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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 | |
---|---|---|---|---|---|---|---|---|---|---|
1.80 | 0.73% | 247.80 | 247.70 | 247.90 | 248.50 | 244.90 | 248.50 | 641,987 | 12:06:26 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Misc General Mdse Stores | 13.06B | 471M | 0.2483 | 9.96 | 4.69B |
TIDMKGF
RNS Number : 1429A
Kingfisher PLC
22 March 2017
KINGFISHER PLC
Consolidated income statement Year ended 31 January 2017 2016/17 2015/16 ----------- ----------- ------- --------------------------------- Before Exceptional Before Exceptional exceptional items exceptional items GBP millions Notes Items (note 4) Total items (note 4) Total ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- ------- Sales 3 11,225 - 11,225 10,441 - 10,441 Cost of sales (7,050) - (7,050) (6,545) - (6,545) ----------- ----------- ------- Gross profit 4,175 - 4,175 3,896 - 3,896 Selling and distribution expenses (2,758) 21 (2,737) (2,666) (308) (2,974) Administrative expenses (687) (5) (692) (567) (15) (582) Other income 19 7 26 26 157 183 Share of post-tax results of joint ventures and associates 1 - 1 3 - 3 Operating profit 750 23 773 692 (166) 526 Finance costs (21) (6) (27) (22) - (22) Finance income 13 - 13 8 - 8 ----------- ----------- ------- Net finance costs 5 (8) (6) (14) (14) - (14) Profit before taxation 742 17 759 678 (166) 512 Income tax expense 6 (143) (6) (149) (167) 67 (100) ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- ------- Profit for the year 599 11 610 511 (99) 412 ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- ------- Earnings per share 7 Basic 27.1p 17.8p Diluted 27.0p 17.8p Adjusted basic 24.4p 22.0p Adjusted diluted 24.3p 22.0p Underlying basic 25.9p 22.0p Underlying diluted 25.8p 22.0p ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- ------- Reconciliation of non-GAAP underlying and adjusted pre-tax profit: --------------------------------------------------------------------------------------------------------------- Underlying pre-tax profit 787 686 Transformation costs before exceptional items (44) - ------------------------------------------------------ ----------- ------- ----------- ----------- ------- Adjusted pre-tax profit 743 686 B&Q China operating loss - (4) Financing fair value remeasurements (1) (4) Exceptional items 17 (166) ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- ------- Profit before taxation 759 512 ---------------------------------- ----- ----------- ----------- ------- ----------- ----------- -------
The proposed final dividend for the year ended 31 January 2017, subject to approval by shareholders at the Annual General Meeting, is 7.15p per share.
Consolidated statement of comprehensive income Year ended 31 January 2017 GBP millions Notes 2016/17 2015/16 -------------------------------------------------------------------------- ------ -------- -------- Profit for the year 610 412 -------------------------------------------------------------------------- ------ -------- Actuarial (losses)/gains on post-employment benefits 9 (50) 19 Tax on items that will not be reclassified 11 (8) -------------------------------------------------------------------------- ------ -------- Total items that will not be reclassified subsequently to profit or loss (39) 11 -------------------------------------------------------------------------- ------ -------- Currency translation differences Group 390 1 Joint ventures and associates (1) (3) Transferred to income statement - (7) Cash flow hedges Fair value gains 52 24 Gains transferred to inventories (60) (50) Available-for-sale financial assets Fair value gains 5 2 Transferred to income statement 12 (7) - Tax on items that may be reclassified 2 8 -------------------------------------------------------------------------- ------ -------- -------- Total items that may be reclassified subsequently to profit or loss 381 (25) -------------------------------------------------------------------------- ------ -------- -------- Other comprehensive income for the year 342 (14) -------------------------------------------------------------------------- ------ -------- -------- Total comprehensive income for the year 952 398 -------------------------------------------------------------------------- ------ -------- -------- Consolidated statement of changes in equity Year ended 31 January 2017 Attributable to equity shareholders of the Company Own Non- Share Share shares Retained Other controlling Total GBP millions Notes capital premium held earnings reserves Total interests equity --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- At 1 February 2016 361 2,218 (24) 3,637 (6) 6,186 - 6,186 --------------- -------- Profit for the year - - - 610 - 610 - 610 Other comprehensive income for the year - - - (39) 381 342 - 342 --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- Total comprehensive income for the year - - - 571 381 952 - 952 Share-based compensation - - - 15 - 15 - 15 New shares issued under share schemes - 3 - - - 3 - 3 Own shares issued under share schemes - - 7 (6) - 1 - 1 Purchase of own shares for cancellation (9) - - (150) 9 (150) - (150) Purchase of own shares for ESOP trust - - (6) - - (6) - (6) Dividends 8 - - - (230) - (230) - (230) --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- At 31 January
2017 352 2,221 (23) 3,837 384 6,771 - 6,771 --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- At 1 February 2015 369 2,214 (26) 3,652 11 6,220 10 6,230 --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- Profit for the year - - - 412 - 412 - 412 Other comprehensive income for the year - - - 11 (25) (14) - (14) --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- Total comprehensive income for the year - - - 423 (25) 398 - 398 Disposal of B&Q China 12 - - - - - - (10) (10) Share-based compensation - - - 11 - 11 - 11 New shares issued under share schemes - 4 - - - 4 - 4 Own shares issued under share schemes - - 18 (17) - 1 - 1 Purchase of own shares for cancellation (8) - - (200) 8 (200) - (200) Purchase of own shares for ESOP trust - - (16) - - (16) - (16) Dividends 8 - - - (232) - (232) - (232) At 31 January 2016 361 2,218 (24) 3,637 (6) 6,186 - 6,186 --------------- -------- ---------- ---------- --------- ---------- ---------- ------ ------------ ---------- Consolidated balance sheet At 31 January 2017 GBP millions Notes 2016/17 2015/16 ---------------------------------------------- ------ -------- -------- Non-current assets Goodwill 2,399 2,397 Other intangible assets 308 276 Property, plant and equipment 3,589 3,212 Investment property 24 25 Investments in joint ventures and associates 23 23 B&Q China investment 12 - 62 Post-employment benefits 9 239 246 Deferred tax assets 28 11 Derivative assets 54 43 Other receivables 8 7 ---------------------------------------------- ------ -------- 6,672 6,302 Current assets Inventories 2,173 1,957 Trade and other receivables 551 568 Derivative assets 36 56 Current tax assets 6 5 Short-term deposits - 70 Cash and cash equivalents 795 730 Assets held for sale - 6 ---------------------------------------------- ------ -------- 3,561 3,392 ---------------------------------------------- ------ -------- -------- Total assets 10,233 9,694 Current liabilities Trade and other payables (2,495) (2,369) Borrowings (14) (138) Derivative liabilities (26) (6) Current tax liabilities (141) (66) Provisions (63) (69) (2,739) (2,648) Non-current liabilities Other payables (50) (53) Borrowings (184) (179) Deferred tax liabilities (282) (333) Provisions (99) (208) Post-employment benefits 9 (108) (87) ---------------------------------------------- ------ -------- -------- (723) (860) ---------------------------------------------- ------ -------- -------- Total liabilities (3,462) (3,508) Net assets 6,771 6,186 ---------------------------------------------- ------ -------- -------- Equity Share capital 352 361 Share premium 2,221 2,218 Own shares held in ESOP trust (23) (24) Retained earnings 3,837 3,637 Other reserves 384 (6) ---------------------------------------------- ------ -------- -------- Total equity 6,771 6,186 ---------------------------------------------- ------ -------- --------
The financial statements were approved by the Board of Directors on 21 March 2017 and signed on its behalf by:
Véronique Laury Karen Witts Chief Executive Officer Chief Financial Officer Consolidated cash flow statement Year ended 31 January 2017 GBP millions Notes 2016/17 2015/16 ------------------------------------------------------------------------------------ ------ --------- --------- Operating activities Cash generated by operations 10 925 931 Income tax paid (144) (118) --------- Net cash flows from operating activities 781 813 Investing activities Purchase of property, plant and equipment and intangible assets (406) (333) Disposal of property, plant and equipment, investment property and property held for sale 20 25 Disposal of property company 12 - 18 Disposal of B&Q China: 12 Proceeds (net of costs and cash disposed) 63 102 Deposit repaid - (12) Decrease/(increase) in short-term deposits 70 (22) Interest received 5 3 Dividends received from joint ventures and associates - 5 ------------------------------------------------------------------------------------ ------ --------- --------- Net cash flows from investing activities (248) (214) Financing activities Interest paid (10) (12) Interest element of finance lease rental payments (2) (3) Repayment of bank loans (2) (1) Repayment of fixed term debt (47) - Receipt on financing derivatives 10 - Capital element of finance lease rental payments (12) (13) New shares issued under share schemes 3 4 Own shares issued under share schemes 1 1 Purchase of own shares for ESOP trust (6) (16) Purchase of own shares for cancellation (200) (200) Ordinary dividends paid to equity shareholders of the Company (230) (232) Net cash flows from financing activities (495) (472)
Net increase in cash and cash equivalents and bank overdrafts, including amounts classified as held for sale 38 127 Cash and cash equivalents and bank overdrafts, including amounts classified as held for sale, at beginning of year 654 527 Exchange differences 103 - Cash and cash equivalents and bank overdrafts at end of year 11 795 654 ------------------------------------------------------------------------------------ ------ --------- ---------
Notes
1 General information
Kingfisher plc ('the Company'), its subsidiaries, joint ventures and associates (together 'the Group') supply home improvement products and services through a network of retail stores and other channels, located mainly in the United Kingdom and continental Europe.
The Company is incorporated in the United Kingdom and is listed on the London Stock Exchange. The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.
2 Basis of preparation
The consolidated financial statements of the Company, its subsidiaries, joint ventures and associates are made up to 31 January. The current financial year is the calendar year ended 31 January 2017 ('the year' or '2016/17'). The comparative financial year is the calendar year ended 31 January 2016 ('the prior year' or '2015/16').
The directors of Kingfisher plc, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence and that, therefore, it is appropriate to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 January 2017.
The condensed financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated balance sheet, consolidated cash flow statement and related notes do not constitute statutory financial statements for the year ended 31 January 2017, but are derived from those statements. Statutory financial statements for 2015/16 have been filed with the Registrar of Companies and those for 2016/17 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 2016/17 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 years presented. The condensed financial information has been prepared under the historical cost convention, as modified by the use of valuations for certain financial instruments, share-based payments and post-employment benefits.
Accounting policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 January 2016, as described in note 2 of those financial statements.
Principal rates of exchange against Sterling
2016/17 2015/16 -------- --------- -------- --------- Average Year end Average Year end rate rate rate rate ---------------- -------- --------- -------- --------- Euro 1.21 1.16 1.38 1.31 US Dollar 1.34 1.26 1.52 1.42 Polish Zloty 5.28 5.03 5.78 5.78 Russian Rouble 87.98 75.72 94.54 107.52 ---------------- -------- --------- -------- ---------
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 adjusted sales, retail profit, underlying pre-tax profit, adjusted pre-tax profit, effective tax rate, underlying earnings per share and adjusted earnings per share provide additional useful information on performance and trends to shareholders. These and other non-GAAP measures, such as net cash, are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items', 'transformation costs', 'underlying', 'adjusted', 'effective tax rate' and 'net 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, the Group's share of interest and tax of joint ventures and associates, transformation costs, exceptional items and amortisation of acquisition intangibles. It includes the sustainable benefits of the Group's transformation programme. 2015/16 comparatives exclude B&Q China's operating results. Central costs principally comprise the costs of the Group's head office before transformation costs.
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 ongoing 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, including certain restructuring costs of the Group's five-year transformation programme launched in 2016/17, 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). 2015/16 comparatives exclude B&Q China's operating 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 hedged items of a financing nature.
The term 'underlying' refers to the relevant adjusted measure being reported before non-exceptional transformation costs. Non-exceptional transformation costs represent the short-term additional costs that arise only as a result of the transformation programme launched in 2016/17, which either because of their nature or the length of the period over which they are incurred are not considered as exceptional items. These costs principally relate to the unified and unique offer range implementation and the digital strategic initiative. The separate reporting of such costs (in addition to exceptional items) helps provide an indication of the Group's underlying business performance, which includes the sustainable benefits of the transformation programme.
The effective tax rate is calculated as continuing income tax expense excluding tax on exceptional items and adjustments in respect of prior years and the impact of changes in tax rates on deferred tax, divided by continuing profit before taxation excluding exceptional items.
Net cash comprises cash and cash equivalents and short-term deposits less borrowings and financing derivatives (excluding accrued interest). It excludes balances classified as assets and liabilities held for sale.
3 Segmental analysis
Income statement
2016/17 --------------------------------------------------------- Other International ----------------------------------------------------------- ------------- ------- ---------------------- ------- GBP millions UK & Ireland France Poland Other Total ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Adjusted sales 4,979 4,254 1,191 801 11,225 B&Q China sales - ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Sales 11,225 ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Retail profit 358 353 144 (8) 847
Central costs (48) Share of interest and tax of joint ventures and associates (5) Transformation costs before exceptional items (44) Exceptional items 23 Operating profit 773 Net finance costs (14) ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Profit before taxation 759 ----------------------------------------------------------- ------------- ------- ----------- --------- ------- 2015/16 --------------------------------------------------------- Other International ----------------------------------------------------------- ------------- ------- ---------------------- ------- GBP millions UK & Ireland France Poland Other Total ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Adjusted sales 4,853 3,786 987 705 10,331 ----------------------------------------------------------- ------------- ------- ----------- --------- ------- B&Q China sales 110 ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Sales 10,441 ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Retail profit 326 311 113 (4) 746 Central costs (45) Share of interest and tax of joint ventures and associates (5) B&Q China operating loss (4) Exceptional items (166) Operating profit 526 Net finance costs (14) ----------------------------------------------------------- ------------- ------- ----------- --------- ------- Profit before taxation 512 ----------------------------------------------------------- ------------- ------- ----------- --------- -------
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 business segment being the supply of home improvement products and services.
The 'Other International' segment consists of Poland, Spain, Portugal, Germany, Russia, Romania and the joint venture Koçta in Turkey. Poland has been shown separately due to its significance.
Central costs principally comprise the costs of the Group's head office before transformation costs.
4 Exceptional items GBP millions 2016/17 2015/16 ---------------------------------------------------- -------- -------- Included within selling and distribution expenses UK & Ireland and continental Europe restructuring 21 (305) Brico Dépôt Romania impairment - (3) 21 (308) ---------------------------------------------------- -------- -------- Included within administrative expenses Transformation exceptional costs (5) - Brico Dépôt Romania impairment - (15) (5) (15) ---------------------------------------------------- -------- -------- Included within other income Profit on disposal of B&Q China 3 143 Profit on disposal of property and other companies - 13 Profit on disposal of properties 4 1 ---------------------------------------------------- -------- -------- 7 157 ---------------------------------------------------- -------- -------- Included within net finance costs UK & Ireland and continental Europe restructuring (6) - ---------------------------------------------------- -------- -------- (6) - ---------------------------------------------------- -------- -------- Exceptional items before tax 17 (166) Exceptional tax items (6) 67 Exceptional items 11 (99) ---------------------------------------------------- -------- --------
Current year exceptional items include a GBP21m net credit (2015/16: GBP305m charge) relating to the B&Q store closure programme in the UK and the closure of loss-making stores in France and other countries in continental Europe. In addition, a GBP6m exceptional interest charge relating to the reduction in discount rate used to measure the overall UK restructuring provision was recognised.
The net credit principally arises due to savings on B&Q store exit costs as compared with the original restructuring provisions recognised, and the reversal of a restructuring provision following the announcement that one of the B&Q stores originally earmarked for closure would remain open, offset mainly by store asset impairments relating to the closure of additional loss-making stores in continental Europe.
Transformation exceptional costs of GBP5m have been recorded in the year relating to the initial costs of setting up the Group's new offer and supply chain organisation.
A profit of GBP3m was recognised on disposal of the Group's remaining 30% stake in B&Q China - refer to note 12 for further information. In the prior year a profit of GBP143m was recorded on disposal of the Group's controlling 70% stake.
In the prior year, an exceptional loss of GBP18m was recorded relating to the impairment of goodwill and certain stores in the Brico Dépôt Romania business.
5 Net finance costs GBP millions 2016/17 2015/16 -------------------------------------------------------- -------- -------- Bank overdrafts and bank loans (10) (8) Fixed term debt (2) (3) Finance leases (2) (3) Financing fair value remeasurements (1) (4) Unwinding of discount on provisions (7) (1) Other interest payable (5) (3) Finance costs (27) (22) -------------------------------------------------------- -------- -------- Cash and cash equivalents and short-term deposits 6 3 Net interest income on defined benefit pension schemes 7 5 Finance income 13 8 -------------------------------------------------------- -------- -------- Net finance costs (14) (14) -------------------------------------------------------- -------- --------
The GBP7m charge relating to the unwinding of discount on provisions includes a GBP6m exceptional charge relating to the reduction in discount rate used to measure the overall UK restructuring provision.
6 Income tax expense GBP millions 2016/17 2015/16 ---------------------------------------------------------------- -------- -------- UK corporation tax Current tax on profits for the year (66) (7) Adjustments in respect of prior years 10 4 (56) (3) ---------------------------------------------------------------- -------- -------- Overseas tax Current tax on profits for the year (155) (117) Adjustments in respect of prior years (11) 7 ---------------------------------------------------------------- -------- -------- (166) (110) ---------------------------------------------------------------- -------- -------- Deferred tax
Current year 22 14 Adjustments in respect of prior years and changes in tax rates 51 (1) 73 13 ---------------------------------------------------------------- -------- -------- Income tax expense (149) (100) ---------------------------------------------------------------- -------- --------
The effective tax rate on profit before exceptional items and excluding prior year tax adjustments and the impact of changes in tax rates on deferred tax is 26% (2015/16: 26%). Exceptional tax items for the year amount to a charge of GBP6m, of which a GBP1m credit relates to prior year items. In 2015/16 exceptional tax items amounted to a credit of GBP67m, of which a GBP1m credit was relating to prior year items.
7 Earnings per share 2016/17 2015/16 ------------- -------------------------------- ------------- -------------------------------- Weighted Weighted average average number Earnings per number Earnings per Earnings of shares share Earnings of shares share GBP millions millions Pence GBP millions millions pence -------------------- ------------- ----------- ------------------- ------------- ----------- ------------------- Basic earnings per share 610 2,256 27.1 412 2,311 17.8 Effect of dilutive share options 7 (0.1) 8 - -------------------- ------------- ----------- ------------------- Diluted earnings per share 610 2,263 27.0 412 2,319 17.8 -------------------- ------------- ----------- ------------------- ------------- ----------- ------------------- Basic earnings per share 610 2,256 27.1 412 2,311 17.8 B&Q China operating loss - - 4 0.2 Exceptional items before tax (17) (0.8) 166 7.2 Tax on exceptional and prior year items (43) (2.0) (76) (3.3) Financing fair value remeasurements 1 0.1 4 0.2 Tax on financing fair value remeasurements - - (1) (0.1) -------------------- ------------- ----------- ------------------- Adjusted basic earnings per share 551 2,256 24.4 509 2,311 22.0 Transformation costs before exceptional items 44 2.0 - - Tax on transformation costs before exceptional items (11) (0.5) - - -------------------- ------------- ----------- ------------------- ------------- ----------- ------------------- Underlying basic earnings per share 584 2,256 25.9 509 2,311 22.0 -------------------- ------------- ----------- ------------------- ------------- ----------- ------------------- Diluted earnings per share 610 2,263 27.0 412 2,319 17.8 B&Q China operating loss - - 4 0.2 Exceptional items before tax (17) (0.8) 166 7.2 Tax on exceptional and prior year items (43) (2.0) (76) (3.3) Financing fair value remeasurements 1 0.1 4 0.2 Tax on financing fair value remeasurements - - (1) (0.1) -------------------- ------------- ----------- ------------------- Adjusted diluted earnings per share 551 2,263 24.3 509 2,319 22.0 Transformation costs before exceptional items 44 2.0 - - Tax on transformation costs before exceptional items (11) (0.5) - - -------------------- ------------- ----------- ------------------- ------------- ----------- ------------------- Underlying diluted earnings per share 584 2,263 25.8 509 2,319 22.0 -------------------- ------------- ----------- ------------------- ------------- ----------- -------------------
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 GBP millions 2016/17 2015/16 --------------------------------------------------------------------------------- -------- -------- Dividends to equity shareholders of the Company Ordinary interim dividend for the year ended 31 January 2017 of 3.25p per share (year ended 31 January 2016: 3.18p per share) 73 72 Ordinary final dividend for the year ended 31 January 2016 of 6.92p per share (year ended 31 January 2015: 6.85p per share) 157 160 230 232 --------------------------------------------------------------------------------- -------- --------
The proposed final dividend for the year ended 31 January 2017 of 7.15p per share is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in the financial statements.
9 Post-employment benefits 2016/17 2015/16 ----------------------------- ----------------------------- GBP millions UK Overseas Total UK Overseas Total -------- --------- -------- -------- --------- -------- Net surplus/(deficit) in schemes at beginning of year 246 (87) 159 194 (82) 112 Current service cost (2) (7) (9) (2) (6) (8) Administration costs (4) - (4) (4) - (4) Net interest income/(expense) 9 (2) 7 6 (1) 5 Net actuarial (losses)/gains (46) (4) (50) 16 3 19 Contributions paid by employer 36 2 38 36 1 37 Exchange differences - (10) (10) - (2) (2) ------------------------------------------------- -------- --------- -------- -------- --------- -------- Net surplus/(deficit) in schemes at end of year 239 (108) 131 246 (87) 159 ------------------------------------------------- -------- --------- -------- -------- --------- -------- Present value of defined benefit obligations (2,999) (126) (3,125) (2,374) (102) (2,476) Fair value of scheme assets 3,238 18 3,256 2,620 15 2,635 ------------------------------------------------- -------- --------- -------- -------- --------- -------- Net surplus/(deficit) in schemes 239 (108) 131 246 (87) 159
------------------------------------------------- -------- --------- -------- -------- --------- --------
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 as that of the scheme liabilities.
The principal financial assumptions for the UK scheme are as follows:
Annual % rate 2016/17 2015/16 ----------------- -------- -------- Discount rate 2.7 3.6 Price inflation 3.6 3.1 ----------------- -------- --------
For the UK scheme, the mortality assumptions used have been selected with regard to the characteristics and experience of the membership of the scheme from time to time in connection with triennial funding valuations. The assumptions for life expectancy of UK scheme members are as follows:
Years 2016/17 2015/16 --------------------------------- --- -------- -------- Age to which current pensioners are expected to live (60 now) - Male 87.1 86.8 - Female 88.8 87.4 Age to which future pensioners are expected to live (60 in 15 years' time) - Male 88.3 87.5 - Female 90.7 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.
Impact on defined Assumption Change in assumption benefit obligation ---------------- ---------------------------- -------------------- Increase/decrease Decrease/increase Discount rate by 0.1% by GBP57m Increase/decrease Increase/decrease Price inflation by 0.1% by GBP46m Increase in life expectancy Mortality by one year Increase by GBP96m ---------------- ---------------------------- -------------------- 10 Cash generated by operations GBP millions 2016/17 2015/16 ---------------------------------------------------------------------------- -------- -------- Operating profit 773 526 Share of post-tax results of joint ventures and associates (1) (3) Depreciation and amortisation 253 240 Impairment losses 14 55 Loss on disposal of property, plant and equipment, investment property and property held for sale 4 3 Profit on disposal of B&Q China (3) (143) Profit on disposal of property and other companies - (13) Share-based compensation charge 15 11 (Increase)/decrease in inventories (46) 56 Decrease/(increase) in trade and other receivables 62 (36) Increase in trade and other payables 4 27 Movement in provisions (125) 233 Movement in post-employment benefits (25) (25) ---------------------------------------------------------------------------- -------- -------- Cash generated by operations 925 931 ---------------------------------------------------------------------------- -------- -------- 11 Net cash GBP millions 2016/17 2015/16 -------------------------------------------------------------------------- -------- -------- Cash and cash equivalents 795 730 Bank overdrafts - (76) -------------------------------------------------------------------------- -------- -------- Cash and cash equivalents and bank overdrafts 795 654 Short-term deposits - 70 Bank loans (9) (10) Fixed term debt (147) (185) Financing derivatives 44 63 Finance leases (42) (46) Net cash 641 546 -------------------------------------------------------------------------- -------- -------- GBP millions 2016/17 2015/16 -------------------------------------------------------------------------- -------- -------- Net cash at beginning of year 546 329 -------------------------------------------------------------------------- -------- -------- Net increase in cash and cash equivalents and bank overdrafts, including amounts classified as held for sale 38 127 (Decrease)/increase in short term deposits (70) 22 Repayment of bank loans 2 1 Repayment of fixed term debt 47 - Receipt on financing derivatives (10) - Capital element of finance lease rental payments 12 13 -------------------------------------------------------------------------- -------- -------- Cash flow movement in net cash 19 163 Adjustment for cash classified as held for sale (B&Q China) - 57 Exchange differences and other non-cash movements 76 (3) Net cash at end of year 641 546 -------------------------------------------------------------------------- -------- -------- 12 Disposals
On 5 July 2016, the Group disposed of its remaining 30% interest in the B&Q China business to Wumei Holdings Inc. for a gross consideration of GBP67m, being the Sterling equivalent of RMB 582m. The profit on disposal of GBP3m is analysed as follows:
GBP millions -------------------------------------------------------------- ----- Proceeds 67 Disposal costs (4) --------------------------------------------------------------- ----- Net disposal proceeds 63 Fair value of investment disposed (67) Fair value gains transferred from available-for-sale reserve 7 --------------------------------------------------------------- ----- Exceptional profit on disposal 3 --------------------------------------------------------------- -----
In the prior year, the Group received gross proceeds of GBP140m (before disposal costs of GBP6m) and recognised a profit on disposal of GBP143m in respect of Wumei Holdings Inc. acquiring a controlling 70% stake in the B&Q China business. In the prior year, the Group also completed the sale of a property company for proceeds of GBP18m and a profit of GBP16m, along with the sale of a UK company for proceeds of GBPnil and a loss of GBP3m.
This information is provided by RNS
The company news service from the London Stock Exchange
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