REG - Kingfisher PLC - Final Results (Part 2 of 2)
25/03/2025 07:15
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RNS Number : 9552B Kingfisher PLC 25 March 2025
Consolidated income statement
Year ended 31 January 2025
2024/25 2023/24
Before adjusting items Adjusting items Before adjusting items Adjusting items
(note 4) (note 4)
£ millions Notes Total Total
Sales 3 12,784 - 12,784 12,980 - 12,980
Cost of sales (8,021) - (8,021) (8,204) - (8,204)
Gross profit 4,763 - 4,763 4,776 - 4,776
Selling and distribution expenses (3,122) (99) (3,221) (3,143) (87) (3,230)
Administrative expenses (1,018) (97) (1,115) (982) (8) (990)
Other income 20 - 20 23 2 25
Other expenses - (25) (25) - - -
Share of post-tax results (15) - (15) (1) - (1)
of joint ventures and associates
Operating profit 3 628 (221) 407 673 (93) 580
Finance costs (132) - (132) (133) - (133)
Finance income 32 - 32 28 - 28
Net finance costs 5 (100) - (100) (105) - (105)
Profit before taxation 528 (221) 307 568 (93) 475
Income tax expense 6 (147) 25 (122) (153) 23 (130)
Profit for the year 381 (196) 185 415 (70) 345
Earnings per share 7
Basic 10.1 18.2p
Diluted 9.9 18.0p
Adjusted basic 20.7 21.9p
Adjusted diluted 20.4 21.6p
The proposed dividend for the year ended 31 January 2025, subject to approval
by shareholders at the Annual General Meeting, is 12.40p per share, comprising
an interim dividend of 3.80p in respect of the six months ended 31 July 2024
and a final dividend of 8.60p.
Consolidated statement of comprehensive income
Year ended 31 January 2025
Notes 2024/25 2023/24
£ millions
Profit for the year 185 345
Remeasurements of post-employment benefits 9 (11) (42)
Inventory cash flow hedges - fair value gains/(losses) 22 (32)
Tax on items that will not be reclassified 28 28
Total items that will not be reclassified subsequently to profit or loss 39 (46)
Currency translation differences
Group (25) (3)
Joint ventures and associates 6 (1)
Transferred to income statement - (2)
Inventory cash flow hedges - losses transferred to income statement 1 12
Tax on items that may be reclassified - (2)
Total items that may be reclassified subsequently to profit or loss (18) 4
Other comprehensive income/(expense) for the year 21 (42)
Total comprehensive income for the year 206 303
Consolidated statement of changes in equity
Year ended 31 January 2025
2024/25
Share capital Own shares held Other reserves Total
£ millions Notes Share Retained earnings Capital redemption reserve equity
premium
At 1 February 2024 294 2,228 (31) 3,741 82 290 6,604
Profit for the year - - - 185 - - 185
Other comprehensive income/(expense) for the year - - - 23 - (2) 21
Total comprehensive income/(expense) for the year - - - 208 - (2) 206
Inventory cash flow hedges - losses transferred to inventories - - - - - 15 15
Share-based compensation - - - 20 - - 20
New shares issued under share schemes - - - 2 - - 2
Own shares issued under share schemes - - 23 (23) - - -
Purchase of own shares for cancellation (12) - - (251) 12 - (251)
Purchase of own shares for ESOP trust - - (26) - - - (26)
Dividends 8 - - - (228) - - (228)
Tax on equity items - - - 6 - (4) 2
At 31 January 2025 282 2,228 (34) 3,475 94 299 6,344
2023/24
Share capital Own shares held Other reserves Total
£ millions Notes Share Retained earnings Capital redemption reserve equity
premium
At 1 February 2023 305 2,228 (22) 3,796 71 285 6,663
Profit for the year - - - 345 - - 345
Other comprehensive expense for the year - - - (20) - (22) (42)
Total comprehensive income/(expense) for the year - - - 325 - (22) 303
Inventory cash flow hedges - losses transferred to inventories - - - - - 33 33
Share-based compensation - - - 22 - - 22
New shares issued under share schemes - - - 4 - - 4
Own shares issued under share schemes - - 15 (15) - - -
Purchase of own shares for cancellation (11) - - (153) 11 - (153)
Purchase of own shares for ESOP trust - - (24) - - - (24)
Dividends 8 - - - (237) - - (237)
Tax on equity items - - - (1) - (6) (7)
At 31 January 2024 294 2,228 (31) 3,741 82 290 6,604
Consolidated balance sheet
At 31 January 2025
£ millions Notes 2024/25 2023/24
Non-current assets
Goodwill 2,312 2,398
Other intangible assets 312 368
Property, plant and equipment 3,105 3,206
Investment property 34 27
Right-of-use assets 1,771 1,881
Investments in joint ventures and associates 29 19
Post-employment benefits 9 202 212
Deferred tax assets 7 10
Other tax authority asset 12 - 68
Derivative assets 2 -
Other receivables 11 15
7,785 8,204
Current assets
Inventories 2,719 2,914
Trade and other receivables 276 344
Derivative assets 22 2
Current tax assets 78 73
Other tax authority asset 12 69 -
Cash and cash equivalents 336 360
Assets held for sale 158 3
3,658 3,696
Total assets 11,443 11,900
Current liabilities
Trade and other payables (2,355) (2,445)
Borrowings (108) (7)
Lease liabilities (345) (366)
Derivative liabilities (5) (23)
Current tax liabilities (6) (12)
Provisions (16) (9)
Liabilities directly associated with assets held for sale (92) -
(2,927) (2,862)
Non-current liabilities
Other payables (2) (3)
Borrowings (1) (102)
Lease liabilities (1,866) (2,001)
Derivative liabilities - (1)
Deferred tax liabilities (193) (207)
Provisions (9) (7)
Post-employment benefits 9 (101) (113)
(2,172) (2,434)
Total liabilities (5,099) (5,296)
Net assets 6,344 6,604
Equity
Share capital 282 294
Share premium 2,228 2,228
Own shares held in ESOP trust (34) (31)
Retained earnings 3,475 3,741
Capital redemption reserve 94 82
Other reserves 299 290
Total equity 6,344 6,604
The financial statements were approved by the Board of Directors on 24 March
2025 and signed on its behalf by:
Thierry Garnier
Bhavesh Mistry
Chief Executive Officer
Chief Financial Officer
Consolidated cash flow statement
Year ended 31 January 2025
£ millions Notes 2024/25 2023/24
Operating activities
Cash generated by operations 10 1,411 1,438
Income tax paid (109) (117)
Net cash flows from operating activities 1,302 1,321
Investing activities
Purchase of property, plant and equipment and intangible assets (317) (363)
Proceeds from disposals of property, plant and equipment, intangible assets 2 2
and assets held for sale
Purchase of businesses - (3)
Joint venture capital contributions (19) -
Disposal of subsidiaries and associates, net of cash disposed (3) 9
Interest received 23 16
Interest element of lease rental receipts 1 1
Principal element of lease rental receipts 2 3
Advance payments on right-of-use assets (5) (4)
Net cash flows used in investing activities (316) (339)
Financing activities
Interest paid (8) (7)
Interest element of lease rental payments (123) (126)
Principal element of lease rental payments (387) (348)
Arrangement fees paid (2) -
New shares issued under share schemes 2 4
Purchase of own shares for cancellation (225) (160)
Purchase of own shares for ESOP trust (26) (24)
Ordinary dividends paid to equity shareholders of the Company 8 (228) (237)
Net cash flows used in financing activities (997) (898)
Net (decrease)/increase in cash and cash equivalents and bank overdrafts (11) 84
Cash and cash equivalents and bank overdrafts at beginning of year 353 270
Exchange differences (6) (1)
Cash and cash equivalents and bank overdrafts at end of year 11 336 353
Cash and cash equivalents and bank overdrafts at the end of the year include
£9m of cash included within assets held for sale on the balance sheet
(2023/24: £nil).
Notes
1 General information
Kingfisher plc ('the Company'), its subsidiaries, joint ventures and
associates (together 'the Group') supply home improvement products and
services through a network of retail stores and other channels, located mainly
in the United Kingdom and continental Europe.
The Company is incorporated in England and Wales, United Kingdom, and is
listed on the London Stock Exchange. The address of its registered office is
One Paddington Square, London, W2 1GG.
2 Basis of preparation
The consolidated financial statements of the Company, its subsidiaries, joint
ventures and associates are made up to 31 January. The current financial year
is the year ended 31 January 2025 ('the year' or '2024/25'). The comparative
financial year is the year ended 31 January 2024 ('the prior year' or
'2023/24').
The condensed financial information, which comprises the consolidated income
statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity, consolidated balance sheet, consolidated cash
flow statement and related notes do not constitute statutory financial
statements for the year ended 31 January 2025, but are derived from those
statements. Statutory financial statements for 2023/24 have been filed with
the Registrar of Companies and those for 2024/25 will be filed in due course.
The Group's auditors have reported on both years' accounts; their reports were
unqualified and did not contain statements under Section 498 (2) or (3) of the
Companies Act 2006.
The condensed financial information has been abridged from the 2024/25
statutory financial statements, which have been prepared in accordance with
United Kingdom adopted international accounting standards and International
Financial Reporting Standards (IFRS Standards). The financial statements have
also been prepared in accordance with International Financial Reporting
Standards as issued by the IASB. The consolidated income statement and related
notes represent results for continuing operations, there being no discontinued
operations in the years presented. The condensed financial information has
been prepared under the historical cost convention, as modified by the use of
valuations for certain financial instruments, share-based payments and
post-employment benefits.
Going concern
Based on the Group's liquidity position and cash flow projections, including a
forward--looking remote downside scenario, the Directors have a reasonable
expectation that the Company and the Group have adequate resources to continue
in operational existence for the foreseeable future, a period of at least 12
months from the date on which the financial statements are authorised for
issue, and they continue to adopt the going concern basis of accounting in
preparing the consolidated financial statements for the year ended 31 January
2025.
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the Financial Review in part 1 of this
announcement. The Directors have considered these areas alongside the
principal risks and how they may impact the going concern assessment. Further
details, including the analysis performed and conclusions reached, are set out
below.
As of 31 January 2025, Kingfisher had access to £986m of liquidity,
comprising cash and cash equivalents (net of bank overdrafts and including
cash held for sale) of £336m and access to an undrawn Revolving Credit
Facility (RCF) of £650m (which expires at the end of May 2027). The ratio of
net debt to Adjusted EBITDA was 1.6 as of 31 January 2025.
In considering whether the Group's financial statements can be prepared on a
going concern basis, the Directors have reviewed the Group's business
activities together with factors likely to affect its performance, financial
position and access to liquidity (including consideration of financial
covenants and credit ratings).
The terms of the RCF require that the ratio of Group operating profit
(excluding adjusting items) to net interest payable (excluding interest on
lease liabilities) must be no less than 3:1 for the preceding 12 months as at
the half and full year-ends. As of 31 January 2025, Kingfisher was compliant
with this requirement.
In forming their outlook on the future financial performance, the Directors
considered the risk of higher business volatility and the potential negative
impact of the general economic environment on household and trade spend.
The Directors' review also included consideration of a remote scenario that
models the impact of a significant demand or supply shock preventing the Group
from realising a large part of its sales over the period of a month followed
by subdued demand for the remainder of the year. The total loss of sales in
this scenario is c.£1.5bn (12% over the impacted period). The scenario
assumes the impact of lost sales is partially offset by a limited set of
mitigating actions on variable and discretionary costs, capital expenditure
and the suspension of capital returns to shareholders. Even under this remote
scenario, which requires drawing on the RCF for a few months, the Group
retains headroom on its credit facilities.
Given current trading and expectations for the business, the Directors believe
that this scenario reflects a remote outcome for the Group. Should a more
extreme scenario occur than currently modelled by the Directors under this
remote scenario, the Group would need to implement additional operational or
financial measures.
Accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 January 2024, as described in note
2 of those financial statements.
Critical accounting judgements and key sources of estimation uncertainty
The critical accounting judgements and key sources of estimation uncertainty
are consistent with those of the annual financial statements for the year
ended 31 January 2024, as described in note 3 of those financial statements,
except where set out below.
Following the reallocation of goodwill balances to retail banners (refer to
note 2), an impairment charge of £84m was recorded in relation to the
goodwill associated with Castorama France, resulting from higher discount
rates and revised financial projections. In addition, impairment of Castorama
France goodwill has been added as a new 'Key source of estimation uncertainty'
given the risk of further material impairments over the next 12 months.
In September 2024, the European Court of Justice annulled the decision in
relation to the European Commission's previous ruling in relation to the state
aid investigation into the Group Financing Exemption section of the UK
Controlled Foreign Company rules. As a result, this is no longer considered to
be a critical accounting judgment.
New and amended accounting standards
New standards, amendments and interpretations are in issue and effective for
the Group's financial year ended 31 January 2025, but they do not have a
material impact on the consolidated financial statements.
Use of non-GAAP measures
In the reporting of financial information, the Group uses certain measures
that are not required under IFRS, the generally accepted accounting principles
('GAAP') under which the Group reports. Kingfisher believes that retail
profit, adjusted pre-tax profit, adjusted effective tax rate, and adjusted
earnings per share provide additional useful information on performance and
trends to shareholders. These and other non-GAAP measures (also known as
'Alternative Performance Measures'), such as net debt, are used by Kingfisher
for internal performance analysis and incentive compensation arrangements for
employees. The terms 'retail profit', 'adjusting items', 'adjusted', 'adjusted
effective tax rate', 'net cashflow' and 'net debt' are not defined terms under
IFRS and may therefore not be comparable with similarly titled measures
reported by other companies. They are not intended to be a substitute for, or
superior to, GAAP measures.
Retail profit is defined as continuing profit before tax before central costs,
the Group's share of interest and tax of joint ventures and associates,
adjusting items and net finance costs. Central costs principally comprise the
costs of the Group's head office before adjusting items.
Adjusting items, which are presented separately within their relevant income
statement category, include items which by virtue of their size and/or nature,
do not reflect the Group's ongoing trading performance. Adjusting items may
include, but are not limited to:
· non-trading items included in operating profit such as profits
and losses on the disposal, closure, exit or impairment of subsidiaries, joint
ventures, associates and investments which do not form part of the Group's
ongoing trading activities;
· the costs of significant restructuring and incremental
acquisition integration costs;
· profits and losses on the disposal/exit of properties,
impairments of goodwill and significant impairments (or impairment reversals)
of other non-current assets, which the Group identifies as adjusting due to
volatility which can arise year on year based on future forecasts and
assumptions;
· prior year tax items (including the impact of changes in tax
rates on deferred tax), significant one-off tax settlements and provision
charges/releases and the tax effects of other adjusting items;
· financing fair value remeasurements i.e. changes in the fair
value of financing derivatives, excluding interest accruals, offset by fair
value adjustments to the carrying amount of borrowings and other hedged items
under fair value (or non-designated) hedge relationships. Financing
derivatives are those that relate to hedged items of a financing nature.
The term 'adjusted' refers to the relevant measure being reported for
continuing operations excluding adjusting items.
The adjusted effective tax rate is calculated as continuing income tax expense
excluding prior year tax items (including the impact of changes in tax rates
on deferred tax), significant one-off tax settlements and provision
charges/releases and the tax effects of other adjusting items, divided by
continuing profit before taxation excluding adjusting items. Prior year tax
items represent income statement tax relating to underlying items originally
arising in prior years, including the impact of changes in tax rates on
deferred tax. The exclusion of items relating to prior years, and those not in
the ordinary course of business, helps provide a better indication of the
Group's ongoing rate of tax.
Net debt comprises lease liabilities, borrowings and financing derivatives
(excluding accrued interest) less cash and cash equivalents and short-term
deposits, including such balances classified as held for sale.
Refer to the Financial Review for definitions of all of the Group's
Alternative Performance Measures, including further information on why they
are used and details of where reconciliations to statutory measures can be
found where applicable.
Segmental analysis
Determination of operating segments
Following the dissolution of the 'France'-level management structure during
the year, the change in internal reporting structures, and in consideration of
the increase in retail banner autonomy under the Group's 'Powered by
Kingfisher' strategy, the Group has reassessed its determination of operating
segments against the criteria defined under IFRS 8 - Operating segments.
Following this change in the management structure and resulting reassessment,
the Group has concluded that each retail banner now represents a separate
operating segment. The retail banner level determination of operating segments
primarily impacts the Groups' banners located in the UK & Ireland (i.e.
B&Q UK & Ireland and Screwfix UK & Ireland) and France (i.e.
Castorama France and Brico Dépôt France) where the operating segments have
historically been identified at a geographical level. This change does not
have any impact on the existing determination of operating segments for the
Group's retail banners outside of the UK & Ireland and France as there is
only one retail banner within each of the geographical locations.
Determination of reportable segments
In consideration of the change in determination of operating segments, the
Group has reassessed its reportable segments in line with the requirements of
IFRS 8. Following this reassessment and in consideration of the quantitative
results of the segments in the current period, it was considered appropriate
that the reportable segments should be UK & Ireland, France and Poland.
Within both the UK & Ireland and France reportable segments, operating
segments determined at the retail banner level have been aggregated to form
reportable segments (i.e. B&Q and Screwfix in the UK & Ireland and
Castorama and Brico Dépôt in France). Upon aggregation, it was identified
that the UK & Ireland and France segments meet the quantitative criteria
to be defined as reportable segments. Screwfix France has not been aggregated
as part of the France reportable segment due to its level of maturity relative
to Castorama France and Brico Dépôt France. As the Poland operating segment
meets the IFRS 8 quantitative threshold to be a reportable segment it has been
separated from the 'Other International' combined segment and presented as a
separate reportable segment. Other operating segments, which do not
individually meet the definition of a reportable segment, have been combined
and are presented as 'Other International'.
Goodwill impairment testing implications
As a result of the change to a retail banner level determination of operating
segments, the goodwill balances previously allocated to the UK & Ireland
and France CGUs have been reallocated to the retail banners within those
geographical areas (i.e. B&Q and Screwfix in the UK & Ireland and
Castorama and Brico Dépôt in France), and tested for impairment at that
level. Within Poland there is only one retail banner and so no reallocation is
required. In line with 'IAS 36 - Impairment of Assets', where undergoing
reporting structure changes, goodwill should be reallocated using a 'relative
value' approach. The Group has determined that each retail banners' relative
value-in-use represents the most appropriate methodology to determine
'relative value' and has reallocated the goodwill balances on this basis.
Following the above reallocation of goodwill balances to retail banners, an
impairment charge of £84m was recorded in relation to the goodwill associated
with Castorama France. In addition, impairment of Castorama France goodwill
has been added as a new 'Key source of estimation uncertainty' given the risk
of further material impairment over the next 12 months.
Principal rates of exchange against Sterling
2024/25 2023/24
Average rate Year end rate Average rate Year end rate
Euro 1.18 1.20 1.15 1.17
US Dollar 1.28 1.24 1.25 1.27
Polish Zloty 5.08 5.04 5.20 5.08
Romanian Leu 5.89 5.95 5.71 5.83
Turkish Lira(1) 44.38 44.38 38.64 38.64
(1) the Turkish Lira average exchange rates represent the closing rates for
the year, due to the application of hyperinflation accounting in Turkey.
3 Segmental analysis
Income statement
2024/25
UK & Ireland France Poland Other International Total
Sales 6,456 3,883 1,788 657 12,784
Retail profit/(loss) 558 95 90 (47) 696
Central costs (62)
Share of interest and tax of joint ventures and associates (6)
Adjusting items (221)
Operating profit 407
Net finance costs (100)
Profit before taxation 307
2023/24 (re-presented(1))
UK & Ireland France Poland Other International Total
Sales 6,387 4,246 1,694 653 12,980
Retail profit/(loss) 555 139 82 (27) 749
Central costs (60)
Share of interest and tax of joint ventures and associates (16)
Adjusting items (93)
Operating profit 580
Net finance costs (105)
Profit before taxation 475
(1)The Group has reassessed its determination of operating and reportable
segments in the year. Following this reassessment, Poland is now determined to
be a separate reportable segment and has been separated from the 'Other
International' combination of operating segments. Other operating segments,
which do not individually meet the definition of a reportable segment,
continue to be combined and are presented as 'Other International'. As a
result, the 2023/24 segmental disclosures presented above have been
re-presented to reflect this revised determination of reportable segments.
There are no changes to the Group's reportable segments in the UK &
Ireland and France.
The Group's operating segments are based on the information reported
internally to the Board of Directors and Group Executive, and are generally
determined to be the retail banners operating in each geographical area (i.e.
B&Q and Screwfix in the UK & Ireland, Castorama, Brico Dépôt and
Screwfix in France, Castorama in Poland, Brico Dépôt in Iberia, Brico
Dépôt in Romania and Koçtaş, the Group's joint venture in Turkey).
NeedHelp, an online services marketplace, and the Group's franchising and
wholesaling operation are also determined to be operating segments. On 18 July
2024, the Group completed the divestment of its c.80% equity interest in
NeedHelp.
The reportable segments disclosed above are based on the geographical areas in
which the Group operates. Within both the UK & Ireland and France
reportable segments, operating segments determined at the retail banner level
have been aggregated to form reportable segments (i.e. B&Q and Screwfix in
the UK & Ireland and Castorama and Brico Dépôt in France). Other
operating segments, which do not individually meet the definition of a
reportable segment, are combined and presented as 'Other International',
consisting of Brico Dépôt Iberia, Brico Dépôt Romania, Screwfix France,
Koçtaş, NeedHelp and results from franchising and wholesaling operations.
Screwfix France has not been aggregated as part of the France reportable
segment due to its level of maturity relative to Castorama and Brico Dépôt
France.
The principal activities of the Group are the supply of home improvement
products and services. The majority of the sales in each segment are derived
from in-store and online sales of products.
Central costs principally comprise the costs of the Group's head office before
adjusting items.
4 Adjusting items
2024/25 2023/24
£ millions
Included within selling and distribution expenses
Net store asset impairment losses (94) (76)
Operating model restructuring (5) (11)
(99) (87)
Included within administrative expenses
Castorama France goodwill impairment (84) -
Castorama France head office restructuring (15) -
UK guaranteed minimum pension credit 2 -
NeedHelp goodwill impairment - (8)
(97) (8)
Included within other income/(expenses)
Impairments of Romania assets and other exit costs (22) -
Loss on disposal of NeedHelp (3) -
Profit on disposal of Crealfi associate investment - 2
(25) 2
Adjusting items before tax (221) (93)
Prior year and other adjusting tax items 25 23
Adjusting items (196) (70)
Against the context of our performance in FY 24/25, we have revised future
financial projections for a number of stores across the Group's portfolio.
These revised projections, combined with the impact of higher discount rates
in France, have resulted in the recognition of £94m of net store impairment
charges in the year. Impairment charges of £118m have been recorded
principally in France and the UK, partially offset by impairment reversals of
£24m principally in France, driven by higher property market values.
During the prior year, the Group commenced formal consultations with employee
representatives regarding the Group's technology operating model restructuring
programme. Charges of £5m were recorded in the year relating to this
programme, which has now been completed.
Following the Group's reassessment of operating and reportable segments (refer
to note 2) and the resulting reallocation of goodwill balances to retail
banners, an impairment charge of £84m was recorded in relation to the
goodwill associated with Castorama France, resulting from increased discount
rates and revised financial projections.
During the year, the Group held formal consultations with employee
representatives regarding a head office restructuring programme in Castorama
France. Restructuring costs of £15m have been recognised related to this
programme, primarily relating to redundancy costs. No additional adjusting
costs expected to be incurred relating to this programme.
During the year, we updated the methodology under which the liability relating
to guaranteed minimum pension equalisation is calculated for the UK defined
benefit scheme, to reflect the methodology chosen by the Trustees, resulting
in a £2m credit.
In December 2024, the Group announced that it had reached an agreement to
dispose of its 100% interest in its Brico Dépôt Romania business for an
enterprise value of £58m. The sale is expected to complete during the first
half of 2025/26. Adjusting charges of £22m have been recognised in the year
relating to this disposal, principally relating to impairment charges
recognised on classification of the business as held for sale, and other exit
costs.
During the year, the Group completed the disposal of its c.80% interest in
NeedHelp for nil proceeds, resulting in a loss on disposal of £3m.
Prior year and other adjusting tax items relate principally to deferred tax
credits recorded in respect of the impairment and restructuring expenses noted
above, movements in prior year provisions to reflect a reassessment of
expected outcomes, agreed positions with tax authorities and items that have
time-expired.
5 Net finance costs
£ millions 2024/25 2023/24
Bank overdrafts, bank loans and derivatives (1) -
Fixed term debt (8) (7)
Lease liabilities (123) (126)
Finance costs (132) (133)
Cash and cash equivalents and short-term deposits 22 16
Net interest income on defined benefit pension schemes 7 7
Finance lease income 1 1
Other interest income 2 4
Finance income 32 28
Net finance costs (100) (105)
6 Income tax expense
£ millions 2024/25 2023/24
UK corporation tax
Current tax on profits for the year (79) (73)
Adjustments in respect of prior years 4 2
(75) (71)
Overseas tax
Current tax on profits for the year (26) (37)
Adjustments in respect of prior years 4 8
(22) (29)
Current tax (97) (100)
Deferred tax
Current year (13) (25)
Adjustments in respect of prior years (12) (4)
Adjustments in respect of changes in tax rates - (1)
Deferred tax (25) (30)
Income tax expense (122) (130)
The adjusted effective tax rate on profit before adjusting items is 28%
(2023/24: 27%). The adjusted effective tax rate calculation is set out in the
Financial Review in part 1 of this announcement.
7 Earnings per share
Pence 2024/25
2023/24
Basic earnings per share 10.1 18.2
Effect of dilutive share options per share (0.2) (0.2)
Diluted earnings per share 9.9 18.0
Basic earnings per share 10.1 18.2
Adjusting items before tax per share 12.0 4.9
Prior year and other adjusting tax items per share (1.4) (1.2)
Adjusted basic earnings per share 20.7 21.9
Diluted earnings per share 9.9 18.0
Adjusting items before tax per share 11.8 4.8
Prior year and other adjusting tax items per share (1.3) (1.2)
Adjusted diluted earnings per share 20.4 21.6
Basic earnings per share is calculated by dividing the profit for the year
attributable to equity shareholders of the Company by the weighted average
number of shares in issue during the year, including vested but contingently
issuable shares and excluding those held in the Employee Share Ownership Plan
trust ('ESOP trust') which for the purpose of this calculation are treated as
cancelled.
For diluted earnings per share, the weighted average number of shares is
adjusted to assume conversion of all dilutive potential ordinary shares. These
represent share options granted to employees where both the exercise price is
less than the average market price of the Company's shares during the year and
any related performance conditions have been met.
The calculation of basic and diluted earnings per share is based on the profit
for the year attributable to equity shareholders of the Company. A
reconciliation of statutory earnings to adjusted earnings is set out below:
£ millions 2024/25 2023/24
Earnings 185 345
Adjusting items before tax 221 93
Prior year and other adjusting tax items (25) (23)
Adjusted earnings 381 415
The weighted average number of shares in issue during the year, excluding
those held in the Employee Share Ownership Plan Trust ('ESOP trust'), is set
out below:
Weighted average number of shares (millions) 2024/25 2023/24
Basic 1,838 1,898
Effect of dilutive potential ordinary shares 29 23
Diluted 1,867 1,921
8 Dividends
£ millions 2024/25 2023/24
Dividends paid to equity shareholders of the Company
Ordinary interim dividend for the year ended 31 January 2025 of 3.80p per 69 72
share
(year ended 31 January 2024: 3.80p per share)
Ordinary final dividend for the year ended 31 January 2024 of 8.60p per share 159 165
(year ended 31 January 2023: 8.60p per share)
228 237
The proposed dividend for the year ended 31 January 2025, subject to approval
by shareholders at the Annual General Meeting, is 12.40p per share, comprising
an interim dividend of 3.80p in respect of the six months ended 31 July 2024
and a final dividend of 8.60p. The total final dividend for the year ended 31
January 2025 based on the issued share capital as at 31 January 2025 is
expected to be c.£154m. The final amount may vary depending on share
movements between the balance sheet and payment date.
9 Post-employment benefits
2024/25 2023/24
£ millions UK Overseas Total UK Overseas Total
Net surplus/(deficit) in schemes 212 (113) 99 251 (114) 137
at beginning of year
Current service cost (3) (7) (10) (3) (8) (11)
Past service credit 2 13 15 - 3 3
Administration costs (5) - (5) (4) - (4)
Net interest income/(expense) 10 (3) 7 11 (4) 7
Net remeasurement (losses)/gains (14) 3 (11) (43) 1 (42)
Contributions paid by employer - 5 5 - 5 5
Exchange differences - 1 1 - 4 4
Net surplus/(deficit) in schemes at end of year 202 (101) 101 212 (113) 99
Present value of defined benefit obligations (1,711) (121) (1,832) (1,826) (133) (1,959)
Fair value of scheme assets 1,913 20 1,933 2,038 20 2,058
Net surplus/(deficit) in schemes 202 (101) 101 212 (113) 99
The assumptions used in calculating the costs and obligations of the Group's
defined benefit pension schemes are set by the Directors after consultation
with independent professionally qualified actuaries. The assumptions are based
on the conditions at the time and changes in these assumptions can lead to
significant movements in the estimated obligations, as illustrated in the
sensitivity analysis.
A full actuarial valuation of the scheme is carried out every three years by
an independent actuary for the Trustee and the last full valuation was carried
out as at 31 March 2022. Following this valuation and in accordance with the
scheme's Statement of Funding Principles, the Trustee and Kingfisher have
agreed to cease annual employer contributions during the period from August
2022 to July 2025. This agreement has been reached with reference to a funding
objective that targets a longer-term, low risk funding position in excess of
the minimum statutory funding requirements. This longer-term objective is
based on the principle of the scheme reaching a point where it can provide
benefits to members with a high level of security, thereby limiting its
reliance on the employer for future support. The Company monitors the scheme
funding level on a regular basis and will reassess with the scheme Trustee the
appropriate level of contributions as part of the 2025 valuation.
A key assumption in valuing the pension obligations is the discount rate.
Accounting standards require this to be set based on market yields on
high-quality corporate bonds at the balance sheet date. The UK scheme discount
rate is derived using a single equivalent discount rate approach, based on the
yields available on a portfolio of high-quality Sterling corporate bonds with
the same duration as that of the scheme liabilities.
The principal financial assumptions for the UK scheme are as follows:
Annual % rate 2024/25 2023/24
Discount rate 5.40 4.85
Rate of pension increases 3.05 2.95
For the UK scheme, the mortality assumptions used have been selected with
regard to the characteristics and experience of the membership of the scheme
as assessed from time to time relating to triennial funding valuations. The
assumptions for life expectancy of UK scheme members are as follows:
Years 2024/25 2023/24
Age to which current pensioners are expected to live (60 now)
- Male 85.6 85.6
- Female 88.3 88.3
Age to which future pensioners are expected to live (60 in 15 years' time)
- Male 86.9 86.9
- Female 90.4 90.4
The following sensitivity analysis for the UK scheme shows the estimated
impact on the obligation resulting from changes to key actuarial assumptions,
whilst holding all other assumptions constant.
Assumption Change in assumption Impact on defined benefit obligation
Discount rate Increase/decrease by 0.5% Decrease/increase by £122m
Price inflation Increase/decrease by 0.25% Increase/decrease by £53m
Rate of pension increases Increase/decrease by 0.25% Increase/decrease by £50m
Mortality Increase/decrease in life expectancy by one year Increase/decrease by £59m
10 Cash generated by operations
£ millions 2024/25 2023/24
Operating profit 407 580
Share of post-tax results of joint ventures and associates 15 1
Depreciation and amortisation 656 641
Net impairment losses 198 87
Loss on disposal of property, plant and equipment and investment property 8 -
Loss/(profit) on disposal of subsidiaries and associates 3 (2)
Lease gains - (7)
Share-based compensation charge 20 22
Decrease in inventories 87 132
Decrease/(increase) in trade and other receivables 63 (6)
Decrease in trade and other payables (50) (14)
Movement in provisions 9 (3)
Movement in post-employment benefits (5) 7
Cash generated by operations 1,411 1,438
11 Net debt
£ millions 2024/25 2023/24
Cash and cash equivalents 336 360
Cash and cash equivalents included within assets held for sale 9 -
Bank overdrafts (9) (7)
Cash and cash equivalents and bank overdrafts 336 353
(including cash and cash equivalents held for sale)
Bank loans (1) (3)
Fixed term debt (99) (99)
Lease Liabilities (2,211) (2,367)
Lease Liabilities directly associated with assets held for sale (42) -
Net financing derivatives 2 -
Net debt (including net debt held for sale) (2,015) (2,116)
£ millions 2024/25 2023/24
Net debt at beginning of year (2,116) (2,274)
Net (decrease)/increase in cash and cash equivalents and bank overdrafts (11) 84
Arrangement fees paid 2 -
Net cash flow (9) 84
Movements in lease liabilities 107 71
Exchange differences and other non-cash movements 3 3
Net debt at end of year (2,015) (2,116)
12 Contingent liabilities
The Group is subject to claims and litigation arising in the ordinary course
of business and provision is made where liabilities are considered likely to
arise on the basis of current information and legal advice.
The Group files tax returns in many jurisdictions around the world and at any
one time is subject to periodic tax audits in the ordinary course of its
business. Applicable tax laws and regulations are subject to differing
interpretations and the resolution of a final tax position can take several
years to complete. Where it is considered that future tax liabilities are more
likely than not to arise, an appropriate provision is recognised in the
financial statements.
Whilst the procedures that must be followed to resolve these types of tax
issues make it likely that it will be some years before the eventual outcome
is known, the Group does not currently consider the likelihood of adverse
outcomes in relation to these matters (other than those matters for which
liabilities have already been recorded) to be probable.
In October 2017, the European Commission opened a state aid investigation into
the Group Financing Exemption section of the UK Controlled Foreign Company
rules. While the Group had complied with the requirements of UK tax law in
force at the time, in April 2019 the European Commission concluded that
aspects of the UK Controlled Foreign Company regime partially constituted
illegal state aid. In September 2024, the European Court of Justice annulled
this decision, and repayment of the tax and interest, totalling £69m, is
expected in 2025/26. At the balance sheet date, the Group is recognising this
amount as a current asset.
13 Post balance sheet events
During the period since the balance sheet date, the Group purchased 10 million
of the Company's own shares for cancellation at a cost of £26m. This amount
was deducted from equity in 2024/25 as a result of an irrevocable buyback
agreement which was in place at 31 January 2025.
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