0)
Warranty insurance	-	11.4
Exceptional items in operating profit	(35.5)	(41.4)
Tax on exceptional items in profit before tax	7.1	9.4
Exceptional loss after tax for the year	(28.4)	(32.0)
Exceptional restructuring charges totalling £31.4m (FY14: £27.8m) were incurred during the 52 weeks ended 28 February 2015. These charges relate to £12.2m (FY14: £19.0m) in Argos in respect of the ongoing project to transform Argos into a digital retail leader; £6.2m (FY14: £6.2m) in Homebase in respect of costs incurred as part of a Homebase head office restructuring program together with the closure of a distribution centre in FY16 which were both related to the recently announced store exit program; and Group restructuring costs of £13.0m (FY14: £2.6m) principally relating to the transitioning to Fujitsu of Information Systems infrastructure and services that support the Group's operations. Financial Services offers Payment Protection Insurance to its customers. In response to an industry wide review by the Financial Conduct Authority, a full investigation was undertaken in FY14 with the support of an independent expert. As a result, an exceptional charge of £25.0m was recognised. In FY15 an additional charge of £4.1m has been recognised. This charge principally reflects an anticipated increase in the operational costs expected to be incurred in respect of administering future customer redress payments. Until June 2010, Allianz Insurance provided Home Retail Group an underwriting service for warranty products sold in both Argos and Homebase. Allianz Insurance notified Home Retail Group in FY14 that under a profit share arrangement relating to the run off of these historical policies, the Group was due commission income of £11.4m. 4. NET FINANCING INCOME/(EXPENSE) 52 weeks ended 28 February 2015 52 weeks ended 1 March 2014 £m £m Finance income: Bank deposits 0.7 0.3 Financing fair value remeasurements - net exchange gains 2.7 6.8 Financing fair value remeasurements - available-for-sale financial assets - 3.4 Total finance income 3.4 10.5 Finance expense: Unwinding of discounts (7.5) (8.1) Financing fair value remeasurements - net exchange losses (3.7) (1.2) Interest expense on post-employment benefit liabilities (3.0) (3.3) Other finance expense (1.2) - Total finance expense (15.4) (12.6) Less: finance expense charged to Financial Services cost of sales 3.9 3.3 Total net finance expense (11.5) (9.3) Net financing income/(expense) (8.1) 1.2

Included within unwinding of discounts is a £6.7m charge (2014: £6.9m) relating to the discount unwind on non-benchmark property provisions.

5. DIVIDENDS			52 weeks ended 28 February 2015	52 weeks ended 1 March 2014
			£m	£m
Amounts recognised as distributions to equity holders
Final dividend of 2.3p per share (2014: 2.0p) for the prior year			(17.8)	(16.0)
Interim dividend of 1.0p per share (2014: 1.0p) for the current year			(7.5)	(7.9)
Ordinary dividends on equity shares			(25.3)	(23.9)
A final dividend in respect of the year ended 28 February 2015 of 2.8p per share (2014: 2.3p), amounting to a total final dividend of £21.2m, has been proposed by the Board of Directors, and is subject to approval by the shareholders at the Annual General Meeting. This would make a total dividend for the year of 3.8p per share, amounting to £28.7m. The final dividend of 2.8p per share will be paid on 23 July 2015 to shareholders who are on the register of members at close of business on 22 May 2015. The Home Retail Group Employee Share Trust (EST) has waived its entitlement to dividends to the amount of £1.5m (2014: £0.5m).

6. BASIC AND DILUTED EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing the profit attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares held in Home Retail Group's share trusts, net of vested but unexercised share awards. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares.
			52 weeks ended 28 February 2015		52 weeks ended  1 March  2014
Earnings			£m		£m
Profit after tax for the financial year			71.6		54.0
Adjusted for:
Amortisation of acquisition intangibles			1.8		1.8
Post-employment benefit scheme administration costs			1.9		1.9
Adjustments in respect of store impairment and property provisions			(0.1)		(2.1)
Exceptional items			35.5		41.4
Financing fair value remeasurements			1.0		(9.0)
Financing impact on post-employment benefit obligations			3.0		3.3
Discount unwind on non-benchmark items			6.7		6.9
Balance sheet review			(11.5)		-
Attributable taxation credit			(7.8)		(6.9)
Non-benchmark tax credit in respect of prior years			(3.0)		(8.2)
Tax rate change			-		(0.2)
Benchmark profit after tax for the financial year			99.1		82.9
Weighted average number of shares			millions		millions
Number of ordinary shares for the purpose of basic EPS			764.3		795.0
Dilutive effect of share incentive awards			36.0		26.4
Number of ordinary shares for the purpose of diluted EPS			800.3		821.4
EPS			pence		pence
Basic EPS			9.4		6.8
Diluted EPS			8.9		6.6
Basic benchmark EPS			13.0		10.4
Diluted benchmark EPS			12.4		10.1

7. PROVISIONS

	Property	Insurance	Restructuring	PPI customer redress	Other	Total
	£m	£m	£m	£m	£m	£m
At 2 March 2014	(151.8)	(38.1)	(9.5)	(33.7)	(3.0)	(236.1)
Charged to the income statement	(23.9)	(5.0)	(31.4)	(4.1)	-	(64.4)
Released to the income statement	39.8	2.0	-	-	-	41.8
Utilised during the year - cash	12.0	5.6	22.8	8.8	2.8	52.0
Utilised during the year - non cash	-	-	1.1	-	-	1.1
Transfer from accruals	(1.4)	-	(3.8)	-	(5.7)	(10.9)
Exchange differences	2.4	-	-	-	-	2.4
Discount unwind	(7.8)	-	-	-	-	(7.8)
At 28 February 2015	(130.7)	(35.5)	(20.8)	(29.0)	(5.9)	(221.9)
					2015	2014
Analysed as:					£m	£m
Current					(95.7)	(46.1)
Non-current					(126.2)	(190.0)
					(221.9)	(236.1)

Property provisions comprise obligations in respect of onerous leases together with other costs or income associated with store closures. In respect of onerous leases, provision is made for onerous lease contracts on stores that have either closed, or where projected future trading income is insufficient to cover the lower of exit cost or cost of continuing to trade the store. Where the cost of continuing to trade the store is lower, the provision is based on the present value of expected future cash flows relating to rents, rates and other property costs to the end of the lease terms net of expected trading or sublet income. The majority of this provision is expected to be utilised over the period to 2020.

Provision is made for the estimated costs of insurance claims incurred by the Group which have not been settled at the balance sheet date, including the costs of claims that have arisen but have not yet been reported to the Group. The estimated cost of claims includes operational costs to be incurred in administering future claims. The majority of this provision is expected to be utilised over the period to 2019.

The restructuring provision relates to a number of actions undertaken by the Group during the current and prior years. Actions currently being undertaken by the Group include: the ongoing project to transform Argos into a digital retail leader; the Homebase Productivity Plan which includes head office restructuring costs and costs associated with the closure of a distribution centre in FY16; and Group restructuring costs principally relating to the transitioning to Fujitsu of Information Systems infrastructure and services that support the Group's operations.

Financial Services offers Payment Protection Insurance (PPI) to its customers. In response to an industry wide review by the Financial Conduct Authority, a full investigation was undertaken in FY14 with the support of an independent expert. As a result, an exceptional charge of £25.0m was recognised. In FY15 an additional charge of £4.1m has been recognised. This charge principally reflects an anticipated increase in the operational costs expected to be incurred in respect of administering future customer redress payments. Redress payments have begun to be made, resulting in the partial utilisation of this provision in FY15. The customer redress provision comprises the estimated cost of making redress payments to customers in respect of past sales of PPI policies, including the related operational costs of administering these claims. The eventual cost is dependent upon response rates, uphold rates, redress costs, claim handling costs and those costs associated with claims that are subsequently referred to the Financial Ombudsman Service. The provision represents management's best estimate of future costs and will remain under review. Had management used different assumptions, a larger or smaller provision charge would have resulted. The most significant assumption is the expected response rate to the customer contact exercise which has been estimated at 35%. If the response rate is one percentage point higher/(lower) than estimated then the provision at 28 February 2015 would have increased/(decreased) by approximately £1m. This provision is expected to be utilised within one year.

8. NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Capital redemption reserve
The capital redemption reserve arose as a result of the share buy-back programme that was undertaken during the year ended 26 February 2011.

Merger reserve
The merger reserve arose on the demerger of the Group from GUS plc during 2006.

Other reserves

Other reserves principally consist of shares held in trust, the hedging reserve and the translation reserve.

The net debit arising on the movement in own shares of £44.8m (2014: debit of £35.2m) represents the purchase, and subsequent utilisation, of shares held for the purpose of satisfying obligations arising from the Group's share-based compensation schemes. Shares in Home Retail Group plc are held in the following trusts:

Home Retail Group Employee Share Trust (EST)
The EST provides for the issue of shares to Group employees under share option and share grant schemes (with the exception of the Share Incentive Plan). At 28 February 2015, the EST held 57,975,907 (2014: 34,025,109) shares with a market value of £117.3m (2014: £66.8m). The shares in the EST are held within equity of the Group at a cost of £100.8m (2014: £55.8m). During the 52 weeks ended 28 February 2015, 26.8m additional shares were purchased for a cost of £50.0m (2014: £37.4m). Dividends on these shares are waived.

Home Retail Group Share Incentive Scheme Trust
The Home Retail Group Share Incentive Scheme Trust provides for the issue of shares to Group employees under the Share Incentive Plan.  At 28 February 2015, the Trust held 557,938 (2014: 602,332) shares with a market value of £1.1m (2014: £1.2m). These shares are held within equity of the Group at a cost of £2.3m (2014: £2.5m). No additional shares were purchased during the year (2014: nil).

9. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
		52 weeks ended 28 February 2015	52 weeks ended 1 March 2014
Cash generated from operations		£m	£m
Profit before tax		93.8	71.2
Net financing expense/(income)		8.1	(1.2)
Operating profit		101.9	70.0
Profit on sale of property, plant and equipment and other intangible assets		(1.5)	(0.2)
Depreciation and amortisation		136.0	129.5
Impairment charge/(reversal)		15.8	(3.0)
Finance expense charged to Financial Services cost of sales		3.9	3.3
(Increase)/decrease in inventories		(60.6)	39.4
Increase in trade and other receivables		(23.0)	(25.2)
Increase in payables		120.2	4.2
Movement in trade working capital		36.6	18.4
Working capital impact of restructuring charges		-	1.3
Increase in Financial Services loan book		(55.4)	(49.4)
Movement in total working capital		(18.8)	(29.7)
(Decrease)/increase in provisions		(13.0)	12.4
Movement in post-employment benefit obligations		(20.8)	(35.6)
Share-based payment expense (net of dividend equivalent payments)		8.3	14.3
Cash generated from operations		211.8	161.0

 

10. RELATED PARTIES

The Group's related parties are its associates and key management personnel.

During the year, the Group received nil (2014: £3.5m) by way of loan repayment from its associates. At 28 February 2015, the amounts owed by its associates to the Group totalled £0.1m (2014: £0.1m), net of accumulated impairment losses totalling £3.9m (2014: £3.9m) following the decision to close HH Retail Limited, the Group's associate in China.

During the year, there were no material transactions or balances between the Group and its key management personnel or members of their close families.

11. POST BALANCE SHEET EVENTS

On 26 March 2015, the Group entered into a new unsecured multi-currency revolving credit facility of £250m with a syndicate of banks. This facility is for a minimum term of four years. On the same day, the Group cancelled its existing £165m facility, which was due to expire on 27 March 2016.

 Statement of directors' responsibilities

 

The directors are responsible for preparing the annual report and the Group financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors have prepared the Group financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.  The Group financial statements are required by law to give a true and fair view of the state of affairs and of the profit or loss of the Group for that year.

The preliminary results for the 52 weeks ended 28 February 2015 have been extracted from the annual report and the Group financial statements.

In preparing the Group financial statements, the directors are required to:

·  select suitable accounting policies and then apply them consistently;

·  make judgements and estimates that are reasonable and prudent;

·  state that the Group financial statements comply with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

·  prepare the Group financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. 

The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation.  They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

A list of current directors of Home Retail Group plc is maintained on the Home Retail Group website, www.homeretailgroup.com.

By order of the Board

John Walden                                                   Richard Ashton

Chief Executive                                               Finance Director

29 April 2015                                                  29 April 2015

 

END

 

 

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