Separation Update and Sale
Kingfisher PLC
3 July 2001
EMBARGOED UNTIL 0830 HOURS
3rd July 2001
KINGFISHER TO SELL SUPERDRUG WITH WOOLWORTHS DEMERGER ON TARGET FOR SECOND
QUARTER
Kingfisher plc today announces that the separation of its general merchandise
businesses will be effected through:
* A sale of Superdrug to Kruidvat Beheer BV;
* The demerger as a separate business, under the name
Woolworth Group plc, of the balance of the general
merchandise businesses of Kingfisher (Woolworths,
Entertainment UK, MVC, Streets Online and VCI); and
* A sale of the general merchandise high street property
portfolio
SUPERDRUG SALE TO REALISE £310 MILLION
Agreement has been reached in principle for the sale of Superdrug (a leading UK
Health and Beauty retailer) to Kruidvat Beheer BV, a private Dutch owned chain
of Health and Beauty stores. This will create one of the leading pan European
Health and Beauty retailers and will provide Superdrug and its people with
exciting opportunities for further development.
Contractual arrangements are being finalised, but it is expected that
completion will occur before the end of July, 2001. Total consideration,
including repayment of inter-group debt, will be £280 million (based on the 3
February 2001 Balance Sheet) and will be paid in cash on completion. This cash
will be used to reduce net debt of the Kingfisher group. There will be a loss
on disposal of some £55 million based on the existing book value of Superdrug.
In addition, under FRS10 there will be an accounting entry in the half year
profit and loss account of £288 million, representing an exceptional charge for
goodwill previously written off to reserves. This exceptional item will have
no impact on the Group's net asset value.
The freehold property occupied by Superdrug and owned by Chartwell Land will,
initially, be retained by Chartwell; but its future disposal is planned.
Taking the disposal of the property into account, total consideration from the
disposal of the Superdrug business is expected to be around £310 million.
DEMERGER DELIVERY ON TARGET FOR SECOND QUARTER
As previously announced the demerger remains on target for delivery by the end
of Kingfisher's first half.
The Listing Particulars and notice of EGM will be posted before the end of
Kingfisher's first half, 4th August 2001. Kingfisher shareholders will be
asked to approve the arrangements for the demerger at the EGM, two to three
weeks after posting of the Listing Particulars and EGM notice. Trading in the
shares of the demerged business would then be expected to commence in the week
after the EGM.
At the point of demerger the Executive Board of the Company will be:
* Gerald Corbett Chairman
* Christopher Rogers Finance Director
* Keith Fleming Managing Director of Woolworths
Their details are contained in the Appendix to this announcement. The names of
the non-executives will be announced in due course.
Gerald Corbett will initially work in the business full time as Chairman. A
full time Chief Executive, with significant retail experience, will be
appointed to the Board as soon as reasonably possible. Following this
appointment, and after a suitable settling in period, Gerald will step back
from a full time role, remaining as non-executive Chairman.
Commenting on these appointments, Sir Geoff Mulcahy, Kingfisher's Group Chief
Executive, said: 'The senior management team that we have appointed for the new
Woolworth Group, and which has the clear backing of the Kingfisher Board,
combines significant managerial, retailing and financial experience.'
Since the end of the first quarter Woolworths' overall like-for-like sales
growth has improved. A successful programme to reduce Woolworths' stock levels
and a strong performance in the entertainment category has, however, had an
adverse impact on Woolworths' margins. The profit impact of these and other,
short term, factors will be around £15 million this year.
PROPERTY DISPOSAL NEARING FINALISATION
The sale of those high street properties currently intended for disposal, which
have a book value of £596 million, remains on track for completion by the end
of the half year.
Ends
APPENDIX
Gerald Corbett (49) left Railtrack in November last year. He was Group Finance
Director of Grand Metropolitan plc from 1994 to 1997. Earlier in his career he
was with the Dixons Group for 5 years (1982-1987), first as Group Finance
Controller and then as Corporate Finance Director. Between 1987 and 1994 he was
Group Finance Director of Redland plc. He has held non executive directorships
at MEPC plc and Burmah Castrol plc. He was educated at Cambridge, the London
Business School and Harvard Business School.
Christopher Rogers (41) was appointed Finance Director of the demerging
businesses in May 2001. He was previously Commercial Director at Comet Group
plc, a position he held from 1997. Prior to that Christopher was Finance
Director at Comet from 1993. Before moving to Comet, Christopher was employed
by Kingfisher plc from 1988, where he was Group Financial Controller from 1991
to 1993, and from 1988 to 1991 Corporate Finance Manager with responsibility
for investor relations and corporate transactions. Christopher is also a Non
Executive Director of Time Retail Finance, Kingfisher's credit card operation.
After graduating from Durham University with a degree in Economics, Christopher
qualified as a Chartered Accountant with Price Waterhouse.
Keith Fleming (41) was appointed Managing Director of Woolworths in May 2000,
having previously held the position of Finance and Systems Director of
Woolworths since 1997. He has been employed by Woolworths for over 11 years
having joined as Financial Controller of the Commercial division in 1989. Keith
was previously Financial Director of Quadrant Communications and trained as a
Chartered Accountant at Moores and Rowland.
NOTES TO EDITORS
* After the separation Kingfisher plc will be Europe's leading
home retailer, operating principally through its two
international businesses in Home Improvement and Electrical &
Furniture. Around 55% of the Group's turnover will arise
outside of the UK. The company will employ around 90,000 people
in over 1,300 stores across 16 countries and will include some
of the best known retail brands in Europe including B&Q,
Castorama, Comet, Darty and BUT.
* Woolworth Group will operate in the UK home and family markets
with leading positions in entertainment confectionery and toys.
The new Group will employ around 30, 000 people in approximately
900 stores across the UK. Woolworth Group will comprise
Woolworths MVC and Streets Online as well as the UK's leading
distributor of CDs DVDs and videos Entertainment UK and VCI.
* Superdrug is the UK's second largest specialist health and
beauty retailer operating 706 stores. In the year to 3 February
2001 Superdrug reported a retail profit of £35 million on
turnover of £902 million.
* Kruidvat Beheer BV operates drugstores and perfume stores in the
Netherlands, Belgium, France, Poland, Hungary and the Czech
Republic. In the year 2000 Kruidvat Beheer's consolidated
store turnover totalled NLG 3.52 billion.
Media Enquiries:
Andrew Mills, Director of Corporate Affairs + 44 (0) 20 7725 5776
Tom Wyatt, Financial Dynamics + 44 (0) 20 7831 3113
Broker and Institutional Enquiries:
Ian Harding, Director of Investor Relations + 44 (0) 20 7725 4889
France:
Graham Fairbank, Head of Corporate Communications
+ 33 (0) 1 43 18 52 26
Kingfisher plc + 44 (0) 20 7724 7749
Kingfisher Website www.kingfisher.com
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