TIDMKGF
RNS Number : 3748M
Kingfisher PLC
21 September 2021
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
Half year ended 31 July 2021 Half year ended 31 July 2020
-------------------------------------------- --------------------------------------------
Before Adjusting items Before Adjusting items
GBP millions Notes adjusting items (note 5) Total adjusting items (note 5) Total
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
Sales 4 7,101 - 7,101 5,921 - 5,921
Cost of sales (4,404) - (4,404) (3,735) - (3,735)
---------------- -------- ---------------- --------
Gross profit 2,697 - 2,697 2,186 - 2,186
Selling and
distribution
expenses (1,554) - (1,554) (1,302) (27) (1,329)
Administrative
expenses (417) 7 (410) (390) 10 (380)
Other income 12 1 13 11 - 11
Share of
post-tax
results of
joint ventures
and associates 1 - 1 (2) - (2)
Operating
profit 4 739 8 747 503 (17) 486
Finance costs (76) - (76) (94) - (94)
Finance income 6 - 6 6 - 6
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
Net finance
costs 6 (70) - (70) (88) - (88)
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
Profit before
taxation 669 8 677 415 (17) 398
Income tax
expense 8 (144) 23 (121) (98) 17 (81)
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
Profit for the
period 525 31 556 317 - 317
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
Earnings per
share 9
Basic 26.4p 15.1p
Diluted 26.2p 15.0p
Adjusted basic 24.9p 15.1p
Adjusted
diluted 24.7p 15.0p
---------------- ------ ---------------- ---------------- -------- ---------------- ---------------- --------
The proposed interim ordinary dividend for the period ended 31
July 2021 is 3.80p per share (2020/21: 2.75p per share).
The Group no longer uses the term 'exceptional adjusting items'
within its Alternative Performance Measure definitions, with the
term 'adjusting items' now judged to be more appropriate. As a
result, the previous columnar presentation in the consolidated
income statement has been revised to include all 'adjusting items',
including prior year tax items. Refer to note 2.
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED INCOME STATEMENT
Year ended 31 January 2021
---------------------------------------
Adjusting
Before adjusting items
GBP millions Notes items (note 5) Total
---------------------------------------------------- -------- ----------------- ---------- --------
Sales 4 12,343 - 12,343
Cost of sales (7,770) - (7,770)
Gross profit 4,573 - 4,573
Selling and distribution expenses (2,843) 12 (2,831)
Administrative expenses (809) (6) (815)
Other income 19 13 32
Other expenses - (49) (49)
Share of post-tax results of joint ventures and associates 6 - 6
Operating profit 4 946 (30) 916
Finance costs (180) - (180)
Finance income 20 - 20
---------------------------------------------------- -------- ----------------- ---------- --------
Net finance costs 6 (160) - (160)
---------------------------------------------------- -------- ----------------- ---------- --------
Profit before taxation 786 (30) 756
Income tax expense 8 (182) 18 (164)
---------------------------------------------------- -------- ----------------- ---------- --------
Profit for the year 604 (12) 592
---------------------------------------------------- -------- ----------------- ---------- --------
Earnings per share 9
Basic 28.1p
Diluted 27.9p
Adjusted basic 28.7p
Adjusted diluted 28.5p
The Group no longer uses the term 'exceptional adjusting items'
within its Alternative Performance Measure definitions, with the
term 'adjusting items' now judged to be more appropriate. As a
result, the previous columnar presentation in the consolidated
income statement has been revised to include all 'adjusting items',
including prior year tax items. Refer to note 2.
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Half year ended Half year ended Year ended
GBP millions Notes 31 July 2021 31 July 2020 31 January 2021
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Profit for the period 556 317 592
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Remeasurements of post-employment benefits 12 (12) 195 68
Inventory cash flow hedges - fair value
gains/(losses) 6 (7) (48)
Tax on items that will not be reclassified 1 (67) (13)
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Total items that will not be reclassified
subsequently to profit or loss (5) 121 7
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Currency translation differences
Group (148) 204 112
Joint ventures and associates (2) - (2)
Transferred to income statement - - 49
Other cash flow hedges
Fair value gains 4 6 5
Gains transferred to income statement (4) (6) (5)
Total items that may be reclassified
subsequently to profit or loss (150) 204 159
-------- ---------------- ----------------
Other comprehensive (loss)/income for the
period (155) 325 166
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Total comprehensive income for the period 401 642 758
------------------------------------------- -------- ---------------- ---------------- ---------------------------
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Half year ended 31 July
2021
---------- ---------- -------- ----------- ----------------------------------
Other
Own Capital reserves
Share Share shares Retained redemption (note Total
GBP millions capital premium held earnings reserve 14) equity
--------------------------- ---------- ---------- -------- ----------- ------------ ---------- --------
At 1 February 2021 332 2,228 (23) 3,630 43 361 6,571
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Profit for the period - - - 556 - - 556
Other comprehensive loss
for the period - - - (9) - (146) (155)
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Total comprehensive income
for the period - - - 547 - (146) 401
Inventory cash flow hedges
- losses transferred to
inventories - - - - - 34 34
Share-based compensation - - - 14 - - 14
New shares issued under
share
schemes - - - 2 - - 2
Own shares issued under
share
schemes - - 11 (11) - - -
Purchase of own shares for
ESOP trust - - (29) - - - (29)
Dividends - - - (174) - - (174)
Tax on equity items - - - - - (8) (8)
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
At 31 July 2021 332 2,228 (41) 4,008 43 241 6,811
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Half year ended 31 July 2020
----------- ---------------------------------------------------------------------
Other
Own Capital reserves
Share Share shares Retained redemption (note Total
GBP millions capital premium held earnings reserve 14) equity
-------------------------- ----------- ---------- -------- ----------- ------------ ---------- --------
At 1 February 2020 332 2,228 (23) 2,994 43 228 5,802
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Profit for the period - - - 317 - - 317
Other comprehensive income
for the period - - - 126 - 199 325
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Total comprehensive income
for the period - - - 443 - 199 642
Inventory cash flow hedges
- gains transferred to
inventories - - - - - (19) (19)
Share-based compensation - - - 11 - - 11
Own shares issued under
share
schemes - - 9 (9) - - -
Tax on equity items - - - - - 6 6
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
At 31 July 2020 332 2,228 (14) 3,439 43 414 6,442
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Year ended 31 January 2021
--------- ---------------------------------------------------------------------
Other
Own Capital reserves
Share Share shares Retained redemption (note Total
GBP millions capital premium held earnings reserve 14) equity
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
At 1 February 2020 332 2,228 (23) 2,994 43 228 5,802
Profit for the year - - - 592 - - 592
Other comprehensive income
for the year - - - 44 - 122 166
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Total comprehensive income
for the year - - - 636 - 122 758
Inventory cash flow hedges
- losses transferred to
inventories - - - - - 13 13
Share-based compensation - - - 14 - - 14
New shares issued under
share
schemes - - - 1 - - 1
Own shares issued under
share
schemes - - 14 (14) - - -
Purchase of own shares for
ESOP trust - - (14) - - - (14)
Tax on equity items - - - (1) - (2) (3)
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
At 31 January 2021 332 2,228 (23) 3,630 43 361 6,571
---------------------------- --------- ---------- -------- ----------- ------------ ---------- --------
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED BALANCE SHEET
At 31 July 2020 restated (note
GBP millions Notes At 31 July 2021 2) At 31 January 2021
-------------------------------- ------ ---------------- ------------------------------- -------------------
Non-current assets
Goodwill 2,425 2,419 2,427
Other intangible assets 11 320 332 320
Property, plant and equipment 11 2,982 3,033 3,075
Investment property 11 20 20 20
Right-of-use assets 1,785 1,872 1,845
Investments in joint ventures
and associates 18 14 20
Post-employment benefits 12 506 612 504
Deferred tax assets 19 12 15
Other tax authority asset 17 64 - 57
Other receivables 26 23 29
-------------------------------- ------ ---------------- ------------------------------- -------------------
8,165 8,337 8,312
Current assets
Inventories 2,730 2,383 2,488
Trade and other receivables 317 345 290
Derivative assets 13 11 34 5
Current tax assets 23 18 20
Cash and cash equivalents 1,535 2,450 1,142
Assets held for sale 6 184 12
4,622 5,414 3,957
-------------------------------- ------ ---------------- ------------------------------- -------------------
Total assets 12,787 13,751 12,269
-------------------------------- ------ ---------------- ------------------------------- -------------------
Current liabilities
Trade and other payables (2,947) (2,774) (2,520)
Borrowings 13 (111) (1,240) (101)
Lease liabilities (333) (351) (330)
Derivative liabilities 13 (27) (49) (59)
Current tax liabilities (126) (94) (70)
Other tax authority liability 17 - - (57)
Provisions (35) (52) (46)
Liabilities directly associated
with assets held for sale - (67) -
(3,579) (4,627) (3,183)
Non-current liabilities
Other payables (11) (5) (11)
Borrowings 13 (2) (96) (2)
Lease liabilities (1,986) (2,146) (2,091)
Derivative liabilities 13 - (1) (1)
Deferred tax liabilities (231) (251) (232)
Provisions (22) (41) (33)
Post-employment benefits 12 (145) (142) (145)
(2,397) (2,682) (2,515)
-------------------------------- ------ ---------------- ------------------------------- -------------------
Total liabilities (5,976) (7,309) (5,698)
-------------------------------- ------ ---------------- ------------------------------- -------------------
Net assets 6,811 6,442 6,571
-------------------------------- ------ ---------------- ------------------------------- -------------------
Equity
Share capital 332 332 332
Share premium 2,228 2,228 2,228
Own shares held in ESOP trust (41) (14) (23)
Retained earnings 4,008 3,439 3,630
Capital redemption reserve 43 43 43
Other reserves 14 241 414 361
-------------------------------- ------ ---------------- ------------------------------- -------------------
Total equity 6,811 6,442 6,571
-------------------------------- ------ ---------------- ------------------------------- -------------------
The interim financial report was approved by the Board of
Directors on 20 September 2021 and signed on its behalf by:
Thierry Garnier, Chief Executive Bernard Bot , Chief Financial
Officer Officer
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED CASH FLOW STATEMENT
Half year ended Half year ended Year ended
GBP millions Notes 31 July 2021 31 July 2020 31 January 2021
------------------------------------------------------- ------ ---------------- ---------------- -----------------
Operating activities
Cash generated by operations 15 1,161 1,412 1,816
Income tax paid (78) (80) (166)
Other tax authority payments 17 (64) - -
---------------- ---------------- -----------------
Net cash flows from operating activities 1,019 1,332 1,650
Investing activities
Purchase of property, plant and equipment and
intangible assets (131) (87) (281)
Disposal of property, plant and equipment, investment
property, assets held for sale and intangible
assets 7 2 48
Purchase of businesses, net of cash acquired - - (8)
Disposal of businesses, net of cash disposed - - 27
Interest received 1 3 4
Interest element of lease rental receipts 1 1 2
Principal element of lease rental receipts 2 2 3
Advance payments on right-of-use assets (1) (1) (2)
Advance receipts on right-of-use assets - 2 -
Dividends received from joint ventures and associates 1 - -
Net cash flows used in investing activities (120) (78) (207)
Financing activities
Interest paid (5) (14) (26)
Interest element of lease rental payments (69) (79) (153)
Principal element of lease rental payments (177) (136) (309)
Repayment of bank loans (3) (1) (1)
Issue of fixed term debt - 1,950 1,950
Repayment of fixed term debt - (1,461) (2,011)
Receipt on financing derivatives - - 1
New shares issued under share schemes 2 - 1
Purchase of own shares for ESOP trust (29) - (14)
Ordinary dividends paid to equity shareholders of the
Company 10 (174) - -
Net cash flows from financing activities (455) 259 (562)
Net increase in cash and cash equivalents and bank
overdrafts 444 1,513 881
Cash and cash equivalents and bank overdrafts at
beginning of period 1,136 195 195
Exchange differences (64) 56 60
------------------------------------------------------- ------ ---------------- ---------------- -----------------
Cash and cash equivalents and bank overdrafts at end
of period 1,516 1,764 1,136
------------------------------------------------------- ------ ---------------- ---------------- -----------------
Cash and cash equivalents and bank overdrafts at the end of the
period include GBPnil of cash included within assets held for sale
on the balance sheet (2020/21: GBP15m). Cash and cash equivalents
and bank overdrafts at 31 January 2021 include GBPnil of cash
included within assets held for sale on the balance sheet.
Kingfisher plc
2021/22 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Kingfisher plc ('the Company'), its subsidiaries, joint ventures
and associates (together 'the Group') supply home improvement
products and services through a network of retail stores and other
channels, located mainly in the United Kingdom and continental
Europe.
The Company is incorporated in England and Wales, United
Kingdom, and is listed on the London Stock Exchange. The address of
its registered office is 3 Sheldon Square, Paddington, London W2
6PX.
The interim financial report does not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. Audited statutory accounts for the year ended 31 January 2021
were approved by the Board of Directors on 21 March 2021 and
delivered to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under sections
498(2) or (3) of the Companies Act 2006. The interim financial
report has been reviewed, not audited, and was approved by the
Board of Directors on 20 September 2021.
2. Basis of preparation
The interim financial report for the six months ended 31 July
2021 ('the half year') has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34, 'Interim Financial Reporting', as
adopted by the United Kingdom. It should be read in conjunction
with the annual financial statements for the year ended 31 January
2021, which have been prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
(IFRS Standards) adopted pursuant to Regulation (EC) No 1606/2002
as it applies in the European Union. The financial statements have
also been prepared in accordance with International Financial
Reporting Standards as issued by the IASB. The consolidated income
statement and related notes represent results for continuing
operations, there being no discontinued operations in the periods
presented. Where comparatives are given, '2020/21' refers to the
six months ended 31 July 2020.
Going concern
Based on the Group's liquidity position and cash flow
projections, including a forward looking remote downside scenario,
the Directors have a reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence for the foreseeable future and they continue to adopt the
going concern basis of accounting in preparing the condensed
consolidated financial statements for the period ended 31 July
2021.
Considering whether the Group's condensed consolidated financial
statements can be prepared on a going concern basis, the Directors
have reviewed the Group's business activities together with factors
likely to affect its performance, financial position and access to
liquidity (including consideration of financial covenants and
credit ratings).
While trading continues to be strong, in forming their outlook
on the future financial performance, the Directors considered the
normalisation of store traffic and average spend, the risk of
higher business volatility and the potential negative impact of the
general economic environment on household and trade spend.
The Directors' review also included a remote scenario to assess
the impact of more restrictive containment measures than those
experienced during the pandemic to date in the event of a more
severe wave of resurgence of the Covid-19 pandemic. The remote
scenario considers the impact of a significant drop in sales
over a period of six months followed by a period of recovery
lasting two months before trading resumes to the base case expected
forecast. The total loss of sales in this scenario is c.GBP1.6bn
(21%
over the impacted period). The scenario assumes the impact of
lost sales is partially offset by a limited set of mitigating
actions on variable and discretionary costs, capital expenditure
and the suspension of dividend payments. Even under this remote
scenario
the group retains significant headroom on its credit facilities
with only a limited drawing on the revolving credit facility (RCF)
required for a few months. Given current trading and expectations
for the business, the Directors believe that this scenario reflects
a remote outcome for the Group. Should the impact of the pandemic
be more prolonged or severe than currently forecast by the
Directors under this remote scenario, the Group would need to
implement additional operational or financial measures.
Restatement of prior periods
In the prior year, it was determined that the Group's cash and
overdraft balances within notional cash pooling arrangements
did not meet the requirements for offsetting in accordance with
IAS 32: 'Financial Instruments: Presentation' and should not
therefore be presented on a net basis on the balance sheet. For
presentational purposes, amounts at 31 July 2020 have been restated
in accordance with IAS 8: 'Accounting Policies, Changes in
Accounting Policies and Errors' with an additional GBP701m within
borrowings and cash balances increased by an equal amount. There is
no impact on net assets or net profit.
New and amended accounting standards
In April 2021, the IFRS Interpretations Committee (IFRIC) issued
a final agenda decision in relation to configuration and
customisation costs in cloud computing arrangements. The IFRIC
decision clarified that such costs would not meet the definition of
intangible assets under IAS 38, 'Intangible Assets', if they do not
give the Group the power to control the cloud-based software to
obtain the future economic benefits from the asset and to restrict
the access of others to those benefits. Given the proximity of this
decision to the interim reporting date, the Group has not had
sufficient time to amend its existing accounting policy, however
this is not expected to have a material impact on the Group's
financial statements.
Other new standards, amendments and interpretations are in issue
and effective for the Group's financial year ended 31 January
2022, but they do not have a material impact on the interim
financial report.
Principal rates of exchange against Sterling
Half year ended 31 Half year ended 31 Year ended 31 January
July 2021 July 2020 2021
--------------------- --------------------- ------------------------
Average Period end Average Period end Average Year end
rate rate rate rate rate rate
---------------- -------- ----------- -------- ----------- ----------- -----------
Euro 1.16 1.17 1.13 1.11 1.12 1.13
US Dollar 1.39 1.39 1.25 1.31 1.29 1.37
Polish Zloty 5.27 5.35 5.03 4.90 5.00 5.11
Romanian Leu 5.70 5.76 5.46 5.37 5.43 5.50
Russian Rouble n/a n/a 89.25 97.48 92.43* 103.99
---------------- -------- ----------- -------- ----------- ----------- -----------
* The Group completed the sale of Castorama Russia on 30
September 2020. The 31 January 2021 Russian Rouble average rate
relates to the period to 30 September 2020 (i.e. to the date of
disposal).
Risks and uncertainties
The principal risks and uncertainties to which the Group is
exposed are set out on pages 40-46 of the Kingfisher plc Annual
Report and Accounts for the year ended 31 January 2021. These have
been reviewed as part of the Group's half year procedures and are
listed in the Financial Review.
Use of non-GAAP measures
In the reporting of financial information, the Group uses
certain measures that are not required under IFRS, the generally
accepted
accounting principles ('GAAP') under which the Group reports.
Kingfisher believes that retail profit, adjusted pre-tax profit,
adjusted
effective tax rate, and adjusted earnings per share provide
additional useful information on performance and trends to
shareholders. These and other non-GAAP measures (also known as
'Alternative Performance Measures'), such as net debt, are used by
Kingfisher for internal performance analysis and incentive
compensation arrangements for employees. The terms 'retail profit',
'adjusting items', 'adjusted', 'adjusted effective tax rate', 'net
cashflow' and 'net debt' are not defined terms under IFRS and may
therefore not be comparable with similarly titled measures reported
by other companies. They are not intended to be a substitute for,
or superior to, GAAP measures.
Retail profit is defined as continuing operating profit before
central costs, the Group's share of interest and tax of joint
ventures and associates and adjusting items. Central costs
principally comprise the costs of the Group's head office before
adjusting items.
Adjusting items, which are presented separately within their
relevant income statement category, include items which by virtue
of their size and/or nature, do not reflect the Group's ongoing
trading performance. Adjusting items may include, but are not
limited to:
-- non-trading items included in operating profit such as
profits and losses on the disposal, closure, exit or impairment of
subsidiaries, joint ventures, associates and investments which do
not form part of the Group's ongoing trading activities;
-- the costs of significant restructuring and incremental acquisition integration costs;
-- profits and losses on the disposal of properties, impairments
of goodwill and significant impairments (or impairment reversals)
of other non-current assets;
-- prior year tax items (including the impact of changes in tax
rates on deferred tax), significant one-off tax settlements and
provision charges/releases and the tax effects of other adjusting
items;
-- financing fair value remeasurements i.e. changes in the fair
value of financing derivatives, excluding interest accruals, offset
by fair value adjustments to the carrying amount of borrowings and
other hedged items under fair value hedge relationships. Financing
derivatives are those that relate to hedged items of a financing
nature.
The term 'adjusted' refers to the relevant measure being
reported for continuing operations excluding adjusting items.
The adjusted effective tax rate is calculated as continuing
income tax expense excluding prior year tax items (including the
impact of changes in tax rates on deferred tax), significant
one-off tax settlements and provision charges/releases and the tax
effects of other adjusting items, divided by continuing profit
before taxation excluding adjusting items. Prior year tax items
represent income statement tax relating to underlying items
originally arising in prior years, including the impact of changes
in tax rates on deferred tax. The exclusion of items relating to
prior years, and those not in the ordinary course of business,
helps provide a better indication of the Group's ongoing rate of
tax.
Net debt comprises lease liabilities, borrowings and financing
derivatives (excluding accrued interest) less cash and cash
equivalents and short-term deposits, including such balances
classified as held for sale.
The Group no longer uses the term 'exceptional adjusting items'
within its Alternative Performance Measure definitions, with the
term 'adjusting items' now judged to be more appropriate given the
potential for items previously classified as 'exceptional adjusting
items' to be recurring in nature (e.g. profits and losses on the
disposal of properties). This removes the previous distinction
between 'exceptional adjusting items' and other adjusting items
(i.e. prior year tax items and financing fair value remeasurements)
from the Group's Alternative Performance Measures and simplifies
the Group's reporting of such items. As a result, the consolidated
income statement comparatives for the half year ended 31 July 2020
and year ended 31 January 2021, which previously included separate
presentation of 'exceptional adjusting items', have been
re-presented to include all 'adjusting items' (as defined above)
separately in the columnar presentation. The effect of this change
on the prior periods presented is the inclusion within the
'Adjusting items' column of those prior year tax items that were
not previously classified as 'Exceptional items' (HY 2020/21:
GBP13m credit) or 'Exceptional adjusting items' (FY 2020/21: GBP21m
credit). Financing fair value remeasurements were GBPnil in the
prior periods presented. This represents a change in terminology
and presentation only, with no impact on adjusted or statutory
performance measures. Refer to note 5.
Refer to the Financial Review for definitions of all of the
Group's Alternative Performance Measures, including further
information on why they are used and details of where
reconciliations to statutory measures can be found where
applicable.
3. Accounting policies
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31 January 2021, as
described in note 2 of those financial statements, except where set
out below. The critical accounting estimates and judgements are set
out in note 3 of the annual financial statements for the year ended
31 January 2021 and remain unchanged.
Taxes on income for interim periods are accrued using the best
estimate of the effective tax rate that would be applicable to
expected total annual earnings.
4. Segmental analysis
Income statement
Half year ended 31 July 2021
------------------------------------------------------------------
Other
GBP millions UK & Ireland France Poland Other International Total
-------------------------------------------- ------------- ------- ------- --------------- --------
Sales 3,570 2,437 743 351 1,094 7,101
-------------------------------------------- ------------- ------- ------- ------ --------------- --------
Retail profit 579 129 58 1 59 767
------- ------
Central costs (27)
Share of interest and tax of joint ventures
and associates (1)
Adjusting items 8
-------------------------------------------- ------------- ------- ------- ------ --------------- --------
Operating profit 747
Net finance costs (70)
-------------------------------------------- ------------- ------- ------- ------ --------------- --------
Profit before taxation 677
-------------------------------------------- ------------- ------- ------- ------ --------------- --------
Half year ended 31 July 2020
-----------------------------------------------------------------------
GBP millions UK & Ireland France Poland Other Other International Total
--------------------------------------- ------------- ------- ------- -------------------- --------
Sales 2,753 2,028 783 357 1,140 5,921
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Retail profit 411 63 74 (15) 59 533
------- ------
Central costs (28)
Share of interest and tax of joint
ventures and associates (2)
Adjusting items (17)
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Operating profit 486
Net finance costs (88)
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Profit before taxation 398
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Year ended 31 January 2021
-----------------------------------------------------------------------
GBP millions UK & Ireland France Poland Other Other International Total
--------------------------------------- ------------- ------- ------- -------------------- --------
Sales 5,743 4,309 1,550 741 2,291 12,343
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Retail profit 681 181 146 (5) 141 1,003
------- ------
Central costs (54)
Share of interest and tax of joint
ventures and associates (3)
Adjusting items (30)
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Operating profit 916
Net finance costs (160)
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Profit before taxation 756
--------------------------------------- ------------- ------- ------- ------ -------------------- --------
Balance sheet
At 31 July 2021
-----------------------------------------------------------------------
GBP millions UK & Ireland France Poland Other Other International Total
--------------------- ------------- ------- ------- -------------------- --------
Segment assets 2,595 1,535 918 271 1,189 5,319
------- ------
Central liabilities (25)
Goodwill 2,425
Net debt (908)
--------------------- ------------- ------- ------- ------ -------------------- --------
Net assets 6,811
--------------------- ------------- ------- ------- ------ -------------------- --------
At 31 July 2020
-----------------------------------------------------------------------
GBP millions UK & Ireland France Poland Other Other International Total
--------------------- ------------- ------- ------- -------------------- --------
Segment assets 2,722 1,553 875 399 1,274 5,549
------- ------
Central liabilities (149)
Goodwill 2,419
Net debt (1,377)
--------------------- ------------- ------- ------- ------ -------------------- --------
Net assets 6,442
--------------------- ------------- ------- ------- ------ -------------------- --------
At 31 January 2021
------------------------------------------------------------------------
GBP millions UK & Ireland France Poland Other Other International Total
--------------------- ------------- ------- ------- -------------------- ---------
Segment assets 2,774 1,686 899 303 1,202 5,662
------- ------
Central liabilities (124)
Goodwill 2,427
Net debt (1,394)
--------------------- ------------- ------- ------- ------ -------------------- ---------
Net assets 6,571
--------------------- ------------- ------- ------- ------ -------------------- ---------
The operating segments disclosed above are based on the
information reported internally to the Board of Directors and Group
Executive, representing the geographical areas in which the Group
operates. The Group only has one reportable business segment, being
the supply of home improvement products and services. The majority
of the sales in each geographical area are derived from in-store
and online sales of products.
The 'Other International' segment consists of Poland, Iberia,
Romania, the joint venture Koçta in Turkey, NeedHelp, Screwfix
International, results from franchise agreements and, in the prior
year, Russia. Poland has been shown separately due to its
significance.
Central costs principally comprise the costs of the Group's head
office. Central liabilities comprise unallocated head office and
other central items including central assets, pensions, insurance,
interest and tax.
The Group's sales, although generally not highly seasonal on a
half yearly basis, do increase over the Easter period and during
the summer months leading to slightly higher sales usually being
recognised in the first half of the year. However due to the
continued uncertainty around the impact of Covid-19 on current
trading performance, the phasing of sales is less predictable.
5. Adjusting items
Half year ended Year ended
GBP millions 31 July 2021 Half year ended 31 July 2020 31 January 2021
-------------------------------------------------- ---------------- ----------------------------- -----------------
Included within selling and distribution expenses
Impairments of Russia assets and other exit costs - (27) (27)
Net store asset impairment reversals - - 42
IT asset write-downs and related costs - - (3)
- (27) 12
-------------------------------------------------- ---------------- ----------------------------- -----------------
Included within administrative expenses
Release of France business tax liability 7 - -
Commercial operating model restructuring - - (16)
Release of B&Q China disposal warranty liability - 10 10
7 10 (6)
Included within other income/expenses
Profit on disposal of properties 1 - 13
Loss on disposal of Castorama Russia - - (49)
1 - (36)
-------------------------------------------------- ---------------- ----------------------------- -----------------
Adjusting items before tax 8 (17) (30)
Prior year and other adjusting tax items 23 17 18
-------------------------------------------------- ---------------- ----------------------------- -----------------
Adjusting items 31 - (12)
-------------------------------------------------- ---------------- ----------------------------- -----------------
A GBP7m liability that was held in relation to an uncertain tax
position in France has been released in the period. This formed
part of a liability of GBP26m that had been recorded as an
adjusting item in 2019/20.
A profit of GBP1m has been recorded on the disposal of one
property in France.
Prior year and other adjusting tax items relate principally to
the impact of the enacted future increase in the UK tax rate on
deferred tax balances. Refer to note 8.
Refer to note 5 of the 2020/21 interim accounts for further
details on adjusting items for the half year ended 31 July 2020,
and to note 5 of the 2020/21 annual accounts for further details on
adjusting items for the year ended 31 January 2021.
6. Net finance costs
Year ended
GBP millions Half year ended 31 July 2021 Half year ended 31 July 2020 31 January 2021
---------------------------------- ------------------------------ ----------------------------- -----------------
Bank overdrafts and bank loans (4) (8) (13)
Fixed term debt (2) (7) (14)
Lease liabilities (69) (79) (153)
Capitalised interest - 1 2
Other interest payable (1) (1) (2)
Finance costs (76) (94) (180)
----------------------------------- ----------------------------- ----------------------------- -----------------
Cash and cash equivalents and
short-term deposits 1 2 3
Net interest income on defined
benefit pension schemes 4 3 6
Finance lease income 1 1 2
Release of liability for interest
on uncertain tax positions - - 9
Finance income 6 6 20
----------------------------------- ----------------------------- ----------------------------- -----------------
Net finance costs (70) (88) (160)
----------------------------------- ----------------------------- ----------------------------- -----------------
7. Government grants
In the prior year, the Group announced furlough programmes to
some of our colleagues in the UK, Republic of Ireland, France,
Poland, Spain and Romania, such as the Coronavirus Job Retention
Scheme (CJRS) in the UK and 'activité partielle' relief measures in
France. Approximately 50% of the Group's colleagues were furloughed
in April 2020, reducing to c.10% by the end of May 2020 as stores
within the UK and France were reopened. With the exception of those
who were vulnerable and/or at a higher risk of infection, all
furloughed colleagues returned by 1 July 2020.
In addition, the UK government announced in March 2020 that
retail premises in England would be granted relief from paying
business rates in the 2020/21 tax year, effective from April 2020.
Similar measures (a combination of payment deferrals and relief)
were announced by the local governments and assemblies of Scotland,
Wales and Northern Ireland, as well as the Republic of Ireland.
In Q4 2020/21, the Group repaid GBP25m received in the first
half of that year under the UK and Republic of Ireland furlough
programmes and decided to repay and forego all UK and Republic
of Ireland business rates relief for the entire 2020/21 tax year.
Kingfisher's total business rates bill eligible for relief in
2020/21 was GBP105m, of which GBP42m was claimed in H1 2020/21.
Participation in these schemes lowered the operating costs of
the Group by GBP100m in the six months to 31 July 2020 and, after
repayments, by GBP45m for the year ended 31 January 2021.
Government grants in the six months to 31 July 2021 lowered the
operating costs of the Group by GBP4m.
Refer to note 33 of the 2020/21 annual accounts for further
details of government financing support received and fully repaid
in the prior year.
8. Income tax expense
Half year ended Half year ended Year ended
GBP millions 31 July 2021 31 July 2020 31 January 2021
------------------------------------------------ ---------------- ---------------- -----------------
UK corporation tax
Current tax on profits for the period (78) (81) (102)
Adjustments in respect of prior years 3 4 10
------------------------------------------------ ---------------- ---------------- -----------------
(75) (77) (92)
------------------------------------------------ ---------------- ---------------- -----------------
Overseas tax
Current tax on profits for the period (53) (13) (61)
Adjustments in respect of prior years (2) 4 5
(55) (9) (56)
------------------------------------------------ ---------------- ---------------- -----------------
Deferred tax
Current period (16) (4) (26)
Adjustments in respect of prior years - - 2
Adjustments in respect of changes in tax rates 25 9 8
9 5 (16)
------------------------------------------------ ---------------- ---------------- -----------------
Income tax expense (121) (81) (164)
------------------------------------------------ ---------------- ---------------- -----------------
The adjusted effective tax rate on profit before adjusting items
is 22% (2020/21: 24%), representing the best estimate of the
effective rate for the full financial year. The adjusted effective
tax rate on the same basis for the year ended 31 January 2021 was
23%.
The UK Budget on 3 March 2021 announced the intention to
increase the tax rate from the current rate of 19% to 25%, with
effect from April 2023. The change was substantively enacted in May
2021, with the effect of reducing the net deferred tax liability as
reported at the year end by GBP25m. This reflects an increase in
net deferred tax assets that would be expected to reverse in the
future at the new rate, with net deferred tax liabilities not
impacted by this future change in rate.
9. Earnings per share
Half year ended Year ended
Pence 31 July 2021 Half year ended 31 July 2020 31 January 2021
------------------------------------------ ---------------- ------------------------------ -----------------
Basic earnings per share 26.4 15.1 28.1
Effect of dilutive share options (0.2) (0.1) (0.2)
------------------------------------------ ---------------- ------------------------------ -----------------
Diluted earnings per share 26.2 15.0 27.9
------------------------------------------ ---------------- ------------------------------ -----------------
Basic earnings per share 26.4 15.1 28.1
Adjusting items before tax (0.4) 0.8 1.4
Prior year and other adjusting tax items (1.1) (0.8) (0.8)
------------------------------------------ ---------------- ------------------------------ -----------------
Adjusted basic earnings per share 24.9 15.1 28.7
------------------------------------------ ---------------- ------------------------------ -----------------
Diluted earnings per share 26.2 15.0 27.9
Adjusting items before tax (0.4) 0.8 1.4
Prior year and other adjusting tax items (1.1) (0.8) (0.8)
------------------------------------------ ---------------- ------------------------------ -----------------
Adjusted diluted earnings per share 24.7 15.0 28.5
------------------------------------------ ---------------- ------------------------------ -----------------
The calculation of basic and diluted earnings per share is based
on the profit for the period attributable to equity shareholders of
the Company. A reconciliation of statutory earnings to adjusted
earnings is set out below:
Year ended
GBP millions Half year ended 31 July 2021 Half year ended 31 July 2020 31 January 2021
--------------------------------- ----------------------------- ----------------------------- -----------------
Earnings 556 317 592
Adjusting items before tax (8) 17 30
Prior year and other adjusting
tax items (23) (17) (18)
--------------------------------- ----------------------------- ----------------------------- -----------------
Adjusted earnings 525 317 604
--------------------------------- ----------------------------- ----------------------------- -----------------
The weighted average number of shares in issue during the
period, excluding those held in the Employee Share Ownership Plan
Trust ('ESOP trust'), is set out below:
Half year ended Year ended
Weighted average number of shares (millions) 31 July 2021 Half year ended 31 July 2020 31 January 2021
---------------------------------------------- ---------------- ----------------------------- -----------------
Basic 2,103 2,104 2,105
Diluted 2,125 2,113 2,119
---------------------------------------------- ---------------- ----------------------------- -----------------
10. Dividends
Half year ended Half year ended Year ended
GBP millions 31 July 2021 31 July 2020 31 January 2021
---------------------------------------------------------------- ---------------- ---------------- ----------------
Dividends to equity shareholders of the Company
Ordinary interim dividend for the year ended 31 January 2021 of
2.75p per share 58 - -
Ordinary final dividend for the year ended 31 January 2021 of
5.50p per share 116 - -
---------------------------------------------------------------- ---------------- ---------------- ----------------
174 - -
---------------------------------------------------------------- ---------------- ---------------- ----------------
The proposed interim ordinary dividend for the period ended 31
July 2021 is 3.80p per share (2020/21: 2.75p per share).
11. Property, plant and equipment, investment property and other intangible assets
Additions to the cost of property, plant and equipment,
investment property and other intangible assets are GBP125m
(2020/21: GBP84m) and for the year ended 31 January 2021 were
GBP283m. Disposals in net book value of property, plant and
equipment, investment property, property assets held for sale and
other intangible assets are GBP6m (2020/21: GBP4m) and for the year
ended 31 January 2021 were GBP38m.
Capital commitments contracted but not provided for at the end
of the period are GBP64m (2020/21: GBP58m) and at 31 January 2021
were GBP38m.
12. Post-employment benefits
Half year ended Half year ended Year ended
GBP millions 31 July 2021 31 July 2020 31 January 2021
Net surplus in schemes at beginning of period 359 277 277
Current service cost (6) (6) (9)
Past service cost - - (1)
Administration costs (2) (2) (3)
Net interest income 4 3 6
Net remeasurement (losses)/gains (12) 195 68
Contributions paid by employer 13 13 29
Exchange differences 5 (10) (8)
----------------------------------------------- ---------------- ---------------- ----------------
Net surplus in schemes at end of period 361 470 359
----------------------------------------------- ---------------- ---------------- ----------------
UK 506 612 504
Overseas (145) (142) (145)
----------------------------------------- ------ ------ ------
Net surplus in schemes at end of period 361 470 359
----------------------------------------- ------ ------ ------
Present value of defined benefit obligations (3,310) (3,302) (3,257)
Fair value of scheme assets 3,671 3,772 3,616
---------------------------------------------- -------- -------- --------
Net surplus in schemes at end of period 361 470 359
---------------------------------------------- -------- -------- --------
The assumptions used in calculating the costs and obligations of
the Group's defined benefit pension schemes are set by the
Directors after consultation with independent professionally
qualified actuaries. The assumptions are based on the conditions at
the time and changes in these assumptions can lead to significant
movements in the estimated obligations, as illustrated in the
sensitivity analysis provided in note 28 of the annual financial
statements for the year ended 31 January 2021.
During the period the UK scheme purchased an annuity for GBP902m
from a major insurance company. This targeted certain pensioner
liabilities, removing the longevity risk associated with these
members. Measured against the long-term funding objective that has
been agreed between Kingfisher and the Trustee, the transaction
generated a funding improvement as well as a significant reduction
in funding risk. As the cost of the annuity of GBP902m was greater
than the IAS 19 accounting value of the corresponding liabilities,
a loss of GBP87m has been recorded in other comprehensive
income.
A key assumption in valuing the pension obligation is the
discount rate. Accounting standards require this to be set based on
market yields on high quality corporate bonds at the balance sheet
date. The UK scheme discount rate is derived using a single
equivalent discount rate approach, based on the yields available on
a portfolio of high-quality Sterling corporate bonds with the same
duration as that of the scheme liabilities.
The principal financial assumptions for the UK scheme, being the
Group's principal defined benefit scheme, are set out below:
At At At
Annual % rate 31 July 2021 31 July 2020 31 January 2021
----------------- ------------- ------------- ----------------
Discount rate 1.6 1.5 1.5
Price inflation 3.2 2.9 2.9
----------------- ------------- ------------- ----------------
13. Financial instruments
The Group holds the following derivative financial instruments
at fair value:
At At At
GBP millions 31 July 2021 31 July 2020 31 January 2021
---------------------------- ------------- ------------- ----------------
Foreign exchange contracts 11 34 5
---------------------------- ------------- ------------- ----------------
Derivative assets 11 34 5
---------------------------- ------------- ------------- ----------------
At At At
GBP millions 31 July 2021 31 July 2020 31 January 2021
------------------------------------ ------------- ------------- ----------------
Cross currency interest rate swaps (2) - (1)
Foreign exchange contracts (25) (50) (59)
------------------------------------ ------------- ------------- ----------------
Derivative liabilities (27) (50) (60)
------------------------------------ ------------- ------------- ----------------
The fair values are calculated by discounting future cash flows
arising from the instruments and adjusted for credit risk. These
fair value measurements are all made using observable market rates
of interest, foreign exchange and credit risk. All the derivatives
held by the Group at fair value are considered to have fair values
determined by level 2 inputs as defined by the fair value hierarchy
of IFRS 13, 'Fair value measurement', representing significant
observable inputs other than quoted prices in active markets for
identical assets or liabilities. There are no non-recurring fair
value measurements nor have there been any transfers of assets or
liabilities between levels of the fair value hierarchy.
Except as detailed in the following table of borrowings, the
carrying amounts of financial instruments (excluding lease
liabilities) recorded at amortised cost in the financial statements
are approximately equal to their fair values. Where available,
market values have been used to determine the fair values of
borrowings. Where market values are not available or are not
reliable, fair values have been calculated by discounting cash
flows at prevailing interest and foreign exchange rates. This has
resulted in level 2 inputs for borrowings as defined by the IFRS 13
fair value hierarchy.
Carrying amount
At
At 31 July 2020 At
GBP millions 31 July 2021 restated (note 2) 31 January 2021
----------------- -------------- ------------------- -----------------
Bank overdrafts 19 701 6
Bank loans 3 2 4
Fixed term debt 91 633 93
----------------- -------------- ------------------- -----------------
Borrowings 113 1,336 103
----------------- -------------- ------------------- -----------------
Fair value
-------------- ------------------- -----------------
At
At 31 July 2020 At
GBP millions 31 July 2021 restated (note 2) 31 January 2021
----------------- -------------- ------------------- -----------------
Bank overdrafts 19 701 6
Bank loans 3 3 4
Fixed term debt 93 645 95
----------------- -------------- ------------------- -----------------
Borrowings 115 1,349 105
----------------- -------------- ------------------- -----------------
Cash and borrowings balances at 31 July 2021 and 31 January 2021
(and the restated balances at 31 July 2020) reflect the grossing up
of cash and overdraft balances subject to the Group's cash pooling
arrangements to ensure the Group's presentation of these balances
is in line with the requirements for offsetting in accordance with
IAS 32. See note 2.
Fixed term debt comprises a EUR50m term loan maturing in
September 2021 and a GBP50m term loan maturing in December
2021.
As at 31 July 2021, the Group had an undrawn revolving credit
facility (RCF) of GBP550m due to expire in May 2024. This replaced
the GBP225m and GBP493m facilities, due to expire in March 2022 and
August 2023 respectively, which were cancelled in June 2021.
14. Other reserves
Half year ended 31 July 2021
----------------------------------------------------------------
Cash flow
GBP millions Translation reserve hedge reserve Other Total
------------------------------------------------ -------------------- ------------------------ ------ --------
At 1 February 2021 234 (32) 159 361
------------------------------------------------ -------------------- ------------------------ ------ --------
Inventory cash flow hedges - fair value gains - 6 - 6
Tax on items that will not be reclassified
subsequently to profit or loss - (2) - (2)
Currency translation differences
Group (148) - - (148)
Joint ventures and associates (2) - - (2)
Other cash flow hedges
Fair value gains - 4 - 4
Gains transferred to income statement - (4) - (4)
Other comprehensive (loss)/income for the
period (150) 4 - (146)
Inventory cash flow hedges - losses transferred
to inventories - 34 - 34
Tax on equity items - (8) - (8)
------------------------------------------------ -------------------- ------------------------ ------ --------
At 31 July 2021 84 (2) 159 241
------------------------------------------------ -------------------- ------------------------ ------ --------
Half year ended 31 July 2020
----------------------------------------------------------------
Cash flow
GBP millions Translation reserve hedge reserve Other Total
------------------------------------------------ -------------------- ------------------------ ------ --------
At 1 February 2020 75 (6) 159 228
------------------------------------------------ -------------------- ------------------------ ------ --------
Inventory cash flow hedges - fair value losses - (7) - (7)
Tax on items that will not be reclassified
subsequently to profit or loss - 2 - 2
Currency translation differences
Group 204 - - 204
Other cash flow hedges
Fair value gains - 6 - 6
Gains transferred to income statement - (6) - (6)
Other comprehensive income/(loss) for the
period 204 (5) - 199
Inventory cash flow hedges - gains transferred
to inventories - (19) - (19)
Tax on equity items - 6 - 6
------------------------------------------------ -------------------- ------------------------ ------ --------
At 31 July 2020 279 (24) 159 414
------------------------------------------------ -------------------- ------------------------ ------ --------
Year ended 31 January 2021
----------------------------------------------------------------
GBP millions Translation reserve Cash flow hedge reserve Other Total
------------------------------------------------ -------------------- ------------------------ ------ --------
At 1 February 2020 75 (6) 159 228
------------------------------------------------ -------------------- ------------------------ ------ --------
Inventory cash flow hedges - fair value losses - (48) - (48)
Tax on items that will not be reclassified
subsequently to profit or loss - 11 - 11
Currency translation differences
Group 112 - - 112
Joint ventures and associates (2) - - (2)
Transferred to income statement 49 - - 49
Other cash flow hedges
Fair value gains - 5 - 5
Gains transferred to income statement - (5) - (5)
Other comprehensive income/(loss) for the year 159 (37) - 122
Inventory cash flow hedges - losses transferred
to inventories - 13 - 13
Tax on equity items - (2) - (2)
------------------------------------------------ -------------------- ------------------------ ------ --------
At 31 January 2021 234 (32) 159 361
------------------------------------------------ -------------------- ------------------------ ------ --------
15. Cash generated by operations
Half year ended Half year ended Year ended
GBP millions 31 July 2021 31 July 2020 31 January 2021
--------------------------------------------------------------- ---------------- ---------------- -----------------
Operating profit 747 486 916
Share of post-tax results of joint ventures and associates (1) 2 (6)
Depreciation and amortisation 273 264 536
Net impairment charges/(reversals) 2 24 (7)
Gain on disposal of property, plant and equipment, investment
property, assets held for sale
and intangible assets (1) - (10)
Loss on disposals of subsidiaries - - 49
Share-based compensation charge 14 11 14
(Increase)/decrease in inventories (303) 208 86
(Increase)/decrease in trade and other receivables (33) (39) 17
Increase in trade and other payables 487 477 267
Movement in provisions (19) (16) (30)
Movement in post-employment benefits (5) (5) (16)
--------------------------------------------------------------- ---------------- ---------------- -----------------
Cash generated by operations 1,161 1,412 1,816
--------------------------------------------------------------- ---------------- ---------------- -----------------
16. Net debt
At
At 31 July 2020 At
GBP millions 31 July 2021 restated (note 2) 31 January 2021
------------------------------------------------------------ -------------- ------------------- -----------------
Cash and cash equivalents 1,535 2,450 1,142
Cash and cash equivalents held for sale - 15 -
Bank overdrafts (19) (701) (6)
------------------------------------------------------------ -------------- ------------------- -----------------
Cash and cash equivalents and bank overdrafts including
amounts held for sale 1,516 1,764 1,136
Bank loans (3) (2) (4)
Fixed term debt (91) (633) (93)
Lease liabilities (2,319) (2,497) (2,421)
Lease liabilities directly associated with assets held for
sale - (29) -
Net financing derivatives (11) 20 (12)
------------------------------------------------------------ -------------- ------------------- -----------------
Net debt (908) (1,377) (1,394)
------------------------------------------------------------ -------------- ------------------- -----------------
At At At
GBP millions 31 July 2021 31 July 2020 31 January 2021
------------------------------------------------------------ -------------- ------------------- -----------------
Net debt at beginning of period (1,394) (2,526) (2,526)
------------------------------------------------------------ -------------- ------------------- -----------------
Net increase in cash and cash equivalents and bank
overdrafts 444 1,513 881
Repayment of bank loans 3 1 1
Issue of fixed term debt - (1,950) (1,950)
Repayment of fixed term debt - 1,461 2,011
Receipt on financing derivatives - - (1)
------------------------------------------------------------ -------------- ------------------- -----------------
Net cash flow 447 1,025 942
Lease liabilities disposed - - 27
Other movements in lease liabilities 78 69 136
Exchange differences and other non-cash movements (39) 55 27
------------------------------------------------------------ -------------- ------------------- -----------------
Net debt at end of period (908) (1,377) (1,394)
------------------------------------------------------------ -------------- ------------------- -----------------
17. Contingent liabilities
The Group is subject to claims and litigation arising in the
ordinary course of business and provision is made where liabilities
are considered likely to arise on the basis of current information
and legal advice.
The Group files tax returns in many jurisdictions around the
world and at any one time is subject to periodic tax audits in the
ordinary course of its business. Applicable tax laws and
regulations are subject to differing interpretations and the
resolution of a final tax position can take several years to
complete. Where it is considered that future tax liabilities are
more likely than not to arise, an appropriate provision is
recognised in the financial statements.
In October 2017, the European Commission opened a state aid
investigation into the Group Financing Exemption section of the UK
controlled foreign company rules. While the Group has complied with
the requirements of UK tax law in force at the time, in April 2019
the European Commission concluded that aspects of the UK controlled
foreign company regime partially constitute state aid. The UK
Government and the Group, along with other UK-based international
companies, have appealed the European Commission decision to the
European Courts.
Notwithstanding these appeals, under EU law, the UK government
is required to commence collection proceedings. In January 2021,
the Group received a charging notice from HM Revenue & Customs
(HMRC) for GBP57m, which was paid in February 2021, with a further
GBP7m interest paid in April 2021.
The final impact on the Group remains uncertain but based upon
advice taken, the Group considers that no liability is required at
this time and, consequently, GBP64m is included in non-current
assets to reflect the Group's view that the amount paid will
ultimately be recovered.
Whilst the procedures that must be followed to resolve these
types of tax issues make it likely that it will be some years
before the eventual outcome is known, other than the state aid case
described above, the Group does not currently expect the outcome of
these contingent liabilities to have a material effect on the
Group's financial position.
18. Related party transactions
The Group's significant related parties are its joint venture,
associate and pension schemes as disclosed in note 39 of the annual
financial statements for the year ended 31 January 2021. There have
been no significant changes in related parties or related party
transactions in the period.
19. Post balance sheet events
There have been no material post balance sheet events between
the balance sheet date and 20 September 2021, the date of this
report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that the condensed interim financial
statements have been prepared in accordance with United Kingdom
adopted International Accounting Standard 34, "Interim Financial
Reporting", and that the Interim Results includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the period and their impact on the interim condensed financial
statements, and a description of the principal risks and
uncertainties for the remainder of the financial year; and
-- material related party transactions in the period and any
material changes in the related party transactions described in the
last annual report.
The Directors of Kingfisher plc were listed in the Group's
2020/21 Annual Report and Accounts. A list of current Directors is
maintained on the Kingfisher plc website which can be found at
www.kingfisher.com .
By order of the Board
Thierry Garnier Bernard Bot
Chief Executive Officer Chief Financial Officer
20 September 2021 20 September 2021
INDEPENT REVIEW REPORT TO KINGFISHER PLC
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 July 2021 which comprises the condensed income
statement, the condensed statement of comprehensive income, the
condensed statement of changes in equity, the condensed balance
sheet and the cash flow statement and related notes 1 to 19. We
have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
group will be prepared in accordance with United Kingdom adopted
International Financial Reporting Standards as issued by the IASB.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
United Kingdom adopted International Accounting Standard 34,
"Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
July 2021 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
20 September 2021
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END
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