Interim Results - Part 2
Kingfisher PLC
13 September 2000
Part 2
KINGFISHER PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
For the half year ended 29 July 2000
As As
restated restated
Half Year
year ended
Half year ended 31 29
ended 29 July January
£ millions Notes July 2000 1999 2000
Turnover - continuing
Turnover including share of 5,496.6 4,912.1 10,933.1
joint ventures
Less: share of joint ventures' (37.7) (23.0) (48.1)
turnover
1 5,458.9 4,889.1 10,885.0
Group operating profit - 236.0 261.1 746.1
continuing
Share of operating profit in
Joint ventures - continuing 2.1 1.5 3.2
Associates - continuing (13.3) 0.6 (5.2)
Total operating profit
including share of joint 224.8 263.2 744.1
ventures and associates
Analysed as
DIY 191.4 173.3 365.8
Electrical 48.1 51.3 194.3
General Merchandise 6.3 28.8 183.9
Property 38.5 37.7 76.0
E-Commerce & other new (28.5) (2.9) (24.0)
channels
Exceptional items - other 2 - (3.7) (3.5)
operating expense
Other operating costs (22.9) (18.2) (37.9)
Acquisition goodwill (8.1) (3.1) (10.5)
amortisation
Total operating profit
including share of joint 224.8 263.2 744.1
ventures and associates
Exceptional items - non-
Operating
(Loss)/profit on disposal of (0.9) (0.6) 6.2
properties
Gain on deemed disposal of
Liberty Surf Group S.A. 2 120.8 - -
Profit on ordinary activities
before interest 344.7 262.6 750.3
Interest (28.9) (14.3) (37.5)
Profit on ordinary activities 315.8 248.3 712.8
before tax
Taxation on ordinary (58.2) (76.2) (204.4)
activities
Profit on ordinary activities 257.6 172.1 508.4
after tax
Minority interests (44.8) (44.8) (99.4)
Profit attributable to the
members of Kingfisher plc 212.8 127.3 409.0
Dividends on equity shares 3 (58.4) (54.6) (198.2)
Retained profit for the period 154.4 72.7 210.8
Earnings per share (pence) 4
- basic 15.6 9.4 30.1
- diluted 15.4 8.9 29.3
- basic adjusted 9.2 10.1 32.0
- diluted adjusted 9.0 9.6 31.2
KINGFISHER PLC
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 29 July 2000
29 As restated As restated
July 31 July 29 January
£ millions 2000 1999 2000
Fixed assets
Intangible assets 468.0 389.8 400.9
Tangible assets 3,598.1 3,143.1 3,432.5
Investments 272.0 63.5 95.4
4,338.1 3,596.4 3,928.8
Current assets
Development work in 123.9 54.3 96.7
progress
Stocks 1,946.5 1,614.6 1,669.4
Debtors 876.7 724.4 809.0
Securitised consumer 289.9 303.2 303.8
receivables
Less: non-recourse (222.4) 67.5 (238.3) 64.9 (234.5) 69.3
secured notes
Investments 185.1 347.6 352.3
Cash at bank and in hand 203.8 336.2 156.6
3,403.5 3,142.0 3,153.3
Creditors
Amounts falling due (3,646.4) (3,082.2) (3,377.1)
within one year
Net current (242.9) 59.8 (223.8)
(liabilities)/assets
Total assets less 4,095.2 3,656.2 3,705.0
current liabilities
Creditors
Amounts falling due
after more than one year (689.6) (921.1) (626.0)
Provisions for
liabilities and charges (19.4) (20.7) (18.6)
3,386.2 2,714.4 3,060.4
Called up share capital 173.7 170.5 171.0
Reserves 2,712.4 2,137.7 2,438.5
Equity shareholders' 2,886.1 2,308.2 2,609.5
funds
Equity minority 500.1 406.2 450.9
interests
3,386.2 2,714.4 3,060.4
Approved by the Board
Sir Geoffrey Mulcahy Director
Philip Rowley Director
KINGFISHER PLC
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(UNAUDITED)
For the half year ended 29 July 2000
As
As restated
Half restated Year
year Half year ended
ended ended 29
29 July 31 July January
£ millions Notes 2000 1999 2000
Net cash inflow from operating 5 312.6 348.2 863.8
activities
Returns on investment and
servicing of finance
Net interest paid (42.1) (6.8) (40.7)
Dividends paid by subsidiaries to (26.3) (20.6) (20.2)
minorities
Net cash outflow from returns on
investment and servicing of (68.4) (27.4) (60.9)
finance
Taxation
Tax paid (86.6) (34.3) (200.8)
Capital expenditure and financial
investment
Net purchase of tangible fixed (237.4) (309.5) (589.9)
assets
Net additions to investments (76.9) (0.9) (10.8)
Net cash outflow from capital
expenditure and financial (314.3) (310.4) (600.7)
investment
Acquisitions and disposals
Purchase of subsidiary and
business undertakings (52.4) (146.3) (182.7)
Payments for additions to joint
ventures/associated undertakings (9.6) (4.6) (39.4)
Issue of shares by group companies
to minority shareholders - - 58.7
Net cash outflow from acquisitions (62.0) (150.9) (163.4)
and disposals
Equity dividends paid to (89.4) (99.0) (146.4)
shareholders
Net cash outflow before use of
liquid resources and financing (308.1) (273.8) (308.4)
Management of liquid resources
Net movement in short-term (5.5) (56.0) 120.2
deposits
Net sale/(purchase) of short-term 169.3 ( 37.0) (39.9)
investments
Net cash inflow/(outflow) from
management of liquid resources 163.8 (93.0) 80.3
Financing
Issue of ordinary share capital 62.6 15.8 10.8
Capital element of finance lease (3.3) (3.7) (8.8)
rental payments
Net increase of loans 80.3 329.7 379.2
Net cash inflow from financing 139.6 341.8 381.2
(Decrease)/increase in cash 6 (4.7) (25.0) 153.1
KINGFISHER PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Group turnover from continuing operations
As As
restated restated
Half year Half year Year ended
ended 29 ended 31 29 January
£ millions July 2000 July 1999 2000
DIY 2,591.3 2,310.3 4,528.3
B&Q 1,420.4 1,169.3 2,312.3
Castorama 868.7 899.6 1,717.1
Other 302.2 241.4 498.9
Electrical 1,501.1 1,311.7 3,188.0
Darty 536.7 500.1 1,162.5
Comet 454.5 380.1 982.0
ProMarkt 265.0 213.7 541.0
BUT 146.8 137.5 329.6
Other 98.1 80.3 172.9
General Merchandise 1,318.0 1,222.1 3,065.5
Woolworths 735.2 699.8 1,844.4
Superdrug 404.1 394.7 842.3
Other 156.3 125.3 362.8
New formats 22.4 2.3 16.0
E-Commerce 3.3 0.2 3.1
Retail Sales 5,413.7 4,844.3 10,784.9
Property 13.6 13.7 32.5
Financial Services 31.6 31.1 67.6
Kingfisher 5,458.9 4,889.1 10,885.0
2. The non-operating exceptional item of £120.8m represents the gain arising
on the deemed disposal in respect of shares issued by Liberty Surf Group S.A.,
as a result of its listing on the Premier Market of the Paris Bourse on 16
March 2000. This deemed disposal does not give rise to a tax charge. For the
half year ended 31 July 1999, the exceptional other operating expense
represents the costs incurred during the period on the attempted merger with
ASDA Group plc.
3. An interim dividend of 4.25p amounting to £58.4m (1999: 4.00p, £54.6m)
will be paid on 17 November 2000 to shareholders on the Register at 29
September 2000. A scrip dividend will be offered and forms of election will
be sent to shareholders on 10 October 2000.
4. The calculation of basic earnings per share is based on the profit on
ordinary activities, after taxation and minority interests, of £212.8m (1999:
£127.3m) and the weighted average number of shares in issue during the period
of 1,363.1m (1999: 1,354.4m). The diluted earnings per share is based on the
diluted profit on ordinary activities, after taxation and minority interests,
of £212.1m (1999: £123.9m) and the diluted weighted average number of shares
in issue during the period of 1,381.7m (1999: 1,393.8m).
The difference between the basic and diluted earnings per share and the basic
adjusted and diluted adjusted earnings per share is reconciled as follows:
As
As restated
restated Year
Half year Half year ended
ended 29 ended 31 29
July 2000 July January
Per share 1999 2000
amount Per share Per share
pence amount amount
pence pence
Basic earnings per share 15.6 9.4 30.1
Earnings per share relating to (8.8) 0.3 (0.2)
exceptional items
Earnings per share relating to
acquisition goodwill amortisation 0.6 0.2 0.7
Earnings per share relating to
e-Commerce and other new channels 1.8 0.2 1.4
Basic adjusted earnings per share 9.2 10.1 32.0
Diluted earnings per share 15.4 8.9 29.3
Earnings per share relating to
exceptional items (8.8) 0.3 (0.2)
Earnings per share relating to
acquisition goodwill amortisation 0.6 0.2 0.7
Earnings per share relating to
e-Commerce and other new channels 1.8 0.2 1.4
Diluted adjusted earnings per 9.0 9.6 31.2
share
5. Reconciliation of cashflow from operating activities
As As
restated restated
Half year Half year Year ended
ended 29 ended 31 29 January
July 2000 July 2000
£ millions 1999
Operating profit 236.0 261.1 746.1
Depreciation and amortisation 107.0 87.3 191.3
343.0 348.4 937.4
(Increase)/decrease in
development work in progress (25.6) 15.5 (25.3)
Increase in stocks (255.8) (155.6) (272.3)
(Increase)/decrease in debtors (67.7) 6.6 (106.2)
Increase in creditors 315.6 130.2 326.0
Loss on disposal of fixed 3.1 3.1 4.2
assets
Net cash inflow from operating 312.6 348.2 863.8
activities
6. Reconciliation of net borrowings
Year
Half year Half year ended 29
ended 29 ended 31 January
£ millions July 2000 July 1999 2000
At start of period (1,020.8) (693.4) (693.4)
(Decrease)/increase in cash (4.7) (25.0) 153.1
Debt in subsidiaries - - (44.5)
acquired
Net movement in short-term 5.5 56.0 (120.2)
deposits
Net (sale)/purchase of (169.3) 37.0 39.9
investments
Change in market value of 1.1 (0.4) 0.7
investments
Net increase of loans (80.3) (329.7) (379.2)
Effect of foreign exchange (4.4) 12.7 22.8
rate changes
At end of period (1,272.9) (942.8) (1,020.8)
7. Accounting policies have been consistently applied on the basis set out in
the Group's Financial Statements for the year ended 29 January 2000, except in
respect of changes discussed below, caused by the introduction of Financial
Reporting Standard 15 'Tangible Fixed Assets' ('FRS 15').
The half year results have been prepared in accordance with the requirements
of FRS 15 expected to be applicable for the full year and a charge for
depreciation on buildings has been included for the first time. In addition,
FRS 15 and UITF Abstract 24 'Accounting for start-up costs' required a review
of the Group's policies in respect of pre-opening costs of new stores. As a
result certain costs, previously depreciated over two years, are now required
to be expensed. This change has been accounted for as a prior period
adjustment and previously reported figures have been restated accordingly.
If the previous policy had been adopted in the current half year, the impact
would have been to increase profit before and after tax by £11.8m. The impact
of adopting the new policy on the half year to 31 July 1999 has been to reduce
the previously reported profit before and after tax by £1.4m (year to 29
January 2000 by £13.4m). The cumulative effect of these changes on reserves
is £25.1m.
As required by FRS 15, the provision for depreciation on buildings has been
dealt with prospectively and there is no restatement of prior period figures.
Under the new accounting policy for the depreciation of freehold and long
leasehold buildings, depreciation is calculated by the straight line method
and the annual rates applicable to high street and out of town buildings are
2% and 5% respectively. The additional depreciation provided in the half year
to 29 July 2000 was £5.8m.
8. Acquisition of the remaining 40% of ProMarkt Holding GmbH & Co. KG
On 19 June 2000, Eijsvogel Beteiligungs GmbH, a 100% subsidiary of the Group,
acquired the remaining 40% of ProMarkt Holding GmbH & Co. KG which it did not
already own. Consideration was satisfied by the disposal of the Group's 55%
stake in Tangens GmbH and the payment of £11.4m. Provisional goodwill arising
on the transaction of £34.7m has been capitalised and is being amortised in
accordance with Group policy.
Acquisition of Hugo Van Praag
On 31 January 2000, New Vanden Borre S.A., a 100% subsidiary of the Group,
acquired the assets and business of Hugo Van Praag, a Belgian electrical
retailer, for £23.7m including expenses. Provisional goodwill arising on the
acquisition of £18.9m has been capitalised and is being amortised in
accordance with Group policy.
Acquisition of Koctas Yapi Marketleri Ticaret A.S.
On 1 June 2000, B&Q Holdings BV, a 56.4% subsidiary of the Group, subscribed
for 50% of the share capital of Koctas Yapi Marketleri Ticaret A.S., the new
operator of Koctas, a Turkish DIY retail chain, for a consideration of £8.2m
including expenses. Provisional goodwill arising on the acquisition of £4.3m
has been capitalised and is being amortised in accordance with Group policy.
Other acquisitions
The most significant other acquisitions made during the period were the
purchases of 13 BUT stores previously operated by franchisees. Provisional
goodwill arising on the acquisitions of £11.6m has been capitalised and is
being amortised in accordance with Group policy.
9. Other investments
On 8 February 2000, B&Q Holdings BV, a 56.4% subsidiary of the Group, invested
£4.8m in Virtueller Bau-Markt AG, the operator of heimwerker.de, the German e-
Commerce retailer of DIY, gardening and leisure products. On 4 May 2000,
Eijsvogel BV, a 100% subsidiary of the Group, invested £3.0m in Recommend
Limited, the operator of Improveline.com, an internet site which matches
homeowners with building contractors. On 15 May 2000, Eijsvogel BV invested
£4.5m in Think Natural Limited, a retailer of natural health products. These
acquisitions are all included as fixed asset investments.
10. The results for the year to 29 January 2000 are based on full audited
accounts which were filed with the Registrar of Companies and on which the
auditors made a report under section 235 of the Companies Act 1985 which does
not contain a statement under sections 237(2) or (3) of the Companies Act 1985
and is unqualified.
11. Copies of the results will be sent to shareholders during the week
commencing 25 September 2000 and additional copies will be available from the
Company Secretary, Kingfisher plc, North West House, 119 Marylebone Road,
London NW1 5PX.
Independent review report to Kingfisher plc
We have been instructed by the Company to review the financial information set
out on pages 17 to 19 and the notes 1 to 11 thereto, and we have read the
other information contained in the interim report for any apparent
misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of Group management and applying analytical procedures to
the financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on
the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 29 July 2000.
PricewaterhouseCoopers
Chartered Accountants
London
For further information
Media Enquiries
John Eyre, Director of Corporate Affairs + 44 (0) 20 7725 5714
Gail Lavielle, Director of Corporate Communications + 33 (1) 43 18 52 68
Broker and Institutional Enquiries
Andrew Mills, Acting Director of Investor Relations + 44 (0) 20 7725 5776
Graham Fairbank, Head of Corporate Communications + 33 (1) 43 18 52 26
Kingfisher plc + 44 (0) 20 7724 7749
Kingfisher Website www.kingfisher.co.uk
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