REG - Kingfisher PLC - Preliminary Results Part 2 <Origin Href="QuoteRef">KGF.L</Origin>

KingfisherAnnouncement

31/03/2015 07:40

RNS Number : 9217I
Kingfisher PLC
31 March 2015
Consolidated income statement 

Year ended 31 January 2015









2014/15
2013/14
(restated - note 2)


Before
Exceptional

Before
Exceptional



exceptional
items

exceptional
items

 millions
Notes
Items
(note 4)
Total
items
(note 4)
Total
Sales
3
10,966
-
10,966
11,125
-
11,125
Cost of sales

(6,918)
-
(6,918)
(7,005)
-
(7,005)
Gross profit

4,048
-
4,048
4,120
-
4,120
Selling and distribution expenses 

(2,835)
(32)
(2,867)
(2,883)
2
(2,881)
Administrative expenses

(571)
-
(571)
(550)
-
(550)
Other income

40
(3)
37
37
2
39
Share of post-tax results
of joint ventures and associates

5
-
5
22
(14)
8
Operating profit 

687
(35)
652
746
(10)
736








Analysed as:







Retail profit
3
733
(35)
698
779
4
783
Central costs 

(40)
-
(40)
(42)
-
(42)
Share of interest and tax
of joint ventures and associates

(6)
-
(6)
(5)
-
(5)
Share of Hornbach operating profit

-
-
-
26
(14)
12
Share of Hornbach interest and tax

-
-
-
(12)
-
(12)








Finance costs

(13)
-
(13)
(12)
-
(12)
Finance income 

5
-
5
8
27
35
Net finance (costs)/income
5
(8)
-
(8)
(4)
27
23
Profit before taxation

679
(35)
644
742
17
759
Income tax expense
6
(177)
106
(71)
(163)
114
(49)
Profit for the year

502
71
573
579
131
710








Attributable to:







Equity shareholders of the Company


573


709
Non-controlling interests



-


1




573


710








Earnings per share 
7






Basic



24.3p


30.0p
Diluted



24.2p


29.7p
Adjusted basic



20.9p


22.8p
Adjusted diluted



20.8p


22.6p
The proposed final dividend for the year ended 31 January 2015, subject to approval by shareholders at the Annual General Meeting, is 6.85p per share.


Consolidated statement of comprehensive income
Year ended 31 January 2015



 millions
Notes
2014/15
2013/14
Profit for the year

573
710
Actuarial gains/(losses) on post-employment benefits
9
175
(127)
Tax on items that will not be reclassified

(85)
65
Total items that will not be reclassified subsequently to profit or loss

90
(62)
Currency translation differences 



Group

(308)
(210)
Joint ventures and associates

(2)
(25)
Transferred to income statement (note 4)

-
(31)
Cash flow hedges



Fair value gains/(losses)

70
(4)
(Gains)/losses transferred to inventories

(5)
9
Tax on items that may be reclassified

(14)
2
Total items that may be reclassified subsequently to profit or loss

(259)
(259)
Other comprehensive income for the year

(169)
(321)
Total comprehensive income for the year

404
389




Attributable to:



Equity shareholders of the Company

403
388
Non-controlling interests

1
1


404
389


Consolidated statement of changes in equity
Year ended 31 January 2015


Attributable to equity shareholders of the Company

 millions
Share capital
Share
premium
Own shares held
Retained earnings
Other reserves
Total
Non-controlling interests
Total equity
At 2 February 2014

373
2,209
(35)
3,495
266
6,308
9
6,317
Profit for the year

-
-
-
573
-
573
-
573
Other comprehensive income for the year

-
-
-
90
(260)
(170)
1
(169)
Total comprehensive income for the year

-
-
-
663
(260)
403
1
404
Share-based compensation

-
-
-
11
-
11
-
11
New shares issued under share schemes

1
5
-
-
-
6
-
6
Own shares issued under share schemes

-
-
26
(24)
-
2
-
2
Purchase of own shares for cancellation

(5)
-
-
(150)
5
(150)
-
(150)
Purchase of own shares for ESOP trust

-
-
(17)
-
-
(17)
-
(17)
Dividends

-
-
-
(334)
-
(334)
-
(334)
At 31 January 2015

369
2,214
(26)
3,661
11
6,229
10
6,239










At 3 February 2013

373
2,204
(60)
3,106
525
6,148
8
6,156
Profit for the year

-
-
-
709
-
709
1
710
Other comprehensive income for the year

-
-
-
(62)
(259)
(321)
-
(321)
Total comprehensive income for the year

-
-
-
647
(259)
388
1
389
Share-based compensation

-
-
-
7
-
7
-
7
New shares issued under share schemes

-
5
-
-
-
5
-
5
Own shares issued under share schemes

-
-
49
(41)
-
8
-
8
Purchase of own shares for ESOP trust

-
-
(24)
-
-
(24)
-
(24)
Dividends

-
-
-
(224)
-
(224)
-
(224)
At 1 February 2014

373
2,209
(35)
3,495
266
6,308
9
6,317


Consolidated balance sheet



At 31 January 2015







 millions
Notes
2014/15
2013/14
Non-current assets



Goodwill

2,414
2,417
Other intangible assets

258
222
Property, plant and equipment

3,203
3,625
Investment property

30
50
Investments in joint ventures and associates

28
32
Post-employment benefits
9
194
-
Deferred tax assets

10
12
Derivative assets

52
40
Other receivables

7
15


6,196
6,413
Current assets



Inventories

2,021
2,054
Trade and other receivables

537
590
Derivative assets

70
5
Current tax assets

6
15
Short-term deposits

48
-
Cash and cash equivalents

561
535
Assets held for sale

274
208


3,517
3,407
Total assets

9,713
9,820




Current liabilities



Trade and other payables

(2,323)
(2,486)
Borrowings

(105)
(94)
Derivative liabilities

(10)
(27)
Current tax liabilities

(87)
(175)
Provisions

(13)
(8)
Liabilities held for sale

(195)
-


(2,733)
(2,790)
Non-current liabilities



Other payables

(64)
(86)
Borrowings

(232)
(230)
Deferred tax liabilities

(329)
(251)
Provisions

(34)
(46)
Post-employment benefits
9
(82)
(100)


(741)
(713)
Total liabilities

(3,474)
(3,503)




Net assets

6,239
6,317




Equity



Share capital

369
373
Share premium

2,214
2,209
Own shares held in ESOP trust

(26)
(35)
Retained earnings

3,661
3,495
Other reserves

11
266
Total attributable to equity shareholders of the Company

6,229
6,308
Non-controlling interests

10
9
Total equity

6,239
6,317
The financial statements were approved by the Board of Directors on 30 March 2015 and signed on its behalf by:
Vronique Laury   Karen Witts
Chief Executive Officer   Chief Financial Officer


Consolidated cash flow statement

Year ended 31 January 2015



 millions
Notes
2014/15
2013/14
Operating activities 



Cash generated by operations
10
806
976
Income tax paid

(146)
(142)
Net cash flows from operating activities

660
834




Investing activities 



Purchase of businesses, net of cash acquired

-
(28)
Disposal of Hornbach

198
-
Disposal of China (deposit received)

12
-
Purchase of property, plant and equipment, investment property and intangible assets

(275)
(304)
Disposal of property, plant and equipment, investment property and intangible assets

50
12
Increase in short-term deposits

(48)
-
Interest received

5
8
Dividends received from joint ventures and associates

7
11
Net cash flows from investing activities

(51)
(301)




Financing activities 



Interest paid

(10)
(12)
Interest element of finance lease rental payments

(3)
(4)
Repayment of bank loans

(2)
(89)
Repayment of Medium Term Notes and other fixed term debt

(73)
(33)
(Payment)/receipt on financing derivatives

(9)
6
Capital element of finance lease rental payments 

(14)
(13)
New shares issued under share schemes 

6
5
Own shares issued under share schemes

2
8
Purchase of own shares for ESOP trust 

(17)
(24)
Purchase of own shares for cancellation

(100)
-
Special dividends paid to equity shareholders of the Company

(100)
-
Ordinary dividends paid to equity shareholders of the Company

(234)
(224)
Net cash flows from financing activities

(554)
(380)




Net increase in cash and cash equivalents and bank overdrafts

55
153
Cash and cash equivalents and bank overdrafts at beginning of year

534
398
Exchange differences 

(62)
(17)
Cash and cash equivalents and bank overdrafts, including amounts classified
as held for sale, at end of year

527
534
Cash and cash equivalents classified as held for sale (China)

(57)
-
Cash and cash equivalents and bank overdrafts at end of year
11
470
534


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, continental Europe and China. 
The Company is incorporated in the United Kingdom. The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.
The Company is listed on the London Stock Exchange.
2 Basis of preparation
The consolidated financial statements of the Company, its subsidiaries, joint ventures and associates are made up to the nearest Saturday to 31 January each year. The current financial year is the 52 weeks ended 31 January 2015 ('the year' or '2014/15'). The comparative financial year is the 52 weeks ended 1 February 2014 ('the prior year' or '2013/14'). 
The directors of Kingfisher plc, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 January 2015.
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 52 weeks ended 31 January 2015, but are derived from those statements. Statutory financial statements for 2013/14 have been filed with the Registrar of Companies and those for 2014/15 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 2014/15 statutory financial statements, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS') and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and therefore the consolidated financial statements comply with Article 4 of the EU IAS legislation. The consolidated income statement and related notes represent results for continuing operations, there being no discontinued operations in the periods 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.
Accounting policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 1 February 2014, as described in note 2 of those financial statements.
There are no standards, amendments to standards or interpretations that are both mandatory for the first time for the financial year ending 31 January 2015 and which have a material impact on the Group's results.


Principal rates of exchange


2014/15

2013/14

Average rate
Year end rate
Average rate
Year end rate
Euro
1.25
1.33
1.18
1.22
US Dollar
1.64
1.50
1.57
1.64
Polish Zloty
5.23
5.57
4.95
5.17
Russian Rouble
66.70
105.58
50.49
57.81
Chinese Renminbi
10.11
9.39
9.62
9.97
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, effective tax rate, adjusted earnings and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These and other non-GAAP measures such as net debt/cash are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items', 'adjusted', 'effective tax rate' and 'net debt/cash' 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 (principally the costs of the Group's head office), exceptional items, amortisation of acquisition intangibles and the Group's share of interest and tax of joint ventures and associates. 2013/14 comparatives have been restated to exclude the share of Hornbach operating profit.
The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group's underlying business performance. The principal items which are included as exceptional items are:
 non-trading items included in operating profit such as profits and losses on the disposal, closure or impairment of subsidiaries, joint ventures, associates and investments which do not form part of the Group's trading activities;
 profits and losses on the disposal of properties and impairment losses on non-operational assets; and
 the costs of significant restructuring and incremental acquisition integration costs.
The term 'adjusted' refers to the relevant measure being reported for continuing operations excluding exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and prior year tax items (including the impact of changes in tax rates on deferred tax). 2013/14 comparatives have been restated to exclude the share of Hornbach results. Financing fair value remeasurements represent 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 hedge relationships. Financing derivatives are those that relate to underlying items of a financing nature.
The effective tax rate represents the effective income tax expense as a percentage of continuing profit before taxation excluding exceptional items. Effective income tax expense is the continuing income tax expense excluding tax on exceptional items and tax adjustments in respect of prior years and the impact of changes in tax rates on deferred tax.
Net debt/cash comprises borrowings and financing derivatives (excluding accrued interest), less cash and cash equivalents and short-term deposits. It excludes balances classified as assets and liabilities held for sale.
Prior year restatement
The following non-GAAP measures have been restated in the comparatives to exclude the contribution of Hornbach, in order to improve comparability following its disposal in the current year:


2013/14 
 millions



Before restatement
Restatement
After restatement
Retail profit - Group



805
(26)
779
Retail profit - Other International



171
(26)
145
Adjusted pre-tax profit



744
(14)
730
Adjusted earnings



552
(14)
538
Adjusted basic earnings per share



23.4p
(0.6)p
22.8p
Adjusted diluted earnings per share



23.2p
(0.6)p
22.6p
There was no contribution from Hornbach to the current year adjusted (non-GAAP) results. Statutory (GAAP) measures have not been restated.


3 Segmental analysis
Income statement 

2014/15
 millions
UK & Ireland
France
Other International
Total
Poland
Other
Sales
4,600
4,132
1,055
1,179
10,966
Retail profit 
276
349
118
(10)
733
Central costs




(40)
Share of interest and tax of joint ventures and associates




(6)
Exceptional items




(35)
Operating profit




652
Net finance costs




(8)
Profit before taxation




644

2013/14
(restated - note 2)
 millions
UK & Ireland
France
Other International
Total
Poland
Other
Sales
4,363
4,423
1,109
1,230
11,125
Retail profit 
238
396
123
22
779
Central costs




(42)
Share of interest and tax of joint ventures and associates




(5)
Share of Hornbach operating profit




26
Share of Hornbach interest and tax




(12)
Exceptional items




(10)
Operating profit




736
Net finance income (including 27m exceptional credit)




23
Profit before taxation




759
The operating segments disclosed above are based on the information reported internally to the Board of Directors and Group Executive. This information is predominantly based on the geographical areas in which the Group operates and which are managed separately. The Group only has one business segment being the supply of home improvement products and services.
The 'Other International' segment consists of Poland, China, Germany, Portugal, Romania, Russia, Spain and the joint venture Kotas in Turkey. Poland has been shown separately due to its significance.
Central costs principally comprise the costs of the Group's head office.


4 Exceptional items 
 millions
2014/15
2013/14
Included within selling and distribution expenses


UK & Ireland restructuring
(17)
7
Transaction costs
(15)
(5)

(32)
2
Included within other income


Disposal of properties and non-operational asset losses
(3)
2

(3)
2
Included within share of post-tax results of joint ventures and associates


Net impairment of investment in Hornbach
-
(14)

-
(14)
Included within finance income


Kesa demerger French tax case - repayment supplement income
-
27

-
27
Exceptional items before tax
(35)
17
Exceptional tax items 
106
114
Exceptional items
71
131
Current year exceptional items include a 17m restructuring charge in the UK relating to the transformation of B&Q, driven by productivity initiatives aimed at delivering a simpler, more efficient business with a lower cost operating model. 
The prior year exceptional credit of 7m reflected the release of provisions that had been recorded in January 2013 when B&Q Ireland entered into an Examinership process, which it successfully exited in May 2013 with the closure of only one store.
Current year transaction costs of 15m have been incurred, including costs relating to Mr Bricolage and the agreement to sell a controlling stake in the B&Q China business (2013/14: 5m principally related to Bricostore Romania).
There is a net charge of 3m relating to the disposal of properties and impairment of non-operational assets (2013/14: 2m profit).
A net impairment loss of 14m was recognised in the prior year on the Group's investment in Hornbach. This comprised a loss of 45m on remeasurement of the investment to fair value, offset by a 31m gain on the transfer from reserves of cumulative foreign exchange gains since transition to IFRS.
The current year exceptional tax credit of 106m includes the tax impact on exceptional items and the release of prior year provisions, which have either been agreed with the tax authorities, reassessed, or time expired.
In the prior year there was an exceptional tax credit of 114m, which included 118m taxation provision releases related to the successful resolution of the Kesa demerger French tax case. A 27m repayment supplement provision release was also recognised in relation to this case.


5 Net finance (costs)/income
 millions
2014/15
2013/14 
Bank overdrafts and bank loans
(7)
(3)
Medium Term Notes and other fixed term debt
(3)
(3)
Finance leases
(3)
(4)
Financing fair value remeasurements
4
(2)
Unwinding of discount on provisions
(1)
-
Net interest expense on defined benefit pension schemes
(3)
-
Finance costs 
(13)
(12)



Cash and cash equivalents and short-term deposits
5
6
Net interest income on defined benefit pension schemes
-
2
Kesa demerger French tax case - repayment supplement income (note 4)
-
27
Finance income 
5
35



Net finance (costs)/income
(8)
23
6 Income tax expense
 millions
2014/15
2013/14
Current tax


Current tax on profits for the year
184
178
Other adjustments in respect of prior years
(102)
(136)

82
42
Deferred tax


Current year
(12)
16
Adjustments in respect of changes in tax rates
1
(9)

(11)
7



Income tax expense
71
49
The effective rate of tax on profit before exceptional items and excluding prior year tax adjustments and the impact of changes in tax rates on deferred tax is 27% (2013/14: 26%). Exceptional tax items for the year amount to a credit of 106m, 95m of which relates to prior year items. In 2013/14 exceptional tax items amounted to a credit of 114m, with 118m relating to prior year items.


7 Earnings per share


2014/15

2013/14
(restated - note 2)

Earnings
Weighted
average
number
of shares 
Earnings per share
Earnings
Weighted
average
number
of shares 
Earnings per share

 millions
millions
pence
 millions
millions
pence
Basic earnings per share
573
2,358
24.3
709
2,363
30.0
Effect of dilutive share options

11
(0.1)

19
(0.3)
Diluted earnings per share
573
2,369
24.2
709
2,382
29.7







Basic earnings per share
573
2,358
24.3
709
2,363
30.0
Share of Hornbach post-tax results
-

-
(14)

(0.6)
Exceptional items before tax
35

1.5
(17)

(0.7)
Tax on exceptional and prior year items
(112)

(4.8)
(141)

(6.0)
Financing fair value remeasurements
(4)

(0.2)
2

0.1
Tax on financing fair value remeasurements
1

0.1
(1)

-
Adjusted basic earnings per share
493
2,358
20.9
538
2,363
22.8







Diluted earnings per share
573
2,369
24.2
709
2,382
29.7
Share of Hornbach post-tax results
-

-
(14)

(0.6)
Exceptional items before tax
35

1.5
(17)

(0.7)
Tax on exceptional and prior year items
(112)

(4.8)
(141)

(5.9)
Financing fair value remeasurements
(4)

(0.2)
2

0.1
Tax on financing fair value remeasurements
1

0.1
(1)

-
Adjusted diluted earnings per share
493
2,369
20.8
538
2,382
22.6
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, excluding those held in the Employee Share Ownership Plan Trust ('ESOP') 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.
8 Dividends 
 millions
2014/15
2013/14
Dividends to equity shareholders of the Company


Special interim dividend of 4.2p per share paid 25 July 2014
100
-
Ordinary interim dividend for the year ended 31 January 2015 of 3.15p per share (1 February 2014: 3.12p per share)
75
74
Ordinary final dividend for the year ended 1 February 2014 of 6.78p per share (2 February 2013: 6.37p per share)
159
150

334
224
The proposed final dividend for the year ended 31 January 2015of 6.85p per share is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability.


9 Post-employment benefits

2014/15
2013/14
 millions
UK
Overseas
Total
UK
Overseas
Total
Net (deficit)/surplus in schemes
at beginning of year
(29)
(71)
(100)
71
(71)
-
Current service cost
(2)
(7)
(9)
(2)
(7)
(9)
Administration costs
(3)
-
(3)
(3)
-
(3)
Curtailment gain
-
9
9
-
-
-
Net interest (expense)/income
(1)
(2)
(3)
4
(2)
2
Net actuarial gains /(losses)
194
(19)
175
(131)
4
(127)
Contributions paid by employer
35
1
36
32
1
33
Exchange differences
-
7
7
-
4
4
Net surplus/(deficit) in schemes at end of year
194
(82)
112
(29)
(71)
(100)







Present value of defined benefit obligations
(2,606)
(97)
(2,703)
(2,135)
(92)
(2,227)
Fair value of scheme assets
2,800
15
2,815
2,106
21
2,127
Net surplus/(deficit) in schemes
194
(82)
112
(29)
(71)
(100)
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 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 to that of the scheme liabilities. The principal financial assumptions for the UK scheme are as follows:
Annual % rate
2014/15
2013/14
Discount rate
3.0
4.4
Price inflation
2.8
3.3
Rate of pension increases
2.7
3.1
For the UK scheme, the mortality assumptions used in the actuarial valuations have been selected with regard to the characteristics and experience of the membership of the scheme from 2010 to 2013. The assumptions for life expectancy of UK scheme members are as follows:
Years

2014/15
2013/14
Age to which current pensioners are expected to live (60 now)



- Male

86.7
86.7
- Female 

87.3
87.3
Age to which future pensioners are expected to live (60 in 15 years' time)



- Male

87.4
87.4
- Female

88.6
88.6
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 0.1%
Decrease/increase by 53m
Price inflation
Increase/decrease by 0.1%
Increase/decrease by 46m
Rate of pension increases
Increase/decrease by 0.1%
Increase/decrease by 47m
Mortality
Increase in life expectancy by one year
Increase by 94m 


10 Cash generated by operations
 millions
2014/15
2013/14
Operating profit
652
736
Share of post-tax results of joint ventures and associates
(5)
(8)
Depreciation and amortisation 
262
261
Impairment losses
30
2
(Profit)/loss on disposal of property, plant and equipment, investment property and intangible assets
(20)
1
Share-based compensation charge
11
7
Increase in inventories
(150)
(31)
Decrease/(increase) in trade and other receivables
12
(60)
Increase in trade and other payables
53
118
Movement in provisions
(6)
(29)
Movement in post employment benefits
(33)
(21)
Cash generated by operations
806
976
11 Net cash
 millions
2014/15
2013/14
Cash and cash equivalents
561
535
Bank overdrafts
(91)
(1)
Cash and cash equivalents and bank overdrafts
470
534
Short-term deposits
48
-
Bank loans
(11)
(14)
Medium Term Notes and other fixed term debt
(183)
(247)
Financing derivatives
57
27
Finance leases
(52)
(62)
Net cash
329
238



 millions
2014/15
2013/14
Net cash at beginning of year
238
38
Net increase in cash and cash equivalents and bank overdrafts
55
153
Increase in short-term deposits
48
-
Repayment of bank loans
2
89
Repayment of Medium Term Notes and other fixed term debt 
73
33
Payment/(receipt) on financing derivatives
9
(6)
Capital element of finance lease rental payments 
14
13
Cash flow movement in net cash
201
282
Borrowings acquired
-
(35)
Transfers to assets held for sale (China)
(57)
-
Exchange differences and other non-cash movements
(53)
(47)
Net cash at end of year
329
238
12 Acquisitions and disposals
On 23 July 2014 Kingfisher entered into a binding agreement with the principal shareholders of Mr Bricolage to acquire their shareholdings subject to satisfactory French anti-trust clearance. This agreement made provision that it would lapse if the anti-trust clearance was not obtained by 31 March 2015 and an extension was not agreed by all parties. Subsequent to the balance sheet date, it has become clear that the anti-trust clearance will not be obtained by 31 March 2015 and therefore the July 2014 agreement will lapse on that date. Consequently the transaction will not proceed.
In the prior year, the Group acquired 100% of the share capital of the Bricostore Romania companies for cash consideration of 35m (along with a non-cash element of 16m) and acquired cash of 7m and borrowings of 35m.
The Group received proceeds of 236m (198m) following the disposal of its 21% stake in Hornbach in March 2014.
On 22 December 2014, Kingfisher announced a binding agreement to sell a controlling 70% stake in its B&Q China business to Wumei Holdings Inc for a total cash consideration of 140 million. The agreement followed Kingfisher's previous announcement of its plans to look for a strategic partner to help develop its B&Q business in China. The transaction is conditional on MOFCOM (Chinese Ministry of Commerce) approval and, if approved, is expected to close during the first half of Kingfisher's 2015/16 financial year. On completion, a 12m deposit received in the current year would be repaid. As part of the terms of the transaction, Kingfisher would have the option following the second anniversary of the completion of the transaction, or sooner where agreed by both parties, to sell the remaining 30% economic interest to Wumei Holdings Inc for a fixed price of the Sterling equivalent of RMB 582m (62m at year end exchange rate).
Following the announcement the B&Q China business' assets and liabilities were classified as a disposal group held for sale.

This information is provided by RNS
The company news service from the London Stock Exchange
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