Final Results - Part 2
Kingfisher PLC
29 March 2007
Consolidated income statement
For the financial year ended 3 February 2007
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items (note 3) items (note 3)
£ millions Notes 2007 2007 2007 2006 2006 2006
Continuing operations
Revenue 2 8,675.9 - 8,675.9 8,010.1 - 8,010.1
Cost of sales (5,623.7) - (5,623.7) (5,165.1) (7.9) (5,173.0)
Gross profit 3,052.2 - 3,052.2 2,845.0 (7.9) 2,837.1
Selling and distribution expenses (2,207.3) - (2,207.3) (2,005.0) (181.0) (2,186.0)
Administrative expenses (433.7) - (433.7) (390.7) (26.4) (417.1)
Other income 23.7 49.5 73.2 24.2 18.9 43.1
Other expenses - - - - (19.0) (19.0)
Share of post tax results of joint
ventures and associates 16.9 - 16.9 11.4 - 11.4
Operating profit 2 451.8 49.5 501.3 484.9 (215.4) 269.5
Analysed as:
Retail profit before central costs 503.7 49.5 553.2 533.1 (219.1) 314.0
Central costs (39.1) - (39.1) (37.8) 3.7 (34.1)
Amortisation of acquisition
intangibles (0.3) - (0.3) (0.1) - (0.1)
Share of interest and taxation of (12.5) - (12.5) (10.3) - (10.3)
joint ventures and associates
Total finance costs (75.6) - (75.6) (51.6) - (51.6)
Total finance income 24.8 - 24.8 13.9 - 13.9
Net finance costs 4 (50.8) - (50.8) (37.7) - (37.7)
Profit before taxation 401.0 49.5 450.5 447.2 (215.4) 231.8
Income tax expense 5 (119.4) 7.3 (112.1) (161.6) 68.8 (92.8)
Profit for the year 281.6 56.8 338.4 285.6 (146.6) 139.0
Attributable to:
Equity shareholders of the parent 336.8 139.5
Minority interests 1.6 (0.5)
338.4 139.0
Earnings per share (pence) 6
Basic 14.4p 6.0p
Diluted 14.4p 6.0p
Adjusted (basic) 11.9p 12.3p
The proposed final dividend for the financial year ended 3 February 2007,
subject to approval by shareholders at the Annual General Meeting, amounts to
£161.8m.
Consolidated statement of recognised income and expense
For the financial year ended 3 February 2007
£ millions Notes 2007 2006
Actuarial gains/(losses) on post employment benefits 9 95.3 (45.6)
Currency translation differences 9 (70.9) 28.4
Cash flow hedges
Fair value (losses)/gains 9 (9.1) 7.5
Losses transferred to inventories 9 3.1 0.5
Tax on items recognised directly in equity 9 (30.1) 20.1
Net (expense)/income recognised directly in equity (11.7) 10.9
Profit for the year 338.4 139.0
Total recognised income for the year 326.7 149.9
Attributable to:
Equity shareholders of the parent 325.1 149.4
Minority interests 1.6 0.5
326.7 149.9
Consolidated balance sheet
As at 3 February 2007
£ millions Notes 2007 2006
Non-current assets
Goodwill 2,551.5 2,558.8
Intangible assets 89.5 101.7
Property, plant and equipment 3,210.5 3,265.0
Investment property 29.4 15.3
Investments accounted for using equity method 184.9 185.0
Deferred tax assets 30.2 -
Other receivables 46.6 51.7
6,142.6 6,177.5
Current assets
Inventories 1,531.0 1,355.3
Trade and other receivables 505.4 570.6
Current tax assets 14.6 20.7
Available for sale financial assets 28.4 -
Cash and cash equivalents 11 394.5 234.1
2,473.9 2,180.7
Total assets 8,616.5 8,358.2
Current liabilities
Short-term borrowings (241.0) (346.8)
Trade and other payables (1,958.3) (1,750.8)
Provisions (56.3) (46.6)
Current tax liabilities (86.9) (77.0)
(2,342.5) (2,221.2)
Net current assets/(liabilities) 131.4 (40.5)
Total assets less current liabilities 6,274.0 6,137.0
Non-current liabilities
Long-term borrowings (1,431.7) (1,255.5)
Other payables (50.8) (5.7)
Provisions (53.2) (111.4)
Deferred tax liabilities (262.7) (204.4)
Post employment benefits 8 (54.6) (239.6)
(1,853.0) (1,816.6)
Total liabilities (4,195.5) (4,037.8)
Net assets 4,421.0 4,320.4
Equity
Share capital 370.7 369.8
Share premium 2,185.2 2,175.3
Treasury shares (81.3) (95.1)
Reserves 9 1,939.9 1,861.0
Minority interests 6.5 9.4
Total equity 4,421.0 4,320.4
Consolidated cash flow statement
For the financial year ended 3 February 2007
£ millions Notes 2007 2006
Net cash flows from operating activities 10 559.4 304.1
Cash flows from investing activities
Purchase of subsidiary and business undertakings, net of cash acquired (2.2) (161.0)
Purchase of associates and joint ventures - (2.2)
Payments to acquire property, plant and equipment and investment property (438.6) (435.3)
Payments to acquire intangible assets (28.3) (71.7)
Receipts from sale of property, plant and equipment and investment property 251.0 111.2
Receipts from sale of intangible assets 0.1 0.4
Receipts from sale of available for sale financial assets 0.4 3.6
Increase in available for sale financial assets (29.3) -
Dividends received from joint ventures and associates 5.1 4.9
Net cash used in investing activities (241.8) (550.1)
Cash flows from financing activities
Interest paid (70.3) (39.3)
Interest element of finance lease rental payments (5.8) (6.6)
Interest received 18.5 10.9
Proceeds from issue of share capital 10.8 9.7
Capital injections from minority interests 1.0 1.7
Receipts from the sale of own shares 7.1 2.6
Issue of Medium Term Notes and other fixed term debt 252.4 373.5
(Decrease)/increase in other loans (133.3) 150.5
Capital element of finance lease rental payments (11.8) (7.8)
Dividends paid to equity shareholders of the parent (248.4) (247.4)
Dividends paid to minority interests (2.1) -
Net cash (used in)/generated from financing activities (181.9) 247.8
Net increase in cash and cash equivalents 12 135.7 1.8
Cash and cash equivalents at beginning of year 113.7 105.9
Exchange differences (4.6) 6.0
Cash and cash equivalents at end of year 11 244.8 113.7
For the purposes of the cash flow statement, cash and cash equivalents are
included net of bank overdrafts repayable on demand. These bank overdrafts are
excluded from cash and cash equivalents disclosed on the balance sheet.
NOTES TO THE FINANCIAL INFORMATION
For the financial year ended 3 February 2007
1. General information
a) Basis of preparation
The financial information which comprises the consolidated income statement,
consolidated balance sheet, consolidated cash flow statement, consolidated
statement of recognised income and expense and related notes do not constitute
the Group's Annual Report and Accounts. The auditors have reported on the
Group's statutory accounts for each of the years 2007 and 2006 under section 235
of the Companies Act 1985, which do not contain statements under sections 237
(2) or (3) of the Companies Act 1985 and are unqualified. The statutory accounts
for 2006 have been delivered to the Registrar of Companies and the statutory
accounts for 2007 will be filed with the Registrar in due course. Copies of the
Annual Report and Accounts will be posted to shareholders during the week
beginning 23 April 2007.
The Group's financial reporting year ends on the nearest Saturday to 31 January
each year. The current financial year is the 53 weeks ended 3 February 2007.
The comparative financial year is the 52 weeks ended 28 January 2006. This only
impacts the UK operations with all of the other operations reporting on a
calendar basis as a result of local statutory requirements.
The consolidated financial statements have been prepared in accordance with EU
endorsed International Financial Reporting Standards (IFRS), IFRIC
interpretations and those parts of the Companies Act 1985 applicable to
companies reporting under IFRS. The consolidated financial statements have been
prepared under the historical cost convention, as modified by the revaluation of
certain financial instruments.
The principal accounting policies applied in the preparation of the consolidated
financial statements are consistent with those set out in the statutory accounts
for 2006.
b) Use of adjusted measures
Kingfisher believes that retail profit, adjusted profit before tax and adjusted
earnings per share provide additional useful information on underlying trends to
shareholders. These measures are used by Kingfisher for internal performance
analysis and incentive compensation arrangements for employees. The terms '
retail profit', 'exceptional item' and 'adjusted' are not defined terms under
IFRS and may therefore not be comparable with similarly titled profit measures
reported by other companies. It is not intended to be a substitute for, or
superior to, GAAP measurements of profit. The term 'adjusted' refers to the
relevant measure being reported excluding exceptional items, financing fair
value remeasurements and amortisation of acquisition intangibles. Retail profit
is defined as operating profit before central costs (the costs of the Corporate
Centre), exceptional items and the Group's share of interest and taxation of
joint ventures and associates.
The separate reporting of non-recurring exceptional items, which are presented
as exceptional within their relevant income statement category, helps provide an
indication of the Group's underlying business performance. The principal items
which will be included as exceptional items are:
• non trading items included in operating profit such as profits and losses
on the disposal of subsidiaries, associates and investments which do not
form part of the Group's trading activities;
• gains and losses on the disposal of properties; and
• the costs of significant restructuring and incremental acquisition
integration costs.
2 Segmental analysis
The Group's primary reporting segments are geographic, with the Group operating
in four main geographical areas, being the UK, France, Rest of Europe and Asia.
The Group only has one business segment being retail, therefore no secondary
segmental disclosure is given.
The 'Rest of Europe' segment consists of B&Q Ireland, Castorama Poland,
Castorama Italy, Castorama Russia, Brico Depot Spain, Koctas and Hornbach.
Poland has been shown separately as it meets the reportable segment criteria as
prescribed by IAS 14. The 'Asia' segment consists of B&Q China, B&Q Korea and B&
Q Taiwan.
The segment results for the year ended 3 February 2007 are as follows:
£ millions United France Poland Rest of Asia Total
Kingdom Europe
External revenue 4,261.5 2,955.2 507.9 494.6 456.7 8,675.9
Segment result before joint ventures and associates 233.1 204.5 57.9 28.8 (0.8) 523.5
Share of post tax results of joint ventures and 16.9
associates - 0.5 - 12.5 3.9
Total segment result 233.1 205.0 57.9 41.3 3.1 540.4
Central costs (39.1)
Operating profit 501.3
Net finance costs (50.8)
Profit before taxation 450.5
Income tax expense (112.1)
Profit for the year 338.4
The segment results for the year ended 28 January 2006 are as follows:
£ millions United France Poland Rest of Asia Total
Kingdom Europe
External revenue 4,172.0 2,724.9 417.0 378.2 318.0 8,010.1
Segment result before joint ventures and associates 10.9 228.9 52.5 20.3 (20.4) 292.2
Share of post tax results of joint ventures and
associates - 0.3 - 5.5 5.6 11.4
Total segment result 10.9 229.2 52.5 25.8 (14.8) 303.6
Central costs (34.1)
Operating profit 269.5
Net finance costs (37.7)
Profit before taxation 231.8
Income tax expense (92.8)
Profit for the year 139.0
Unallocated central costs principally comprise the Head Office operations of
Kingfisher plc.
3 Exceptional items
The following exceptional items, as defined in note 1b, have been (charged)/
credited in arriving at profit before taxation:
£ millions 2007 2006
Included within cost of sales, selling and distribution expenses and administrative expenses:
B&Q UK - reorganisation costs - (205.3)
OBI China - integration costs - (10.0)
(215.3)
-
Included within other income:
Profit on disposal of properties 49.1 15.3
Profit on disposal of available for sale financial 0.4 3.6
assets
49.5 18.9
Included within other expenses:
B&Q UK - financial services termination fee (19.0)
-
Total exceptional items 49.5 (215.4)
Current year
Total profits recognised on the disposal of properties totalled £49.1m in the
year. The Group recognised £42.7m profit on disposal of properties in connection
with the sale and leaseback of seven UK warehouse stores to The British Land
Company.
The Group also received further consideration of £0.4m in the current year
relating to the disposal of its investment in improveline.com in the prior year.
Prior year
During the prior year, the Group incurred a £205.3 million restructuring charge
in B&Q UK relating to the planned closure of 20 stores, the downsizing of a
further 17 stores and the costs of streamlining B&Q's corporate offices. A
further charge of £19.0m was incurred in the prior year following B&Q's decision
to terminate a contract with its previous supplier of consumer credit services,
which gave rise to the repayment of part of the original proceeds received on
disposal of Time Retail Finance in 2003.
£10.0m of costs were also incurred in the prior year in relation to the
integration of the OBI China business into B&Q China. These costs include the
incremental costs of the dedicated integration team, re-branding costs and the
write-off of property, plant and equipment which were not deemed suitable for
the B&Q China business model.
The Group disposed of a number of properties during the prior year giving rise
to a profit of £15.3m. The Group also disposed of its investment in
improveline.com, for cash consideration of £3.6m and realising a profit of £3.6m
as the investment had been fully provided against in a prior year.
Refer to note 5 for the taxation impact on exceptional items.
4 Net finance costs
£ millions 2007 2007 2006 2006
Bank and other interest payable (74.1) (46.7)
Less amounts capitalised in the cost of qualifying assets 1.2 3.3
(72.9) (43.4)
Finance lease charges (5.8) (6.0)
Net interest charge on defined benefit schemes (note 8) - (3.8)
Financing fair value remeasurements 4.7 1.6
Unwinding of discount on provisions (1.6) -
Total finance cost (75.6) (51.6)
Bank and other interest receivable 18.5 13.9
Net interest return on defined benefit schemes (note 8) 6.3 -
Total finance income 24.8 13.9
Net finance costs (50.8) (37.7)
Borrowing costs included in the cost of qualifying assets during the year arose
on the general borrowing pool and are calculated by applying a capitalisation
rate of 5.5% (2006: 5.3%) to expenditure on such assets.
Interest payable above includes amortisation of issue costs of debt of £0.9m
(2006: £0.5m).
5 Income tax expense
£ millions 2007 2006
UK corporation tax
Current tax on profits for the year 35.7 7.2
Adjustment in respect of prior years (0.3) (15.8)
35.4 (8.6)
Double taxation relief (5.5) (0.4)
29.9 (9.0)
Foreign tax
Current tax on profits for the year 80.7 86.9
Adjustments in respect of prior years (2.3) 0.2
78.4 87.1
Deferred tax
Current year 12.7 20.2
Adjustment in respect of prior years (8.9) (4.3)
Attributable to changes in tax rates - (1.2)
3.8 14.7
112.1 92.8
In addition to the amounts charged to the income statement, tax of £30.1m was
charged directly to equity (2006: £20.1m credited) (Refer note 9).
A tax credit of £7.3m has been recognised in the income statement relating to
exceptional items, of which £4.6m is credited against the current year tax
charge in relation to the £49.5m net exceptional income, with the remaining
£2.7m in respect of prior periods, relating to tax previously provided on
exceptional items.
6 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue
during the year, excluding those held in the Executive Share Option Plan Trust
(ESOP) which for the purpose of this calculation are treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. These represent share options granted to employees where the exercise
price is less than the average market price of the Company's shares during the
year.
Adjusted earnings per share figures are also presented. These exclude the
effects of exceptional items, financing fair value remeasurements and
amortisation of acquisition intangibles, to allow comparison of underlying
trading performance on a consistent basis.
2007 2006
Earnings Weighted Per share Earnings Weighted Per share
average amount average amount
number of number of
shares shares
£millions millions pence £millions millions pence
Basic earnings per share
Earnings attributable to ordinary shareholders 336.8 2,333.0 14.4 139.5 2,324.7 6.0
Effect of dilutive securities
Options 10.8 - 10.2 -
Diluted earnings per share 14.4
336.8 2,343.8 139.5 2,334.9 6.0
Basic earnings per share 14.4 139.5 2,324.7 6.0
336.8 2,333.0
Effect of non-recurring costs
Exceptional items (49.5) (2.1) 215.4 9.3
Tax impact arising on exceptional items (7.3) (0.3) (68.8) (2.9)
Financing fair value remeasurements (4.7) (0.2) (1.6) (0.1)
Tax impact arising on financing 1.4 0.1 0.5 -
remeasurements
Amortisation of acquisition intangibles 0.3 - 0.1 -
Basic - adjusted earnings per share
277.0 2,333.0 11.9 285.1 2,324.7 12.3
Diluted earnings per share
336.8 2,343.8 14.4 139.5 2,334.9 6.0
Effect of non-recurring costs
Exceptional items (49.5) (2.2) 215.4 9.2
Tax impact arising on exceptional items (7.3) (0.3) (68.8) (2.9)
Financing fair value remeasurements (4.7) (0.2) (1.6) (0.1)
Tax impact arising on financing 1.4 0.1 0.5 -
remeasurements
Amortisation of acquisition intangibles 0.3 - 0.1 -
Diluted - adjusted earnings per share
277.0 2,343.8 11.8 285.1 2,334.9 12.2
7 Dividends
£ millions 2007 2006
Amounts recognised as distributions to equity shareholders in the year:
Final dividend for the year ended 28 January 2006 of 6.8p per share (29 January 2005: 6.8p 158.5 159.7
per share)
Interim dividend for the year ended 3 February 2007 of 3.85p per share (28 January 2006: 89.9 89.5
3.85p per share)
Dividend paid to Employee Share Ownership Plan Trust (ESOP) shares - (1.8)
248.4 247.4
Proposed final dividend for the year ended 3 February 2007 of 6.8p per share 161.8
The proposed final dividend for the year ended 3 February 2007 is subject to
approval by shareholders at the Annual General Meeting and has not been included
as a liability in these financial statements.
8 Post employment benefits
The Group operates a variety of post employment benefit arrangements covering
both funded and unfunded defined benefit schemes and funded defined contribution
schemes. The most significant are the funded, final salary defined benefit and
defined contribution schemes for the Group's UK employees; however various
defined benefit and defined contribution schemes are operated in France, Poland,
Italy, China and South Korea. In France and Poland, they are retirement
indemnity in nature; and in South Korea and Italy, termination indemnity in
nature.
The most recent actuarial valuations of plan assets and the present value of the
defined benefit obligations were carried out at 3 February 2007. The principal
actuarial assumptions and expected rates of return used were as follows:
2007 2006
Annual % rate UK Other UK Other
Discount rate 5.3 4.6 to 5.5 4.7 4.0 to 6.0
Salary escalation 4.5 3.5 to 6.7 4.3 2.0 to 6.7
Rate of pension increases 2.9 n/a 2.7 n/a
Price inflation 2.9 2.0 to 2.5 2.7 2.0 to 2.5
2007 2006
% rate of return UK Other UK Other
Equities 7.8 - 7.6 -
Bonds 4.9 4.5 4.2 -
Property 6.3 - 5.9 -
Other 3.9 4.0 3.7 4.0
Overall expected rate of return 6.5 4.0 6.1 4.0
The overall expected rate of return is effectively a weighted average of the
individual asset categories and their inherent expected rates of return.
The main financial assumption is the real discount rate, i.e. the excess of the
discount rate over the rate of inflation. If this assumption increased/decreased
by 0.1%, the UK defined benefit obligation would decrease/increase by
approximately £30.0m, and the annual UK current service cost would decrease/
increase by approximately £1.0m.
The assumptions for pensioner longevity are based on an analysis of pensioner
death trends under the scheme over the period from 1998 to 2004, together with
allowances for future improvements to death rates for all members. The specific
tables used are the same as those used in the 2004 funding valuation, namely
PMA92C2010 for male pensioners, PFA92C2010 (+2 year age rating) for female
pensioners. Further allowances for improving longevity are included for members
yet to retire.
At 3 February 2007 the Group has further strengthened the assumption for future
improvements to mortality rates implying an increase in the assumed life
expectancies. This has the impact of increasing the defined benefit obligation
by 4% compared with that using the previous mortality rate projections. These
revised assumptions are equivalent to assuming the average age at death for a
pensioner currently aged 60 is 85.1 for a male and 86.3 for a female. They are
also equivalent to assuming an average age at death for a member aged 60 in 15
years time is 86.2 for a male and 87.5 for a female. These assumptions will be
reviewed following the next funding valuation due no later than 31 March 2007.
The amounts recognised in the income statement are as follows:
£ millions 2007 2006
UK Other Total UK Other Total
Amounts charged to operating profit:
Current service cost 34.9 4.7 39.6 33.2 3.7 36.9
Past service cost - - - - - -
Total operating charge 34.9 4.7 39.6 33.2 3.7 36.9
Amounts (credited)/charged to net finance costs:
Expected return on pension scheme assets (73.1) (0.4) (73.5) (58.9) (0.4) (59.3)
Interest on pension scheme liabilities 65.6 1.6 67.2 61.7 1.4 63.1
Net interest (return)/charge (note 4) (7.5) 1.2 (6.3) 2.8 1.0 3.8
Total charged to income statement 27.4 5.9 33.3 36.0 4.7 40.7
Of the charge to operating profit for the year, £27.3m (2006: £25.4m) and £12.3m
(2006: £11.5m) were included, respectively, in selling and distribution expenses
and administrative expenses, and a £6.3m net credit (2006: £3.8m net charge) was
included in net finance costs. Actuarial gains and losses have been reported in
the statement of recognised income and expense.
The amounts included in the balance sheet, within non-current liabilities,
arising from the Group's obligations in respect of its defined benefit
retirement schemes, are determined as follows:
2007 2006
£ millions UK Other Total UK Other Total
Present value of defined benefit obligations (1,394.7) (36.8) (1,431.5) (1,420.4) (39.1) (1,459.5)
Fair value of scheme assets 1,366.7 10.2 1,376.9 1,209.8 10.1 1,219.9
Net liability recognised in the balance sheet (28.0) (26.6) (54.6) (210.6) (29.0) (239.6)
Movements in the deficit during the year:
2007 2006
£ millions UK Other Total UK Other Total
Deficit in scheme at beginning of year (210.6) (29.0) (239.6) (302.1) (23.6) (325.7)
Total service cost charged in the income statement (as above) (34.9) (4.7) (39.6) (33.2) (3.7) (36.9)
Interest charge (65.6) (1.6) (67.2) (61.7) (1.4) (63.1)
Expected return on pension scheme assets 73.1 0.4 73.5 58.9 0.4 59.3
Actuarial gains and losses 91.7 3.6 95.3 (43.2) (2.4) (45.6)
Contributions paid 118.3 3.8 122.1 170.7 1.6 172.3
Exchange differences - 0.9 0.9 - 0.1 0.1
Deficit in scheme at end of year (before taxation) (28.0) (26.6) (54.6) (210.6) (29.0) (239.6)
The analysis of the scheme assets at the balance sheet date is as follows:
2007 2006
£ millions UK Other Total UK Other Total
Equities 705.0 - 705.0 638.5 - 638.5
Bonds 512.3 0.2 512.5 449.4 - 449.4
Property 121.3 - 121.3 96.7 - 96.7
Other 28.1 10.0 38.1 25.2 10.1 35.3
Total market value of assets 1,366.7 10.2 1,376.9 1,209.8 10.1 1,219.9
The pension plans do not hold any other assets than those disclosed above.
The estimated amounts of contributions expected to be paid to the UK, France and
other pension schemes during the next financial year is £105.5m.
9 Reserves
£ millions Hedging Translation Other Retained Total
reserve reserve reserves earnings
At 30 January 2005 (4.4) 56.8 159.0 1,736.1 1,947.5
Actuarial losses on post employment benefits - - - (45.6) (45.6)
Treasury shares disposed - - - (2.6) (2.6)
Share-based compensation charge - - - 14.0 14.0
Share-based compensation - shares awarded - - - (0.9) (0.9)
Currency translation differences - 28.4 - - 28.4
Cash flow hedges - fair value gains 7.5 - - - 7.5
Cash flow hedges - losses transferred to 0.5 - - - 0.5
inventories
Tax on items recognised directly in equity (2.4) 6.9 - 15.6 20.1
Net gains recognised directly in equity 5.6 35.3 - (19.5) 21.4
Profit for the year - - - 139.5 139.5
Total recognised gains for the year 5.6 35.3 - 120.0 160.9
Dividends - - - (247.4) (247.4)
At 28 January 2006 1.2 92.1 159.0 1,608.7 1,861.0
Actuarial gains on post employment benefits - - - 95.3 95.3
Treasury shares disposed - - - (6.7) (6.7)
Share-based compensation charge - - - 8.9 8.9
Currency translation differences - (70.9) - - (70.9)
Cash flow hedges - fair value losses (9.1) - - - (9.1)
Cash flow hedges - losses transferred to inventories 3.1 - - - 3.1
Tax on items recognised directly in equity 1.8 - - (31.9) (30.1)
Net losses recognised directly in equity (4.2) (70.9) - 65.6 (9.5)
Profit for the year - - - 336.8 336.8
Total recognised gains for the year (4.2) (70.9) - 402.4 327.3
Dividends - - - (248.4) (248.4)
At 3 February 2007 (3.0) 21.2 159.0 1,762.7 1,939.9
10 Net cash flows from operating activities
£ millions 2007 2006
Operating profit 501.3 269.5
Adjustments for:
Depreciation of property, plant and equipment and investment property 173.8 149.8
Amortisation of intangible assets 33.2 32.0
Impairment loss on property, plant and equipment and investment property 1.3 40.1
Impairment loss on intangible assets - 7.5
Share based compensation charge 9.0 14.1
Share of post tax results of joint ventures and associates (16.9) (11.4)
(Profit)/loss on disposal of property, plant and equipment and investment property (43.9) 22.5
Loss on disposal of intangible assets 5.7 2.0
Profit on disposal of available for sale financial assets (0.4) (3.6)
Operating cash flows before movements in working capital 663.1 522.5
Movements in working capital (excluding the effects of acquisitions and disposals
of subsidiaries and exchange differences on consolidation):
Increase in inventories (215.0) (33.3)
Decrease/(increase) in trade and other receivables 44.0 (97.3)
Increase in trade and other payables 295.1 27.3
Decrease in post employment benefits (82.5) (135.2)
(Decrease)/increase in other provisions (47.0) 140.2
(5.4) (98.3)
Cash generated by operations 657.7 424.2
Income taxes paid (98.3) (120.1)
Net cash flows from operating activities 559.4 304.1
11 Cash and cash equivalents
£ millions 2007 2006
Cash at bank and in hand 249.4 211.3
Short-term deposits 145.1 22.8
394.5 234.1
The short-term deposits comprise money market deposits, attracting interest
rates based on LIBOR or equivalent market rates, fixed for periods of up to
three months. The carrying amount of these assets approximate to their fair
values.
For the purposes of the consolidated cash flow statement, cash and cash
equivalents comprise the following:
£ millions 2007 2006
Cash at bank and in hand 249.4 211.3
Short-term deposits 145.1 22.8
Bank overdrafts (149.7) (120.4)
244.8 113.7
12 Net debt
Net debt incorporates the Group's borrowings, interest rate and cross currency
swaps that hedge those borrowings (excluding accrued interest), bank overdrafts
and obligations under finance leases, less cash and cash equivalents and current
available for sale financial assets, as detailed below.
£ millions 207 2006
Cash and cash equivalents 394.5 234.1
Current available for sale financial assets 28.4 -
Bank overdrafts (149.7) (120.4)
Bank loans (146.8) (286.2)
Medium Term Notes and other fixed term debt (1,306.6) (1,123.8)
Interest rate and cross currency swaps (excluding accrued interest) (44.0) 13.0
Obligations under finance leases (69.6) (71.9)
Net debt at end of year (1,293.8) (1,355.2)
A reconciliation of the movement in net debt from the start to the end of the
year is detailed below.
£ millions 2007 2006
Net debt at start of year (1,355.2) (841.1)
Net increase in cash and cash equivalents 135.7 1.8
Increase in available for sale financial assets 29.3 -
Amortisation of issue costs of debt (0.9) (0.5)
Increase in debt and lease financing (107.3) (516.2)
Exchange differences and fair value adjustments on financial instruments 4.6 0.8
Net debt at end of year (1,293.8) (1,355.2)
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 31st May 2024
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