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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kingfisher Plc | LSE:KGF | London | Ordinary Share | GB0033195214 | ORD 15 5/7P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.20 | 0.08% | 247.30 | 247.20 | 247.30 | 249.80 | 247.20 | 248.50 | 771,139 | 12:25:04 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Misc General Mdse Stores | 12.98B | 345M | 0.1819 | 13.60 | 4.69B |
TIDMKGF
RNS Number : 8685C
Kingfisher PLC
20 April 2017
21 April 2017
KINGFISHER PLC
(the "Company")
Annual Report and Accounts
In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Listing Authority and will shortly be available for inspection via the National Store Mechanism at www.hemscott.com/nsm.do
-- Annual Report and Accounts for the year ended 31 January 2017 (the "2016/17 Annual Report")
-- Notice of Annual General Meeting 2017
-- Proxy Form in respect of the Annual General Meeting 2017
The above documents have also been posted or otherwise made available to shareholders. The 2016/17 Annual Report and the Notice of Annual General Meeting 2017 have also been published on the Company's website at www.kingfisher.com/investors.
Additional Information required by Disclosure and Transparency Rule 6.3.5
In compliance with DTR 6.3.5, the following information is extracted from the 2016/17 Annual Report and should be read in conjunction with the Company's Final Results announcement for the year ended 31 January 2017 issued on 22 March 2017. Both documents are available at www.kingfisher.com and together constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. Page and note references in the text refer to page numbers and notes contained in the 2016/17 Annual Report. This announcement is not a substitute for reading the 2016/17 Annual Report in full.
1. Principal Risk Factors
RISK MANAGEMENT
Given the scale of our businesses, the Board of Directors recognises that the nature, scope and potential impact of our business and strategic risks is subject to constant change. As such, the Board has implemented the necessary framework to ensure that it has sufficient visibility of the principal risks and the opportunity to regularly review the adequacy and effectiveness of our mitigating controls and strategies.
OUR APPROACH TO RISK MANAGEMENT
To Identify Our Risks, we start with our strategic pillars and consider what might stop us achieving our ONE Kingfisher plan. The process is therefore looking at the risks we face within our strategic planning period. The approach combines a top-down strategic company-level view and a bottom-up operational view of the risks at Operating Company and functional level. Meetings are held with our Operating Company leadership teams and functional leaders to identify the risks within the operations. To identify our principal risks, discussions are held with the Group Executive and non-executive directors. The information from the operational assessments is also considered to arrive at our principal risks. The table below shows how the principal risks link to the strategic pillars.
To Assess Our Risks, we consider the potential financial, reputational, regulatory or operational impact and probability that the risk may materialise. This helps us to assess the level of control we need to put in place. For each of the principal risks, we have included an assessment of the change in risk from last year. This assessment is based on the external environment, the company's operations, and the impact of the controls in place. We have considered whether the risk is increasing, decreasing or remains unchanged.
To Manage Our Risks, ownership is assigned at all levels. The Operating Company leadership team owns and is responsible for managing its own risks. Each leadership team is responsible for putting appropriate controls in place and procedures to ensure that the controls are operating effectively. The same procedure is followed for our principal risks.
To ensure we effectively Monitor Our Risks, the principal risks are reviewed by the Group Executive and Board twice a year. Changes to the principal risks and mitigation strategies are considered as part of this review. During the year, the Audit Committee reviews the risk assessment process and receives presentations from some of the Operating Companies.
These presentations include the risk assessment for the Operating Company enabling the Audit Committee to monitor the risks and level of control in place. Internal Audit also considers the risks at Operating Company and Group level when developing the internal audit plan.
THIS YEAR'S UPDATE
Having followed the process set out above, and in light of a strategy that remains unchanged, we have made no material changes to our principal risks.
However, as part of this year's risk assessment, we did consider the impact of the result of the EU referendum on our principal risks. We have established a Brexit working group to monitor developments and to keep under review our principal risks and mitigations. Whilst the principal risks currently remain unchanged, we recognise that Brexit may impact the level of risk we face and this has been reflected in the statements made regarding the change in risk.
During the year, the Board has also considered the nature and level of risk that we are prepared to accept to deliver our business strategies, and has reviewed and approved our internal statement of risk appetite. This describes desired levels of acceptable risk, supported by high level qualitative risk statements, ensuring that risks are proactively managed to the level agreed by the Board.
The Corporate Governance report on page 52 gives further details on our governance processes.
OUR PRINCIPAL RISKS
The Board considers that the principal risks to achieving its strategic aims are set out on the following pages.
1. ORGANISATION OF THE 2. UNIFYING OUR OFFER COMPANY & PROCESSES ----------------------------------------------------------------------- ---------------------------------------------------------------------- Organising Kingfisher We fail to deliver the as a more unified company benefits of a more unified with a unified customer and unique offer and offer, rather than a standardised activities collection of individual and processes. businesses, fails to deliver the anticipated benefits. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- - Unified & Unique Offer - Unified & Unique Offer ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed ----------------------------------------------------------------------- ---------------------------------------------------------------------- Decreasing. We believe Increasing. As this project our risk exposure has progresses the level decreased since last of ranges impacted is year. Progress has been increasing and our risk made on the organisational exposure increases. design and we have a coordinated plan in place, with a series of planned changes. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Monthly tracking against key strategic milestones in * Teams with specialised roles to develop and take the place. best practice and the best products from across the company. * Monthly reporting to the plc Board, Group Executive, Operating Company Chief Executives and Finance * Strong project management process in place, including Directors. capturing lessons learned for continuous improvement. * Programme of strategic updates to the Group Executive * Monthly tracking and review by the Offer & Supply and the Board planned during the year. Chain board to identify and respond to potential risks. * Regular meetings with the Operating Company Chief Executives to monitor progress, ensure buy in and * Validation and governance processes in place for resolve potential issues. business case approvals of range and procurement decisions. * A new process has been introduced to deliver the transformational change, including tracking alignment, * Clearly defined range and purchasing standards,
dependencies and expectations. principles and methodology with guidance and support from expert leads. * Performance of the ranges and brands is tracked and strategies updated accordingly. * A strong sourcing network which is focused on securing company buying opportunities. * Group implementation task force in place to steer the aspects of 1) merchandising solutions, 2) store implementation, 3) stock clearance, 4) supply and logistics. * Vendor management process in place which includes vendor selection, risk assessments, monitoring of vendor responses, and communication. * Systems and data improvements have been identified and are part of the unified IT platform implementation. ----------------------------------------------------------------------- ---------------------------------------------------------------------- 3. PRICE COMPETITIVENESS 4. SUSTAINABILITY DELIVERY ----------------------------------------------------------------------- ---------------------------------------------------------------------- A lack of actual or perceived We fail to deliver our price competitiveness, sustainability targets particularly when compared due to not integrating to more discount-based our sustainability plan or online competitors, into the day-to-day operations would affect our ability of the business. to maintain market share or may result in a loss of market share. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- - Unified & Unique Offer - Unified & Unique Offer ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed ----------------------------------------------------------------------- ---------------------------------------------------------------------- Increasing. This continues No change. While the to be a key area of focus risk exposure in this for us. This is an area area continues to increase of increasing risk as with our changing operations we continue to review and increased legislation, our ranges. We are taking we continue to take steps the necessary steps to to mitigate this and stabilise and reduce we feel that this results this risk. in the risk remaining unchanged. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * A new pricing strategy and governance has been * Governance is overseen by the Group Sustainability decided, where Offer & Supply Chain now sets Committee, a sub-committee of the Group Executive. recommended prices on all unified ranges, securing the best selling price whilst protecting margin. * Capacity building and sharing of best practice e.g. annual network meetings of Operating Company * Regular pricing studies undertaken with regards to sustainability teams supported by monthly WebEx the market and price positioning aligned with meetings. competition. * Advice from expert partners. * Investment in pricing to reinforce and communicate our value credentials. * Engagement with external stakeholders to identify and mitigate sustainability risks. * Developing improved customer insight and analytical tools to optimise product ranging and pricing strategies. * Regular review of company positions and policies to support the sustainability strategy. * More targeted use of online and mass media tools to communicate and reinforce price perception. * Annual monitoring and reporting of sustainability Key Performance Indicators (KPIs) and progress against targets to the Group Executive. * Ongoing work towards sustainability targets within Operating Companies, with annual progress reports signed off at Board level. * Development of sustainability plans and responsibilities within unified buying functions including Offer & Supply Chain (procurement of goods for resale) and Group Purchasing team (procurement of Goods Not For Resale). ----------------------------------------------------------------------- ---------------------------------------------------------------------- 5. DIGITAL AND FORMAT 6. INVESTMENT VALUE ----------------------------------------------------------------------- ---------------------------------------------------------------------- We fail to create a culture Our investments fail of innovation in our to deliver value to the offer, format and digital company. channels to stimulate consumer spend and deliver the desired sales growth. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Operational Efficiency * Unified & Unique Offer * Digital * Retail Operations ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed
----------------------------------------------------------------------- ---------------------------------------------------------------------- No change. We are exposed No change. We do not to risk in this area, believe that our risk particularly in failing exposure has increased to keep pace within the from last year, We continue digital area, however, to invest significant we feel the steps we capital expenditure in have continued to take line with our transformation this year have ensured plan and our controls that we are better positioned have been enhanced in to fulfil our digital this area. ambitions. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Digital strategy developed for the Group. * On-going assessment of opportunities for expansion, in terms of both online and bricks and mortar retail, across all the territories and regions in which we * Digital priorities programmes underway, Brilliant operate. Basics and customer journeys. * Regular updates are given to the leadership team and * Digital Forum in place to develop and deliver a all decisions are approved in line with our unified strategy for the Group. investment methodology. * Plans in place for a digital centre of excellence and * Country and market entry strategies are based on the digital delivery, roles, skills and knowledge have application of a proven operating model and supported been defined, resource recruitment underway. by the part of the business with the most relevant experience, capabilities and capacity to successfully lead a market entry strategy. * The 'Easier' unified IT programme is being rolled out across the Group to provide the systems and capabilities required to deliver the foundations for * Proposed acquisition or market entry strategies are the digital strategy. subject to challenge and due diligence from both the leadership team and specialist functions. * Trial stores identified and guiding principles for these stores being developed. * Due diligence exercises are supported by external and independent advisers when necessary. * Group Concept Director appointed. * Following an acquisition, integration plans are prepared and monitored at Operating Company and * Retail concepts and common and unique customer company levels. experience being developed. * Existing management teams are supplemented with company resources to monitor and assist with the integration. * All investments are evaluated and monitored via our post-investment review methodology in place across the business. * The financial performance of investments is monitored ensuring early corrective action can be taken if needed. ----------------------------------------------------------------------- ---------------------------------------------------------------------- 7. TECHNOLOGY DELIVERY 8. EFFICIENCY SAVINGS ----------------------------------------------------------------------- ---------------------------------------------------------------------- Our unified IT platform We fail to identify and fails to deliver the maximise potential cost requirements in line reductions and efficiency with the plan needed savings. to enable/support the delivery of the company strategy. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Operational Efficiency * Digital ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed ----------------------------------------------------------------------- ---------------------------------------------------------------------- Increasing. The implementation No change. The project within B&Q is nearing targets were based on completion and the roll-out an initial number of is commencing in the estimated savings. A remainder of our Operating plan is now in place Companies. Whilst we to deliver these savings. have confidence in the solution and our roll-out process, the risk is increased for us as more of the estate is exposed to the implementation. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Change control procedure in place with the leadership * Each Operating Company reviews its cost base and team having final approval on all functional changes. identifies potential savings as part of the planning process. * The roll-out plan avoids a 'big bang' implementation approach, instead gradual increments are implemented * Identified savings are monitored as part of the over a short period, ensuring dual running kept to a budgeting and forecasting processes. minimum and allowing any issues to be identified and resolved before moving on. * As part of our investment in IT we have identified a number of benefits and benchmarked these externally. * Process in place to establish learning points and to ensure these are built into future roll outs. * One of our strategic pillars is Optimising our Operational Efficiency which is driven by our Goods * Agile ways of working are already in place and are Not For Resale opportunity. Specific controls in thi
currently being enhanced. s area are as follows: * A new process has been introduced to deliver the transformational change, including tracking alignment, o A project team is in dependencies and expectations. place to review categories of spend across the company and not only identify * Existing partners have skills that can support our cost savings but also needs in this area. opportunities to work in a more effective way. o Project teams are supported * Retaining knowledge by ensuring the colleagues who by a Steering Group whose established the template are involved in the responsibilities include programme through the central team or via the local monitoring plans, milestones roll-out. and the financial impact for each category. o Initial review committed * Applications are being provided in accordance with to delivery of targets our proposed three-tier architecture, which provides over the first three flexibility to areas where innovative ideas are most years. Year 1 has delivered likely, tools are typically agnostic and therefore earlier than plan, we can be interchanged in the event this is required. have plans in place to deliver Year 2 and Year 3 is now being planned. * Digital IT team is integrated within the overall IT o Regular reporting and function with common release management and review against budget operations in place. targets and forecast. o Procurement Excellence Programme launched to optimise key processes within the procurement function. ----------------------------------------------------------------------- ---------------------------------------------------------------------- 9. INVESTING IN OUR PEOPLE 10. HEALTH & SAFETY ----------------------------------------------------------------------- ---------------------------------------------------------------------- We do not make the necessary We fail to maintain a investment in our people safe environment for to ensure that we have our customers and store the appropriate capacity, colleagues, which results skills and experience. in a major incident or fatality that is directly attributable to a failure in our Health & Safety management systems. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Retail Operations * Unified & Unique Offer * Digital * Operational Efficiency * Retail Operations ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed ----------------------------------------------------------------------- ---------------------------------------------------------------------- No change. We continue No change. Our Safety to monitor and manage network is embedded in this risk closely. While the business and continues the risk exposure is to work with the Operating significant, we have Companies to ensure our a clear understanding minimum standards are of the scale of the change maintained during the and plans in place to transformation. deliver the model. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * The Chief People Officer is leading the work to * The Board reviews and challenges Health & Safety improve our capabilities, ensuring we have effective performance, standards and targets across our KPIs and relevant reward structures. Operating Companies. * Work is underway to redesign, where required, HR * Group Health and Safety Committee sets the policy and processes, policies and guidelines to ensure they are standards for the company. fit for purpose and in line with our ambition. Initial focus will be on recruitment, reward, talent and engagement. * Group Minimum Safety Standards with detailed guidance for identified risks are in place across the Operating Companies. * Remuneration Committee oversees the reward policy. * Dedicated Safety team and responsible Director in * Reviewing our engagement methodology to ensure we each of our Operating Companies to ensure the Health have an appropriate and timely engagement methodology & Safety policy is implemented and communicated. which enables us to check across all staff our ability to drive the changes we need whilst being able to respond to any insights which may impact upon * The Group Safety Officer monitors compliance and our duty of care as an employer. provides help and support to the Operating Companies. * Creating a strong pipeline of developing talent * Compliance is monitored across our Operating through structured programmes including graduate and Companies through a programme of self-certification high potential schemes e.g. LEAD programme and Health & Safety audits, with issues reported (Leadership Exploration and Development) for the through local Audit Committees and escalated to the development of senior leaders. leadership team, Group Audit Committee or Board where necessary. * Nomination Committee oversees the Board composition and succession planning. * Continue to invest in development activities for our store- based colleagues and in how we support and recognise the role of our customer advisors across the organisation. ----------------------------------------------------------------------- ----------------------------------------------------------------------
10. REPUTATION 11. MACRO-ECONOMIC FACTORS ----------------------------------------------------------------------- ---------------------------------------------------------------------- Kingfisher's reputation Uncertainty surrounding and brand are affected the resilience of the by a major environmental global economy and increased or ethical failure, major geo-political volatility, corporate issue or crisis, may impact both consumer a significant corporate confidence and the long-term fraud or material non- sustainability and capabilities compliance with legislative of our supplier base. or regulatory requirements resulting in punitive or custodial procedures. ----------------------------------------------------------------------- ---------------------------------------------------------------------- Strategic Pillar Strategic Pillar ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Retail Operations * Retail Operations ----------------------------------------------------------------------- ---------------------------------------------------------------------- How our risks have changed How our risks have changed ----------------------------------------------------------------------- ---------------------------------------------------------------------- No change. There is a Increasing. This is an potential for the risk area of increasing risk. to increase in this area There are still a number as we go forward with of uncertainties relating our transformation, however, to the UK's exit from we are putting procedures the EU and heightened in place to mitigate geopolitical tensions this risk and therefore in some of our markets. believe there is no change in the risk. ----------------------------------------------------------------------- ---------------------------------------------------------------------- How we manage and monitor How we manage and monitor the risk the risk ----------------------------------------------------------------------- ---------------------------------------------------------------------- * Both employees and suppliers working for or with * The provision of supply chain finance programmes to Kingfisher must conduct themselves according to our support suppliers. minimum standards of ethics and behaviours as defined by our Code of Conduct. * Portfolio of international banking partners that provide flexibility, access to funding and reliable * Responsibility for compliance with our Code of local retail cash and card payment processing Conduct rests with each Operating Company Chief services. Executive. * Diversification of cash holdings across a number of * Appropriate resources are available to our Operating financial institutions with the strongest short-term Companies to ensure that both colleagues and credit rating. suppliers are aware of, and comply with, the Code. * An appropriate and prudent mix of hedging policies, * Legal teams in Group and each of our Operating cash deposits and debt financing to minimise the Companies work and communicate together to form a impact of foreign exchange currency volatility on the legal compliance network. company. * Communications teams at Kingfisher and each of our * Government Affairs team actively monitors the Operating Companies work together to form a political and economic situations in the countries in communications network. which we operate or may impact our operations. * Policies and procedures in place to support the * Strategies in place to identify, monitor and aim to environmental, ethical, fraud, crisis management, influence changes to legislation which may impact the legislative and regulatory areas. Specifically; business. o Competition law compliance * The Government Affairs team oversees direct policy messaging and training. and political engagement with dedicated resource in o Working group in place the UK, France, Belgium, Poland and Russia, supported to manage and oversee by local representatives in our Operating Companies the new European and and our membership of key business trade associations Russian Data Protection in every market. legal requirements. o Anti-bribery training in place and all key * Actively monitoring the Brexit process via the individuals must complete Government Affairs team, Treasury, Finance and Tax this training. teams alongside UK and French Operating Companies. o Whistleblowing hotline throughout the Group and all calls are followed * Work has begun to consider the implications of Brexit, up, including monitoring including presenting high level implications of this at the local Audit Committee to the Board. As the situation becomes clearer and level. the mechanics of an exit are known, more detailed o Disclosure policy and plans will be prepared. training in place. ----------------------------------------------------------------------- ---------------------------------------------------------------------- 2. Details of Related Party Transactions
During the year, the Company and its subsidiaries carried out a number of transactions with related parties in the normal course of business and on an arm's length basis. The names of the related parties, the nature of these transactions and their total value are shown below:
2016/17 2015/16 ------------------------------ -------------------- -------------------- GBPmillions Income Receivable Income Receivable ------------------------------ ------- ----------- ------- ----------- Transactions with Koçtas Yapi Marketleri Ticaret A.S. in which the Group holds a 50% interest Commission and other income 1.0 0.4 1.2 0.1 ------------------------------ ------- ----------- ------- ----------- Transactions with Crealfi S.A. in which the Group holds a 49% interest 0.1 - 0.1 - Provision of employee services 6.4 0.3 5.7 0.3 Commission and other income ------------------------------ ------- ----------- ------- ----------- Transactions with Kingfisher Pension Scheme Provision of administrative services 1.3 0.1 1.2 0.1 ------------------------------ ------- ----------- ------- -----------
Services are usually negotiated with related parties on a cost-plus basis. Goods are sold or bought on the basis of the price lists in force with non-related parties.
The remuneration of key management personnel is disclosed in note 8.
Other transactions with the Kingfisher Pension Scheme are disclosed in note 27.
3. Directors' Statement of Responsibility
The directors confirm that to the best of their knowledge:
- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;
- the strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face; and
- the Annual Report and financial statements, taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's performance, business model and strategy.
Paul Moore, Group Company Secretary
Tel: +44 (0)207 644 1041
Kingfisher plc
3 Sheldon Square, London W2 6PX
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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April 21, 2017 05:55 ET (09:55 GMT)
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