REG - Kingfisher PLC - Half Year Results (Part 2 of 2)
17/09/2024 07:00
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RNS Number : 3988E Kingfisher PLC 17 September 2024
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
Half year ended 31 July 2024 Half year ended 31 July 2023
£ millions Notes Before adjusting items Adjusting items (note 5) Total Before adjusting items Adjusting items (note 5) Total
Sales 4 6,756 - 6,756 6,880 - 6,880
Cost of sales (4,276) - (4,276) (4,385) - (4,385)
Gross profit 2,480 - 2,480 2,495 - 2,495
Selling and distribution expenses (1,583) (9) (1,592) (1,605) (21) (1,626)
Administrative expenses (510) 2 (508) (511) - (511)
Other income 10 - 10 12 2 14
Other expense - (3) (3) - - -
Share of post-tax results of joint ventures and associates (13) - (13) (5) - (5)
Operating profit 4 384 (10) 374 386 (19) 367
Finance costs (67) - (67) (64) - (64)
Finance income 17 - 17 14 - 14
Net finance costs 6 (50) - (50) (50) - (50)
Profit before taxation 334 (10) 324 336 (19) 317
Income tax expense 7 (91) 4 (87) (87) 7 (80)
Profit for the period 243 (6) 237 249 (12) 237
Earnings per share 8
Basic 12.8p 12.4p
Diluted 12.6p 12.2p
Adjusted basic 13.2p 13.0p
Adjusted diluted 13.0p 12.8p
The proposed interim ordinary dividend for the period ended 31 July 2024 is
3.80p per share (2023/24: 3.80p per share).
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
Year ended 31 January 2024
£ millions Notes Before adjusting Adjusting Total
items items
(note 5)
Sales 4 12,980 - 12,980
Cost of sales (8,204) - (8,204)
Gross profit 4,776 - 4,776
Selling and distribution expenses (3,143) (87) (3,230)
Administrative expenses (982) (8) (990)
Other income 23 2 25
Share of post-tax results of joint ventures and associates (1) - (1)
Operating profit 4 673 (93) 580
Finance costs (133) - (133)
Finance income 28 - 28
Net finance costs 6 (105) - (105)
Profit before taxation 568 (93) 475
Income tax expense 7 (153) 23 (130)
Profit for the year 415 (70) 345
Earnings per share 8
Basic 18.2p
Diluted 18.0p
Adjusted basic 21.9p
Adjusted diluted 21.6p
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
£ millions Half year ended Half year ended Year ended
31 July 2024 31 July 2023 31 January 2024
Notes
Profit for the period 237 237 345
Remeasurements of post-employment benefits 11 1 (9) (42)
Inventory cash flow hedges - fair value losses (6) (40) (32)
Tax on items that will not be reclassified 7 34 14 28
Total items that will not be reclassified 29 (35) (46)
subsequently to profit or loss
Currency translation differences
Subsidiaries (28) (10) (3)
Joint ventures and associates 2 (4) (1)
Transferred to income statement - (2) (2)
Inventory cash flow hedges - losses transferred to income statement - 9 12
Tax on items that may be reclassified - - (2)
Total items that may be reclassified subsequently to profit or loss (26) (7) 4
Other comprehensive income/(expense) for the period 3 (42) (42)
Total comprehensive income for the period 240 195 303
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Half year ended 31 July 2024
Share capital Own shares held Capital Other Total equity
£ millions (note 13) Share Retained earnings redemption reserves
premium reserve (note 14)
At 1 February 2024 294 2,228 (31) 3,741 82 290 6,604
Profit for the period - - - 237 - - 237
Other comprehensive income/(expense) for the period - - - 34 - (31) 3
Total comprehensive income/(expense) for the period - - - 271 - (31) 240
Inventory cash flow hedges - losses transferred to inventories - - - - - 15 15
Share-based compensation - - - 12 - - 12
New shares issued under share schemes - - - 1 - - 1
Own shares issued under share schemes - - 11 (11) - - -
Purchase of own shares for cancellation (5) - - (100) 5 - (100)
Purchase of own shares for ESOP trust - - (26) - - - (26)
Dividends - - - (159) - - (159)
Tax on equity items - - - - - (3) (3)
At 31 July 2024 289 2,228 (46) 3,755 87 271 6,584
Half year ended 31 July 2023
Share capital (note 13) Own shares held Capital Other Total equity
£ millions Share Retained earnings redemption reserves
premium reserve (note 14)
At 1 February 2023 305 2,228 (22) 3,796 71 285 6,663
Profit for the period - - - 237 - - 237
Other comprehensive expense for the period - - - (4) - (38) (42)
Total comprehensive income/(expense) for the period - - - 233 - (38) 195
Inventory cash flow hedges - losses transferred to inventories - - - - - 12 12
Share-based compensation - - - 12 - - 12
New shares issued under share schemes - - - 2 - - 2
Own shares issued under share schemes - - 9 (9) - - -
Purchase of own shares for cancellation (6) - - (103) 6 - (103)
Purchase of own shares for ESOP trust - - (24) - - - (24)
Dividends - - - (165) - - (165)
Tax on equity items - - - - - (4) (4)
At 31 July 2023 299 2,228 (37) 3,766 77 255 6,588
Year ended 31 January 2024
Share capital (note 13) Own shares held Capital Other Total equity
£ millions Share Retained earnings redemption reserves
premium reserve (note 14)
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 - - - (237) - - (237)
Tax on equity items - - - (1) - (6) (7)
At 31 January 2024 294 2,228 (31) 3,741 82 290 6,604
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED BALANCE SHEET
£ millions Notes At 31 July 2024 At 31 July 2023 At 31 January 2024
Non-current assets
Goodwill 2,397 2,407 2,398
Other intangible assets 10 338 372 368
Property, plant and equipment 10 3,171 3,168 3,206
Investment property 10 30 28 27
Right-of-use assets 1,871 1,934 1,881
Investments in joint ventures and associates 8 12 19
Post-employment benefits 11 216 243 212
Deferred tax assets 8 19 10
Other tax authority asset 17 70 67 68
Other receivables 15 16 15
8,124 8,266 8,204
Current assets
Inventories 2,979 3,132 2,914
Trade and other receivables 385 393 344
Derivative assets 12 3 4 2
Current tax assets 54 44 73
Cash and cash equivalents 485 344 360
Assets held for sale - 3 3
3,906 3,920 3,696
Total assets 12,030 12,186 11,900
Current liabilities
Trade and other payables (2,653) (2,665) (2,445)
Borrowings 12 (63) (28) (7)
Lease liabilities (356) (350) (366)
Derivative liabilities 12 (15) (54) (23)
Current tax liabilities (16) (2) (12)
Provisions (8) (9) (9)
(3,111) (3,108) (2,862)
Non-current liabilities
Other payables (4) (4) (3)
Borrowings 12 (50) (101) (102)
Lease liabilities (1,968) (2,048) (2,001)
Derivative liabilities 12 (1) (3) (1)
Deferred tax liabilities (190) (207) (207)
Provisions (6) (11) (7)
Post-employment benefits 11 (116) (116) (113)
(2,335) (2,490) (2,434)
Total liabilities (5,446) (5,598) (5,296)
Net assets 6,584 6,588 6,604
Equity
Share capital 13 289 299 294
Share premium 2,228 2,228 2,228
Own shares held in ESOP trust (46) (37) (31)
Retained earnings 3,755 3,766 3,741
Capital redemption reserve 87 77 82
Other reserves 14 271 255 290
Total equity 6,584 6,588 6,604
The interim financial report was approved by the Board of Directors on 16
September 2024 and signed on its behalf by:
Thierry Garnier, Chief Executive Officer Bernard Bot, Chief Financial Officer
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED CASH FLOW STATEMENT
£ millions Notes Half year ended Half year ended Year ended
31 July 2024 31 July 2023 31 January 2024
Operating activities
Cash generated by operations 15 858 796 1,438
Income tax paid (48) (68) (117)
Net cash flows from operating activities 810 728 1,321
Investing activities
Purchase of property, plant and equipment and intangible assets (153) (164) (363)
Disposal of property, plant and equipment, assets held for sale and intangible - - 2
assets
Purchase of businesses - (3) (3)
Disposal of subsidiaries and associates, net of cash disposed (3) 9 9
Interest received 12 7 16
Interest element of lease rental receipts - - 1
Principal element of lease rental receipts 2 1 3
Advance payments on right-of-use assets (2) (1) (4)
Net cash flows used in investing activities (144) (151) (339)
Financing activities
Interest paid (4) (2) (7)
Interest element of lease rental payments (62) (62) (126)
Principal element of lease rental payments (198) (176) (348)
Arrangement fees paid (2) - -
New shares issued under share schemes 1 2 4
Purchase of own shares for cancellation (92) (99) (160)
Purchase of own shares for ESOP trust (26) (24) (24)
Ordinary dividends paid to equity shareholders of the Company 9 (159) (165) (237)
Net cash flows used in financing activities (542) (526) (898)
Net increase in cash and cash equivalents and bank overdrafts 124 51 84
Cash and cash equivalents and bank overdrafts at beginning of period 353 270 270
Exchange differences (5) (4) (1)
Cash and cash equivalents and bank overdrafts at end of period 472 317 353
Kingfisher plc
2024/25 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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.
The interim financial report does not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Audited statutory accounts
for the year ended 31 January 2024 were approved by the Board of Directors on
24 March 2024 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under sections 498(2) or
(3) of the Companies Act 2006. The interim financial report has been reviewed,
not audited, and was approved by the Board of Directors on 16 September 2024.
2. Basis of preparation
The interim financial report for the six months ended 31 July 2024 ('the half
year') has been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial
Reporting', as adopted by the United Kingdom. It should be read in conjunction
with the annual financial statements for the year ended 31 January 2024, which
have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and International
Financial Reporting Standards (IFRS) as issued by the IASB. The consolidated
income statement and related notes represent results for continuing
operations, there being no discontinued operations in the periods presented.
Where comparatives are given, '2023/24' refers to the six months ended 31 July
2023.
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 not less than 12
months from the date of this report, and they continue to adopt the going
concern basis of accounting in preparing the condensed consolidated financial
statements for the period ended 31 July 2024.
Considering whether the Group's condensed consolidated 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). As of 31 July 2024, the Group had
access to over £1.1bn in total liquidity, including cash and cash equivalents
of £472m (net of bank overdrafts) and access to a £650m revolving credit
facility (RCF), due to expire in May 2027.
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 following 11 months. The total loss of sales in this
scenario is c.£1.4bn (10% 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 sufficient liquidity and remains in compliance with financial
covenants on credit facilities. Should a more extreme scenario occur than
currently forecast by the Directors under this remote scenario, the Group
would need to implement additional operational or financial measures.
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 interim financial report.
Principal rates of exchange against Sterling
Half year ended 31 July 2024 Half year ended 31 July 2023 Year ended 31 January 2024
Average Period end Average Period end Average Year end
Rate rate rate rate rate rate
Euro 1.17 1.19 1.15 1.17 1.15 1.17
US Dollar 1.27 1.28 1.24 1.29 1.25 1.27
Polish Zloty 5.05 5.09 5.25 5.14 5.20 5.08
Romanian Leu 5.84 5.91 5.66 5.77 5.71 5.83
Turkish Lira* 42.54 42.54 34.61 34.61 38.64 38.64
* Turkish Lira average exchange rates represent the closing rates for the
periods presented due to the application of hyperinflation accounting in
Turkey.
Risks and uncertainties
The principal risks and uncertainties to which the Group is exposed are set
out on pages 59-64 of the Kingfisher plc Annual Report and Accounts for the
year ended 31 January 2024. These have been reviewed as part of the Group's
half year procedures and are listed in the Financial Review in part 1 of this
announcement.
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. The Group
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 the Group 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 operating profit before central costs,
the Group's share of interest and tax of joint ventures and associates and
adjusting items. 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;
· 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 an 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.
3. 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, except where set out below. The critical
accounting estimates and judgements are set out in note 3 of the annual
financial statements for the year ended 31 January 2024 and remain unchanged.
Taxes on income for interim periods are accrued using the best estimate of the
effective tax rate that would be applicable to expected total annual earnings.
4. Segmental analysis
Income statement
Half year ended 31 July 2024
£ millions UK & Ireland France Poland Other Other
International Total
Sales 3,376 2,099 941 340 1,281 6,756
Retail profit/(loss) 325 69 50 (24) 26 420
Central costs (29)
Share of interest and tax of joint ventures and associates (7)
Adjusting items (10)
Operating profit 374
Net finance costs (50)
Profit before taxation 324
Half year ended 31 July 2023
£ millions UK & Ireland France Poland Other Other International
Total
Sales 3,346 2,311 880 343 1,223 6,880
Retail profit/(loss) 306 104 35 (12) 23 433
Central costs (36)
Share of interest and tax of joint ventures and associates (11)
Adjusting items (19)
Operating profit 367
Net finance costs (50)
Profit before taxation 317
Year ended 31 January 2024
£ millions UK & Ireland France Poland Other Other International
Total
Sales 6,387 4,246 1,694 653 2,347 12,980
Retail profit/(loss) 555 139 82 (27) 55 749
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
Balance sheet
At 31 July 2024
£ millions UK & Ireland France Poland Other Other International
Total
Segment assets 2,915 1,688 1,123 321 1,444 6,047
Central assets 92
Goodwill 2,397
Net debt (1,952)
Net assets 6,584
At 31 July 2023
£ millions UK & Ireland France Poland Other Other International
Total
Segment assets 2,974 1,784 1,186 352 1,538 6,296
Central assets 66
Goodwill 2,407
Net debt (2,181)
Net assets 6,588
At 31 January 2024
£ millions UK & Ireland France Poland Other Other International
Total
Segment assets 2,931 1,753 1,195 360 1,555 6,239
Central assets 83
Goodwill 2,398
Net debt (2,116)
Net assets 6,604
The operating segments disclosed above are based on the information reported
internally to the Board of Directors and Group Executive, representing the
geographical areas in which the Group operates. The Group only has one
reportable business segment, being the supply of home improvement products and
services. The majority of the sales in each geographical area are derived from
in-store and online sales of products.
The 'Other International' segment consists of Poland, Iberia, Romania, the
joint venture Koçtaş in Turkey, NeedHelp, Screwfix International and results
from franchise agreements. Poland has been shown separately due to its
significance. On 18 July 2024, we completed a divestment of our c.80% equity
interest in NeedHelp.
Central assets comprise unallocated head office and other central items,
principally relating to central tax assets, partially offset by central
creditors and accruals including insurance and payroll.
The Group's sales, although generally not highly seasonal on a half yearly
basis, do increase over the Easter period and during the summer months leading
to slightly higher sales usually being recognised in the first half of the
year. However, due to the continued uncertainty around the current
macro-economic environment, the phasing of sales is less predictable.
5. Adjusting items
£ millions Half year ended Half year ended Year ended
31 July 2024 31 July 2023 31 January 2024
Included within selling and distribution expenses
Net store asset impairment losses (6) (14) (76)
Operating model restructuring (3) (7) (11)
(9) (21) (87)
Included within administrative expenses
NeedHelp goodwill impairment - - (8)
UK guaranteed minimum pension credit 2 - -
2 - (8)
Included within other income/expenses
Loss on disposal of NeedHelp (3) - -
Profit on disposal of Crealfi associate investment - 2 2
(3) 2 2
Adjusting items before tax (10) (19) (93)
Prior year and other adjusting tax items 4 7 23
Adjusting items (6) (12) (70)
In consideration of H1 2024/25 performance to date in France, we have revised
future projections for a number of stores. This has resulted in the
recognition of £6m of net store impairment charges in the period.
During the prior year, the Group commenced formal consultation with employee
representatives regarding the Group's Technology operating model restructuring
programme. Operating model restructuring costs of £3m have been recorded in
the period relating to this programme. The programme is expected to be
completed in the second half of the year at a total cost of c.£15m, in line
with previous expectations.
During the period, we have updated the methodology under which the liability
relating to guaranteed minimum pension equalisation is calculated, to reflect
the methodology chosen by the Trustees, which has resulted in a £2m credit.
During the period, the Group completed the disposal of its 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, and refunds from tax authorities.
Refer to note 5 of the 2023/24 interim accounts for further details on
adjusting items for the half year ended 31 July 2023, and to note 6 of the
2023/24 annual accounts for further details on adjusting items for the year
ended 31 January 2024.
6. Net finance costs
£ millions Half year ended 31 July 2024 Half year ended 31 July 2023 Year ended
31 January 2024
Fixed term debt (4) (2) (7)
Lease liabilities (62) (62) (126)
Other interest expense (1) - -
Finance costs (67) (64) (133)
Cash and cash equivalents and short-term deposits 12 7 16
Net interest income on defined benefit pension schemes 3 4 7
Finance lease income - - 1
Other interest income 2 3 4
Finance income 17 14 28
Net finance costs (50) (50) (105)
Interest on fixed term debt includes amortisation of arrangement fees on
borrowing facilities of £1m (2023/24: £nil). Amortisation of arrangement
fees on borrowing facilities for the year ended 31 January 2024 was £nil.
7. Income tax expense
£ millions Half year ended Half year ended Year ended
31 July 2024
31 January 2024
31 July 2023
UK corporation tax
Current tax on profits for the period (52) (46) (73)
Adjustments in respect of prior years - 1 2
(52) (45) (71)
Overseas tax
Current tax on profits for the period (20) (24) (37)
Adjustments in respect of prior years 3 2 8
(17) (22) (29)
Current tax (69) (67) (100)
Deferred tax
Current period (17) (13) (25)
Adjustments in respect of prior years (1) - (4)
Adjustments in respect of changes in tax rates - - (1)
(18) (13) (30)
Income tax expense (87) (80) (130)
The adjusted effective tax rate on profit before adjusting items is 27%
(2023/24: 26%), representing the best estimate of the effective rate for the
full financial year. The adjusted effective tax rate on the same basis for the
year ended 31 January 2024 was 27%. The adjusted effective tax rate
calculation is set out in the Financial Review in part 1 of this announcement.
An accounting surplus is recognised for the UK defined benefit pension scheme
- refer to note 11. The surplus has been recognised on the basis that the
future economic benefits are unconditionally available to the Group, which is
assumed to be via a refund assuming the full settlement of plan liabilities in
the event of a plan wind-up. On 22 November 2023, the UK government announced
that the authorised surplus payments charge would be reduced from 35% to 25%
from 6 April 2024. Following the enactment of this legislation on 11 March
2024, the deferred tax liability has been reduced by £32m with a
corresponding credit to other comprehensive income.
8. Earnings per share
Pence Half year ended Half year ended 31 July 2023 Year ended
31 July 2024 31 January 2024
Basic earnings per share 12.8 12.4 18.2
Effect of dilutive share options (0.2) (0.2) (0.2)
Diluted earnings per share 12.6 12.2 18.0
Basic earnings per share 12.8 12.4 18.2
Adjusting items before tax 0.5 1.0 4.9
Prior year and other adjusting tax items (0.1) (0.4) (1.2)
Adjusted basic earnings per share 13.2 13.0 21.9
Diluted earnings per share 12.6 12.2 18.0
Adjusting items before tax 0.5 1.0 4.8
Prior year and other adjusting tax items (0.1) (0.4) (1.2)
Adjusted diluted earnings per share 13.0 12.8 21.6
The calculation of basic and diluted earnings per share is based on the profit
for the period attributable to equity shareholders of the Company. A
reconciliation of statutory earnings to adjusted earnings is set out below:
£ millions Half year ended 31 July 2024 Half year ended 31 July 2023 Year ended
31 January 2024
Earnings 237 237 345
Adjusting items before tax 10 19 93
Prior year and other adjusting tax items (4) (7) (23)
Adjusted earnings 243 249 415
The weighted average number of shares in issue during the period, excluding
those held in the Employee Share Ownership Plan Trust ('ESOP trust'), is set
out below:
Weighted average number of shares (millions) Half year ended Half year ended 31 July 2023 Year ended
31 July 2024 31 January 2024
Basic 1,850 1,918 1,898
Diluted 1,878 1,943 1,921
9. Dividends
Half year ended Half year ended Year ended
£ millions 31 July 2024 31 July 2023 31 January 2024
Dividends to equity shareholders of the Company
Ordinary final dividend for the year ended 31 January 2024 of 8.60p per share 159 - -
Ordinary interim dividend for the year ended 31 January 2024 of 3.80p per - - 72
share
Ordinary final dividend for the year ended 31 January 2023 of 8.60p per share - 165 165
159 165 237
The proposed interim ordinary dividend for the period ended 31 July 2024 is
3.80p per share (2023/24: 3.80p per share).
10. Property, plant and equipment, investment property and other
intangible assets
Additions to the cost of property, plant and equipment, investment property
and other intangible assets are £126m (2023/24: £152m) and for the year
ended 31 January 2024 were £371m. Disposals in net book value of property,
plant and equipment, investment property, property assets held for sale and
other intangible assets are £nil (2023/24: nil) and for the year ended 31
January 2024 were £2m.
Capital commitments contracted but not provided for at the end of the period
are £49m (2023/24: £50m) and at 31 January 2024 were £31m.
11. Post-employment benefits
Half year ended Half year ended Year ended
£ millions 31 July 2024 31 July 2023 31 January 2024
Net surplus in schemes at beginning of period 99 137 137
Current service cost (6) (7) (11)
Past service credit 2 - 3
Administration costs (2) (2) (4)
Net interest income 3 4 7
Net remeasurement gains/(losses) 1 (9) (42)
Contributions paid by employer 2 - 5
Exchange differences 1 4 4
Net surplus in schemes at end of period 100 127 99
UK 216 243 212
Overseas (116) (116) (113)
Net surplus in schemes at end of period 100 127 99
Present value of defined benefit obligations (1,944) (1,916) (1,959)
Fair value of scheme assets 2,044 2,043 2,058
Net surplus in schemes at end of period 100 127 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 provided in note 28 of the annual financial statements
for the year ended 31 January 2024.
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 agreed to
cease annual employer contributions during the period from August 2022 to July
2025. This agreement was 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
principles 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 at future valuations.
A key assumption in valuing the pension obligation 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, being the Group's
principal defined benefit scheme, are set out below:
At At At
Annual % rate 31 July 2024 31 July 2023 31 January 2024
Discount rate 5.00 5.15 4.85
Rate of pension increases 3.05 3.05 2.95
On 25 July 2024, in the case Virgin Media v NTL Pension Trustees II Limited
(and others), the Court of Appeal upheld the High Court's 2023 decision which
confirmed that certain rules of a contracted-out DB scheme cannot be altered
without the statutory actuarial confirmation having been obtained and that
non-compliant alterations are void. The pension trustees have commenced their
assessment as to whether the ruling has any implications on the UK defined
benefit scheme.
12. Financial instruments
The Group holds the following derivative financial instruments at fair value:
At At At
£ millions 31 July 2024 31 July 2023 31 January 2024
Foreign exchange contracts 3 4 2
Derivative assets 3 4 2
At At At
£ millions 31 July 2024 31 July 2023 31 January 2024
Foreign exchange contracts (16) (57) (24)
Derivative liabilities (16) (57) (24)
The fair values are calculated by discounting future cash flows arising from
the instruments and adjusted for credit risk. These fair value measurements
are all made using observable market rates of interest, foreign exchange and
credit risk. All the derivatives held by the Group at fair value are
considered to have fair values determined by level 2 inputs as defined by the
fair value hierarchy of IFRS 13, 'Fair value measurement', representing
significant observable inputs other than quoted prices in active markets for
identical assets or liabilities. There are no non-recurring fair value
measurements nor have there been any transfers of assets or liabilities
between levels of the fair value hierarchy.
Except as detailed in the following table of borrowings, the carrying amounts
of financial instruments (excluding lease liabilities) recorded at amortised
cost in the financial statements are approximately equal to their fair values.
Where available, market values have been used to determine the fair values of
borrowings. Where market values are not available or are not reliable, fair
values have been calculated by discounting cash flows at prevailing interest
and foreign exchange rates. This has resulted in level 2 inputs for borrowings
as defined by the IFRS 13 fair value hierarchy.
Carrying amount
£ millions At At At
31 July 2024 31 July 2023 31 January 2024
Bank overdrafts 13 27 7
Bank loans - 3 3
Fixed term debt 100 99 99
Borrowings 113 129 109
Fair value
£ millions At At At
31 July 2024 31 July 2023 31 January 2024
Bank overdrafts 13 27 7
Bank loans - 4 3
Fixed term debt 107 107 101
Borrowings 120 138 111
Cash and borrowings balances at 31 July 2024, 31 July 2023 and 31 January 2024
reflect the grossing up of cash and overdraft balances subject to the Group's
cash pooling arrangements to ensure the Group's presentation of these balances
is in line with the requirements for offsetting in accordance with IAS 32 -
Financial Instruments: Presentation.
Fixed term debt comprises a £50m term loan maturing in June 2025 and a £50m
term loan maturing in January 2026.
As at 31 July 2024, the Group had an undrawn revolving credit facility (RCF)
of £650m, due to expire in May 2027. This replaced the £550m facility (of
which £46m was due to expire in May 2025 & £504m in May 2026) following
a refinancing in May 2024.
13. Share capital
Number of Ordinary
ordinary shares share capital
millions £ millions
Allotted, called up and fully paid:
At 1 February 2024 1,875 294
New shares issued under share schemes 1 -
Purchase of own shares for cancellation (36) (5)
At 31 July 2024 1,840 289
At 1 February 2023 1,940 305
New shares issued under share schemes 2 -
Purchase of own shares for cancellation (41) (6)
At 31 July 2023 1,901 299
At 1 February 2023 1,940 305
New shares issued under share schemes 2 -
Purchase of own shares for cancellation (67) (11)
At 31 January 2024 1,875 294
Ordinary shares have a par value of 155/(7) pence per share and carry full
voting, dividend and capital distribution rights.
During the period the Group purchased 36 million (2023/24: 41 million) of the
Company's own shares for cancellation at a cost of £92m (2023/24: £99m) as
part of its capital returns programme. For the year ended 31 January 2024, the
Group purchased 67 million of the Company's own shares for cancellation at a
cost of £160m.
14. Other reserves
Half year ended 31 July 2024
Translation reserve Cash flow Other
£ millions hedge reserve Total
At 1 February 2024 144 (13) 159 290
Inventory cash flow hedges - fair value losses - (6) - (6)
Tax on items that will not be reclassified subsequently to profit or loss - 1 - 1
Currency translation differences - - (28)
Subsidiaries
(28)
Joint ventures and associates 2 - - 2
Other comprehensive expense for the period (26) (5) - (31)
Inventory cash flow hedges - losses transferred to inventories - 15 - 15
Tax on equity items - (3) - (3)
At 31 July 2024 118 (6) 159 271
Half year ended 31 July 2023
Translation reserve Cash flow Other
£ millions hedge reserve Total
At 1 February 2023 150 (24) 159 285
Inventory cash flow hedges - fair value losses - (40) - (40)
Tax on items that will not be reclassified subsequently to profit or loss - 9 - 9
Currency translation differences (10) - - (10)
Subsidiaries
Joint ventures and associates (4) - - (4)
Transferred to income statement (2) - - (2)
Inventory cash flow hedges - losses transferred to income statement - 9 - 9
Other comprehensive expense for the period (16) (22) - (38)
Inventory cash flow hedges - losses transferred to inventories - 12 - 12
Tax on equity items - (4) - (4)
At 31 July 2023 134 (38) 159 255
Year ended 31 January 2024
£ millions Translation reserve Cash flow hedge reserve Other Total
At 1 February 2023 150 (24) 159 285
Inventory cash flow hedges - fair value losses - (32) - (32)
Tax on items that will not be reclassified subsequently to profit or loss - 6 - 6
Currency translation differences (3) - - (3)
Subsidiaries
Joint ventures and associates (1) - - (1)
Transferred to income statement (2) - - (2)
Inventory cash flow hedges - losses transferred to income statement - 12 - 12
Tax on items that may be reclassified subsequently to profit or loss - (2) - (2)
Other comprehensive expense for the year (6) (16) - (22)
Inventory cash flow hedges - losses transferred to inventories - 33 - 33
Tax on equity items - (6) - (6)
At 31 January 2024 144 (13) 159 290
15. Cash generated by operations
£ millions Half year ended Half year ended Year ended
31 July 2024
31 July 2023
31 January 2024
Operating profit 374 367 580
Share of post-tax results of joint ventures and associates 13 5 1
Depreciation and amortisation 330 315 641
Net impairment losses 6 14 87
Losses/(gains) on disposals of subsidiaries and associates 3 (2) (2)
Lease gains - (1) (7)
Share-based compensation charge 12 12 22
(Increase)/decrease in inventories (82) (89) 132
Increase in trade and other receivables (44) (53) (6)
Increase/(decrease) in trade and other payables 244 219 (14)
Movement in provisions (2) - (3)
Movement in post-employment benefits 4 9 7
Cash generated by operations 858 796 1,438
16. Net debt
£ millions At At At
31 July 2024 31 July 2023 31 January 2024
Cash and cash equivalents 485 344 360
Bank overdrafts (13) (27) (7)
Cash and cash equivalents and bank overdrafts 472 317 353
Bank loans - (3) (3)
Fixed term debt (100) (99) (99)
Lease liabilities (2,324) (2,398) (2,367)
Net financing derivatives - 2 -
Net debt (1,952) (2,181) (2,116)
£ millions Half year ended Half year ended Year ended
31 July 2024 31 July 2023 31 January 2024
Net debt at beginning of period (2,116) (2,274) (2,274)
Net increase in cash and cash equivalents and bank overdrafts 124 51
84
Arrangement fees paid 2 - -
Net cash flow 126 51 84
Movements in lease liabilities 37 40 71
Exchange differences and other non-cash movements 1 2 3
Net debt at end of period (1,952) (2,181) (2,116)
17. 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.
In October 2017, the European Commission opened a State Aid investigation into
the Group Financing Exemption of the UK controlled foreign company rules.
While the Group has 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 constitute illegal state aid.
In January 2021, the company received a charging notice from HM Revenue &
Customs for £57m, which was paid in February 2021, with a further £7m
interest paid in April 2021.
The UK Government and the Company, along with other UK-based multinational
groups, appealed the European Commission decision to the European Courts. In
June 2022, the General Court of the European Union dismissed several of those
appeals, including the UK Government's. The decision of the General Court has
been appealed to the Court of Justice and the hearing took place on 10 January
2024. On 11 April 2024, the Advocate General's opinion was published,
proposing that the Court of Justice should set aside the judgement of the
General Court and annul the European Commission's decision. The final decision
is expected on 19 September 2024.
The final impact on the company remains uncertain but, based on advice taken,
the Group continues to consider that the amount paid of £64m plus repayment
interest accrued of £6m, which is included in non-current assets, will
ultimately be recovered.
18. Related party transactions
The Group's significant related parties are its joint venture and pension
schemes as disclosed in note 36 of the annual financial statements for the
year ended 31 January 2024. In the prior year, the Group completed the
disposal of its 49% interest in its French associate investment Crealfi S.A.
There have been no other significant changes in related parties or related
party transactions in the period.
19. Post balance sheet events
During the period since the balance sheet date, the Group purchased 2.4
million of the Company's own shares for cancellation at a cost of £8m. This
amount was deducted from equity in the half year to 31 July 2024 as a result
of an irrevocable buyback agreement which was in place at 31 July 2024.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that the condensed interim financial statements have
been prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting", and that the Interim
Results includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
· an indication of important events that have occurred during the
period and their impact on the interim condensed financial statements, and a
description of the principal risks and uncertainties for the remainder of the
financial year; and
· material related party transactions in the period and any
material changes in the related party transactions described in the last
annual report.
The Directors of Kingfisher plc were listed in the Group's 2023/24 Annual
Report and Accounts. A list of current Directors is maintained on the
Kingfisher plc website which can be found at www.kingfisher.com
(http://www.kingfisher.com) .
By order of the Board
Thierry
Garnier
Bernard Bot
Chief Executive
Officer
Chief Financial Officer
16 September
2024
16 September 2024
INDEPENDENT REVIEW REPORT TO KINGFISHER PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
July 2024 which comprises the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of changes in
equity, the consolidated balance sheet, the consolidated cash flow statement
and related notes 1 to 19.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 July 2024 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards and International Financial Reporting Standards as issued by the
IASB. The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
16 September 2024
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