Kingfisher plc Annual Report 1999

Transcription

cover front
5/5/99 5:12 pm
Page 1
Our vision
To enable people to enjoy
their home and lifestyle
better than any other
retailer in the world
Annual Report
and Accounts 1999
R8072 ifc-01
5/5/99 5:34 pm
Page ifc2
Contents
2 Kingfisher retail sectors
We have
at a glance
3 Stores by country
4 Financial highlights
4 Chairman’s statement
6 Chief Executive’s review
12 Review of operations:
12 DIY
18 Electrical
24 General Merchandise
31 Property
32 Financial review
36 Social responsibility
38 Directors
40 Financial contents
41 Directors’ report
54 Consolidated profit and loss account
55 Balance sheets
56 Consolidated cash flow statement
57 Consolidated statement of total recognised gains
and losses
57 Note of Group historical cost profits
58 Notes to the accounts
89 Statement of the directors’ responsibilities
90 Report of the auditors to the members of Kingfisher plc
91 Kingfisher plc five-year history
92 Shareholder information
94 Notice of annual general meeting
96 Index
scaled up
in DIY
15
20
25
Outperforming
on the high street
R8072 Tor Pettersen Kingfisher R&A 9th Proof 12/4/99 Client ref: T.B.A.
Location: GP5/Wk11/Tor Pettersen Size: A4 Font set: Kingfisher
Page ifc2
Positively
charged for growth
R8072 ifc-01
5/5/99 5:34 pm
Page 1
Retail sales by sector (£m)
DIY (2,055.4)
General Merchandise (2,840.9)
Electrical (2,458.1)
Our aim
By combining global
scale and local marketing,
to grow and develop
a great business, deliver
superior returns to
our shareholders and
provide unique and
satisfying opportunities
for our people
Kingfisher plc Annual Report and Accounts
Page 1
1
R8072 pp02-05
5/5/99 1:03 pm
Page 2
Kingfisher retail sectors at a glance
Retail sales
(£m)
(Euros m)
Retail profit
(£m)
10,480.8 7,354.4
784.7
550.6
2,742 3,971.5 78,133
DIY
B&Q
Other*
2,929.2 2,055.4
2,719.7 1,908.4
209.5
147.0
272.4
268.1
4.3
191.1
188.1
3.0
494 2,476.8 33,591
290 1,345.1 14,563
204 1,131.7 19,028
Electrical
Darty
Comet
Wegert**
BUT**†
Other
3,503.0 2,458.1
1,601.5 1,123.8
1,229.0
862.4
360.6
253.0
114.4
80.3
197.5
138.6
247.1
164.0
47.6
10.7
21.4
3.4
173.4
115.1
33.4
7.5
15.0
2.4
698
163
261
168††
59
47
General
Merchandise 4,048.6 2,840.9
Woolworths
2,512.7 1,763.2
Superdrug
1,138.1
798.6
Other
397.8
279.1
265.2
163.0
58.6
43.6
186.1
114.4
41.1
30.6
(Euros m)
Kingfisher
*
**
†
††
2
Number Sales space
of stores (000’s sq.m.)
1,550
786
703
61
686.8 21,192
188.3
8,575
183.1
7,343
119.8
2,474
159.7
1,823
35.9
977
807.9 23,350
584.2 15,080
201.5
6,506
22.2
1,764
Includes one month of Castorama and two months of NOMI
Included from dates of acquisition; six months of Wegert and three months of BUT
The figures for BUT do not include those franchises which are not consolidated in the Group figures
The total includes 64 electrical superstores and smaller photographic stores
Page 2
Number of
employees
(FTE)
R8072 pp02-05
5/5/99 1:03 pm
Page 3
Stores by country
2,097
11
21 20
25
168
Canada
UK
Poland
Holland
Belgium
Luxembourg Germany
Taiwan
Austria
France
Singapore
1
Brazil
7
Italy
374
2
Now a much more
international business,
Kingfisher operates 2,742
stores employing 115,383
people in 13 countries,
nine of them in Europe
9
3
Our focus
The customer...to
provide an unbeatable
shopping experience
built on great value,
service and choice,
whilst rapidly identifying
and serving their everchanging needs
4
Page 3
3
R8072 pp02-05
5/5/99 1:03 pm
Page 4
Financial highlights
Chairman’s statement
Pan-Euro
1999
(Euros m)
Turnover
Profit before exceptional items and tax
Exceptional items
Profit before tax
Net operating cash flow
Capital investment
Net debt
1999
(£m)
1998
(£m)
10,628.1 7,457.8
830.1
582.5
66.7
46.8
896.8
629.3
6,409.4
505.0
15.0
520.0
698.3
743.6
693.4
605.0
214.8
203.5
Gearing (%)
26.5
11.5
Earnings per share before exceptional items net of tax (p)
Basic earnings per share (p)
Dividend (per share) (p)
29.9
32.3
13.0
27.6
28.7
11.5
32.3
13.0
311.2
4
11.5
8.1
7.6
17.3
9.5
520.0
28.7
20.8
13.0
95 96 97 98 99
6,409.4
95 96 97 98 99
5,814.8
95 96 97 98 99
5,280.7
95 96 97 98 99
4,887.7
629.3
Dividend per
share (pence)
388.1
Basic earnings
per share (pence)
243.8
Profit before
tax (£m)
7,457.8
Turnover (£m)
995.1
1,059.7
988.2
Page 4
The increase in Kingfisher’s sales and
profits last year reflects the significant
progress we made towards our
strategic ambition of building a
pan-European retail group, dedicated
to giving customers unbeatable value,
choice and service. It is a strategy we
believe will go on driving our growth.
The Group’s sales in the year
to 30 January 1999 increased by
16.4 per cent to £7.46 billion. Profit
before tax increased by 21 per cent
to £629.3 million. These would be
good results by most standards and
they were particularly pleasing against
a tough retail environment, especially
in the UK during the second half of
the year.
Basic earnings per share grew
by 12.5 per cent to 32.3p. The growth
of our earnings was held back by an
increase of over £50 million in
taxation from £133.1 million to
£183.5 million. The reason for this is
explained in the financial review on
pages 32 to 35.
In spite of significantly higher
investment during the year in growing
the business, gearing remained
comfortable at 26 per cent.
This, combined with our strong
cash flow and solid balance sheet,
allows the Board to recommend a
final dividend of 9.25p, making a total
for the year of 13p, an increase of
13 per cent.
It is 10 years since the Group
changed its name from Woolworth
Holdings to Kingfisher. The change of
name signalled a determination to use
the collective strength of marketleading brands to build a retail group
with international ambition.
Today, as a result of our strategy
to develop international DIY and
electrical sectors alongside a growing
UK-based general merchandise
sector, Kingfisher ranks among the
R8072 pp02-05
6/5/99 11:29 am
Page 5
-European
strategy delivers results
leaders in European retailing. We are
now Britain’s most pan-European
retailer.
The merger last December of
B&Q, our UK market-leading DIY
business, with Castorama Dubois
Investissements S.C.A., the French DIY
market leader, was one of the major
events of the year. But we also made
challenges will not be any easier. At the
same time we draw encouragement
from the knowledge that Kingfisher
is on the threshold of being able to
capitalise more effectively on its added
scale to be even more competitive.
Our strategic progress last year
has made Kingfisher a truly European
retailer. This, together with our
Our strategic progress last year has made Kingfisher into a truly
European retailer...and opened up new avenues for growth to the
benefit of our people and shareholders
other important moves in growing
both the DIY and electrical sectors as
your Chief Executive describes in his
review on the following pages. The
priority now is to deliver the benefits
of these additions to the Group.
Kingfisher’s continuing progress
last year owed much to the
commitment of our people.
I would like to record our thanks to
Tony Percival, who after more than
four years as Finance Director has
retired, handing over the role to
Philip Rowley. Tony remains a director.
None of the Group’s
achievements would have been
possible without the professionalism,
enthusiasm and dedication of our
staff at every level of the business.
They play a special part in ensuring
that every day is a special day for
our customers and I thank them all.
As the number of our people
grows internationally we are
examining ways to enable more
of them to share in the Group’s
success through an enhanced
Sharesave Scheme for everyone
in the business.
We face this year and the new
millennium knowing that the
seedcorn investments in emerging
markets, has opened up new avenues
for growth to the benefit of our
people and shareholders.
Sir John Banham Chairman
Page 5
5
R8072 pp06-11
5/5/99 4:09 pm
Page 6
Chief Executive’s review
mileston
Sir Geoffrey Mulcahy Chief Executive
A decade of achievement...
90
92
93
94
95
3.54
2.93
91
2.71
2.35
1.26
89
2.08
1.18
4.01
4.59
7.02
10.78
*Kingfisher market capitalisation 1989–1999 (£bn)
96
97
98
99
*Calculated as at 17 March each year
...and new goals for the next five years:
• Rank among the fastest-growing international
retailers in the world
• Be famous for retail brands with unequalled
reputations in their markets, for innovation as well
as unbeatable value and service
• Achieve consistently higher ratings than competitors
for customer and employee satisfaction
6
Page 6
Last year was a milestone in
Kingfisher’s strategic development.
We made important progress in
the international expansion of our
electrical sector and finally achieved
our long-held ambition to take DIY
international in a major way.
As a result, we ended the year
a much larger and more international
business, with 2,742 stores employing
115,383 people in 13 countries, nine
of them in Europe. Around 40 per
cent of our year-end, annualised sales
of some £9.5 billion now come from
outside the UK, mainly France and
Germany.
Our financial results last year
highlight the effect of two things.
First, the continuing organic
expansion and like-for-like growth of
the existing businesses. Second, the
significant investment in achieving
strategic growth by expanding our
international sectors.
The Group’s underlying sales
growth during the year was over
eight per cent, with like-for-like sales
increasing by almost five per cent.
The overall contribution of the
business additions was to increase
Group sales by £507 million and
operating profits by £20.5 million.
R8072 pp06-11
5/5/99 4:09 pm
Page 7
Added European dimension marks
estone year
and a new phase
in our ambition
We now look at the retail businesses
as three clear sectors – DIY and
electrical, both headquartered in
France, and general merchandise,
based in the UK. All of the sectors
last year reported organic growth,
with DIY and general merchandise
leading the way.
DIY sales increased by 17 per
cent to a total of £2.06 billion with
operating profits up by 18 per cent
to £191 million. Electrical sales
totalled £2.46 billion, an increase of
nearly 27 per cent, with operating
profits up by 18 per cent to
£173 million. General merchandise
sales grew by over eight per cent to
£2.84 billion, with operating profits
moving ahead at the same rate to
£186 million.
Chartwell Land, our specialist
retail property company, ended the
year with gross assets valued at
£1.29 billion. It increased operating
profits by 13.1 per cent to
£69.1million.
Reviews of the sales and profits
performances of each of the sectors
can be found on the following pages.
What they tell is a consistent story of
unswerving commitment throughout
the Group to delivering unbeatable
value, service and choice to our
customers. This is an obsession.
The reward has been growth in our
market shares in DIY and electrical
and in many of our key categories
in general merchandise.
We invested heavily in growth
during the year. Capital expenditure
on new stores, refurbishments, and
improvements to our infrastructure,
notably systems and logistics, totalled
almost £379 million. A further
£365 million was invested in adding
businesses to strengthen our DIY
and electrical sectors, as well as our
entertainment offer in the general
merchandise sector.
Right across the Group then, we
made good progress. And 10 years
on from our name change to
Kingfisher from Woolworth Holdings
our market capitalisation has
increased almost tenfold to over
£10 billion. But we must continue
to invest in innovation and growth
to maintain this record.
Retailing is becoming ever more
challenging. We face a brave new
world of global competition, a world
where the Euro and the Internet
are driving cross-border price
transparency, a world where
Page 7
7
R8072 pp06-11
5/5/99 4:09 pm
Page 8
Chief Executive’s review continued
customers are more demanding and
we will have to work even harder to
win our share of their spending. It is
also a world of price deflation in
many categories and new challenges
from alternative shopping channels.
The overriding strategic reason
behind our drive for scale is not size
for the sake of size, but because size
matters in the battle for tomorrow’s
customers. Size matters because with
it comes the potential for benefits in
operational and buying efficiencies
that can be translated into better
value for customers.
We need to put ourselves into
the position of being able to offer our
customers the same benefits of scale
as our largest European and US
competitors. For example, although
B&Q and Castorama combined are
twice as big as their nearest European
rival, they are a quarter of the size of
America’s Home Depot.
...Kingfisher has never been better placed
to face the future, however challenging
Young Kingfisher managers of the future enjoy
a workshop on people management skills as
part of their comprehensive development
programme. They are: 1) Paul Whyte
2) Robin Culpan 3) Lynda Bridgett 4) Phil Tysoe
5) Paul Aldridge 6) John Austin (trainer)
7) Shaun Conning 8) Emma English
9) Gwyneth Hopkins 10) Suzanne Patterson
11) Matt Stirrup 12)Tammy Denbow
1
4
7
9
8
11
2
5
12
6
3
8
10
Size, however, is only part
of the explanation. The rest is to
do with product specifications,
transport infrastructure, planning
restrictions and other regulatory
and tax differences, which increase
operating costs in Europe and
need to be reviewed if British and
continental European shoppers are
going to enjoy the lower prices
available to US shoppers. It is a
complicated subject that deserves
a constructive debate.
The European single market
provides a real opportunity for us
to have a domestic base even larger
than that of our US rivals. We are
determined that Kingfisher should
capitalise on this to build a
world-class business with the size
and knowledge of local markets to
bring customers an unbeatable
shopping experience.
Page 8
R8072 pp06-11
5/5/99 4:10 pm
Page 9
Page 9
R8072 pp06-11
5/5/99 4:10 pm
Page 10
Chief Executive’s review continued
We mean to be among the
global winners. With this objective
uppermost we have set ourselves
key goals for the next five years.
They are these:
• Rank among the fastest-growing
international retailers in the world
• Be famous for retail brands with
unequalled reputations in their
markets, for innovation as well as
unbeatable value and service
• Achieve consistently higher ratings
than competitors for customer and
employee satisfaction.
These are ambitious targets for
both the growth and quality of our
business. We take them on knowing
that Kingfisher has never been better
is now in its fourth year. This scheme
provides talented young people
who want to make a career in retail
management with a direct route
to senior management. It provides
on-the-job, practical experience with
the academic rigour of a speciallytailored post-graduate qualification
in management studies in association
with Templeton College at Oxford
University.
Thinking Kingfisher as well as
sector or operating company is now
part of our management culture.
It is key to achieving the benefits of
scale that will enable us to deliver an
increasingly compelling proposition
to our customers.
Thinking Kingfisher as well as sector or operating company is
now part of our management culture. It is key to achieving the
benefits of scale
placed to face the future, however
challenging. We have a dedicated and
committed management team and
a well-defined strategy.
Our priorities are clear too.
First, to reinforce our leading positions
in our existing markets. Second, to
establish leading positions in other
European markets. Third, to exploit
opportunities for growth in emerging
markets.
Being a world-class business
places an even greater premium on
management quality and particularly
on top-flight international managers.
We have been investing heavily in
building our senior management
team, and an increasing number of
our most senior people today have
worked in more than one part of
the Group. This is a trend we will
continue to promote.
As part of our commitment to
developing a cadre of top-quality,
international Kingfisher managers,
we are continuing to invest in the
Kingfisher Management Development
Scheme for graduate recruits, which
10
Page 10
At moments like these, when
a business is faced by so many
challenges, it is sometimes helpful for
everyone involved to be inspired by
the example of others. This is one
of the reasons for our sponsorship
of the young, single-handed
yachtswoman, Ellen MacArthur
in last year’s Route du Rhum
transatlantic race and the Vendée
Globe round-the-world race starting
in November 2000.
Another is the need to
internationalise recognition of the
Kingfisher brand as we expand
the business. Supporting a British
entrant in these classic French races
underlines our strong Anglo-French
credentials.
Our growth plans for this year
include investment in opening 103 new
stores, creating around 4,800 new jobs.
The planned new openings will add
33 DIY outlets, 31 electrical outlets
and 39 general merchandise outlets.
In addition, we are undertaking
a number of important initiatives,
specifically designed to promote
R8072 pp06-11
5/5/99 4:10 pm
Page 11
Young British yachtswoman, Ellen MacArthur,
will carry the Kingfisher colours in her attempt
to race single-handed around the world in
France’s prestigious Vendée Globe 2000 event.
Last year she won her class in the Route du
Rhum transatlantic race, another French classic
the benefits of scale to which I have
already referred. These include
projects on global sourcing and
pricing, supply chain efficiency,
customer satisfaction, and the
development of complementary
channels of business, such as home
shopping and on-line selling, as well as
the development of our international
management team.
As we start our next decade
as Kingfisher and go into the new
millennium, I am more excited than
ever by the opportunities and the
challenges. By energetically pursuing
our strategy and keeping an
unblinking focus on our customers,
I am convinced that it will be no less
rewarding than the past.
Sir Geoffrey Mulcahy Chief Executive
Page 11
11
R8072 pp12-17
6/5/99 11:26 am
Page 12
Warehouses have strengthened
B&Q’s leadership of the UK market
Supercentres make up the core
of the B&Q chain
France’s leading DIY retailer
France’s growing chain of smaller,
best price outlets
Focusing on the needs of building
trade professionals in France
Quebec’s leading chain of
warehouse stores
In Poland, NOMI now operates
22 stores
Page 12
R8072 pp12-17
6/5/99 11:26 am
Page 13
Review of operations
NOMI (22)
Réno-Depôt (11)
Brico-Depôt (25)
Dubois Matériaux (7)
B&Q Supercentres (251)
Castorama (139)
B&Q Taiwan (4)
B&Q Warehouses (35)
(Store numbers)
Kingfisher DIY
Europe’s
No.1in DIY
and No.3 in
the world
The merger of B&Q
with Castorama gives
Kingfisher Europe’s
largest DIY operation,
with almost 500 stores
operating in nine
countries. It ranks No.3
in the world
Page 13
13
R8072 pp12-17
5/5/99 6:50 pm
Page 14
Highlights
• Retail profit up 18.3% to £191.1m
• Retail sales up 17.2% to £2,055.4m
• Castorama and B&Q merge to
form No.1 DIY retailer in Europe
• Strong performance of
Warehouse outlets
• Acquisition of a leading chain
in Poland
• Further expansion in the Far East
Profit (£m)
55.4
83.0
97.2
161.6
191.1
1,219.3
1,283.6
1,464.0
1,753.7
2,055.4
Sales (£m)
95 96 97 98 99
B&Q market
share (%)
UK market sizes
(£bn)
15.4
15.9
17.1
19.0
19.5
95 96 97 98 99
Decorative
2.55
Gardening
2.73
Building
0.85
Showroom
1.36
Electrical
0.90
Hardware
1.15
95 96 97 98 99
Market commentary
The UK DIY market grew by £540m last
year to £9.54bn. B&Q’s share increased
from 19% to 19.5%
French-based Castorama, which also
operates in Europe’s other leading
markets, offers a DIY range which
includes more than 60,000 product lines
14
Page 14
R8072 pp12-17
5/5/99 6:51 pm
Page 15
Review of operations continued – Kingfisher DIY
Castorama-B&Q
e5.5bn
We have
scaled
up
our plans in DIY
Leading European DIY operators by sales
The partnership of Castorama and B&Q
clearly leads the European market. Figures
here are expressed in Euros according to
the most recent data
Praktiker
OBI
e2.7bn
e2.5bn
Leroy Merlin
e2.2bn
Homebase
e1.7bn
Kingfisher’s DIY sector is now
in a league of its own in Europe
as a result of last year’s major
developments. The principal event
of the year was the merger in
December of B&Q with Castorama,
which united the UK and French
market leaders to create an unrivalled
European number one.
Together with NOMI in Poland, in
which Kingfisher acquired a controlling
interest last November, and the
B&Q International operations in the
Far East, the sector now operates
494 DIY stores in nine countries and
has a combined annualised turnover
of approaching £4 billion.
Sales in the sector last year
17 per cent. Operating profits rose
by 18 per cent to £191million.
These results were due to another
strong performance by B&Q, with
a comparatively small contribution
from consolidating one month of
Castorama and two months of NOMI.
Both B&Q and Castorama
celebrate their 30th anniversaries this
year. They are well-established brands
in their home markets, where each is
pursuing a twin-track growth strategy.
At B&Q this is expressed through
its Supercentre and Warehouse
formats. At Castorama it is found in
the standard Castorama stores and
a developing chain of smaller
Brico-Depôt outlets.
Last year B&Q increased sales by
almost nine per cent to £1.91 billion
and operating profits by 16.4 per cent
to £188.1 million. In the process it
captured the lion’s share of growth
by DIY multiples and improved its
shares of both the DIY and the larger
Repair, Maintenance and Improvement
(RMI) markets.
Like-for-like sales growth of
5.5 per cent was the main driver
of B&Q’s growth and reflected the
continuing strong performance of
the large format Warehouse stores
as well as good progress in
Supercentres. New store openings,
particularly of Warehouses,
accounted for the remainder.
Page 15
15
R8072 pp12-17
5/5/99 6:51 pm
Page 16
Adding value
16
Page 16
by giving b
R8072 pp12-17
5/5/99 6:51 pm
Page 17
Review of operations continued – Kingfisher DIY
During the year, B&Q opened seven
additional Warehouse outlets, bringing
the total trading in the UK at the year
end to 35. Nearly half these outlets
are achieving annualised sales in
excess of £20 million and Warehouse
sales last year were 29 per cent of
the B&Q total.
Improvements to the customer
offer through range and merchandise
developments were key to B&Q’s
strong competitive performance.
Highlights included the launch of
B&Q Colours own-label paint range,
which drove core paint sales to
record levels, a significantly expanded
and much improved lighting display,
and innovations in building products,
including a new decking range
in timber.
The Castorama Group comprised
four separate brands prior to the
B&Q merger. They were Castorama
in France as well as Italy, Germany,
Belgium and Poland; the Brico-Depôt
chain in France; the Réno-Depôt
warehouse-style chain in Canada,
and the Dubois Matériaux builders’
merchants operation in France.
The Castorama Group reported
its financial results for 1998 separately.
In the year to December 1998 its
sales rose by 14.5 per cent to
£2.10 billion, and operating profits
by 35.4 per cent to £98.8 million.
ue
B&Q further enhanced its value-formoney reputation with popular
marketing initiatives, including the
launch of the B&Q Colours
own-label range, which drove
core paint sales to record levels
Like-for-like sales growth was
4.7 per cent.
Almost a fifth of Castorama’s
total sales came from its international
operations. Meanwhile, in France,
Castorama took close to 30 per cent
of multiple DIY sales to consolidate
its leading 15 per cent share of the
market. Since its launch 18 months
ago, the Company’s Atout loyalty
card has attracted 250,000 holders,
and its use accounts for 11 per cent
of turnover.
As a result of the merger of B&Q
with Castorama, Kingfisher holds
57.9 per cent of the enlarged group’s
issued capital (54.6 per cent fully
diluted). The Castorama Group
remains listed on the Paris Bourse.
We expect the merger to bring
significant benefits by creating a
group with much greater financial
resources, unequalled geographic
reach and a powerful combination
of formats developed to suit different
markets. Our B&Q and Castorama
management teams are now working
closely together to exchange best
practice and achieve joint buying
savings, which are expected to be
worth at least £50 million a year after
three years, with around a third
expected in the current year.
In Poland NOMI opened eight
new stores last year bringing its total
to 22. It is one of Poland’s leading
locally-based DIY chains.
This year we expect to open
33 new outlets around the world.
B&Q plans a further 11 Warehouses
and two Supercentres in the UK,
while B&Q International will open
three new stores in Taiwan, where it
already has four, and one at Shanghai
in China. Castorama plans 10 new
stores, of which one will be in France
with the others in Italy, Germany,
Poland and Brazil. NOMI plans
five additions.
by giving better value to customers
Page 17
17
R8072 pp18-23
5/5/99 10:46 am
Page 18
Clear leader of the French market
Strengthens Kingfisher’s presence
in the French electrical market and
takes the Group into the French
furniture market
Number two in the UK with
increased market share
Provides a presence in the huge
German market
One of the Netherlands’ leading
electrical retailers
A leading electrical retailer in Belgium
Newly-acquired chain of seven
stores in Singapore
Page 18
R8072 pp18-23
5/5/99 10:46 am
Page 19
Review of operations continued
BCC (20)
BUT (59)
New Vanden Borre (20)
Comet (261)
Darty (163)
Electric City (7)
Other Wegert (104)
ProMarkt/Macro Markt (64)
(Store numbers)
Kingfisher Electrical
A European
powerhouse
With almost 700
stores, Kingfisher now
operates one of
Europe’s top three
electrical chains with
a strong presence
in seven European
countries – more than
any other electrical
retailer – as well as
in Singapore
Page 19
19
R8072 pp18-23
5/5/99 11:06 am
Page 20
Review of operations continued –
Highlights
• Retail sales up 26.8% to
£2,458.1m
• French market recovery and
further acquisitions drive growth
• World Cup and new products
boost sales
• Both Darty and Comet increase
market share
95 96 97 98 99
12.9
13.0
13.2
13.4
18.3
*French market
share (%)
95 96 97 98 99
*Market share for 1999
includes pro-forma sales for
BUT, including franchises
French market
(FFbn)
Brown goods
38.6
White goods
41.2
102.1
116.5
133.3
146.8
173.4
Profit (£m)
95 96 97 98 99
UK market
share (%)
9.6
10.1
10.4
11.7
12.3
1,550.7
1,742.5
1,875.2
1,937.9
2,458.1
Sales (£m)
95 96 97 98 99
UK market
(£bn)
Brown goods
3.10
White goods
3.28
Market commentary
The European electrical market was
mixed with growth on the Continent
offset by less buoyant UK trading
20
Kingfisher Electrical, in which Darty
is the market leader in France and
Comet the number two in the UK,
saw additional expansion in France as
well as new moves into Germany and
the Far East during the course of last
year. At the same time, the existing
businesses grew sales.
In France we increased our
holding in BUT, the furniture and
electrical retailer, from 26 per cent to
98 per cent. In Germany we acquired
60 per cent of Wegert, which operates
64 electrical superstores under the
ProMarkt and Macro Markt fascias and
more than 100 smaller stores offering
photographic, telephone and audio
products. In Singapore we also added
Electric City, which has seven stores.
With a total of almost 700 stores
having annualised electrical sales of
over £2.7 billion, we are now one of
Europe’s top three electrical chains
and operate in seven European
countries, more than any other
electrical retailer.
The European market for
electrical goods last year was mixed.
Isabelle Lefevre is part of the expanded
help line team which helps keep Darty at
the forefront of customer service excellence
in France
+
Service
+
More stores
Positively cha
Growth on the Continent was offset
by less buoyant trading in the UK.
The football World Cup, new digital
products and continuing strong sales
of mobile phones and multimedia
products were key drivers of growth
in brown goods. However, price
deflation remained a significant
characteristic of the consumer
electronics market across Europe.
Overall sales in the sector
26.8 per cent. Operating profits grew
Page 20
+
R8072 pp18-23
5/5/99 11:06 am
Page 21
ely charged
for growth
+
New products
Synergy
+
Market potential
Page 21
21
R8072 pp18-23
5/5/99 12:55 pm
Page 22
Moving
by over 18 per cent to £173.4 million.
These figures include the contributions
of the new businesses.
In France, Darty increased profits
in sterling terms by 7.6 per cent to
£115.1 million. The increase was
broadly similar in local currency
terms, at 7.2 per cent to FFbn 1.1.
Last year saw a recovery in the
French market for both brown and
white electrical goods. Against this
background, Darty once again
increased its share of its core
markets, and achieved strong growth
in multimedia and mobile phones.
Like-for-like sales growth of
6.7 per cent for the year compared
with estimated market growth of
4.6 per cent. Darty’s share of the
market grew from 13.4 per cent to
13.7 per cent.
Key developments during the
year were the opening of seven new
stores, including a 2,000 sq.m. format
at Nation in Paris, the roll-out of an
enhanced multimedia offer and the
launch of new customer call centres
and helplines.
In the UK, Comet increased
sales by 5.1 per cent to £862.4 million
with profits remaining flat at
£33.4 million.
Despite a like-for-like sales
decline of 0.6 per cent in the year,
Comet increased its market share
from 11.7 per cent to 12.3 per cent.
During the year Comet opened
eight new stores, relocated 17 stores
and carried out major refits to nine
stores. It also opened a new purposebuilt, brown goods distribution centre
at Corby and, towards the end of the
year, launched a much improved,
nationwide home delivery and
installation service.
22
fast
Comet performed strongly in the vision
market, benefiting from increased demand
for widescreen televisions and the launch
of digital TV
Wegert, which has stores in
Germany, Austria and Luxembourg,
contributed sales of £253 million
and profits of £7.5 million for the
seven months from 1 July to the
year end.
New Vanden Borre in Belgium
and BCC in Holland both increased
sales. With the contribution of
Electric City in Singapore, they
accounted for nearly £139 million of
total sales and £2.4 million of profits.
During the current year there are
plans for 31 new store openings in
the sector. Darty plans eight openings
and will relocate one store and
refurbish another eight. BUT has six
additions planned.
Comet plans eight new stores.
Wegert also has plans for eight new
stores, with the remainder being
added by the other businesses.
Page 22
Comet, which opened eight new stores
during the year, also successfully rolled
out a nationwide home delivery service.
The Comet team has made over one million
customer deliveries, travelling over 10 million
miles in a year
R8072 pp18-23
5/5/99 12:55 pm
Page 23
forward
1984
Kingfisher acquires
Comet in the UK
1993
Kingfisher enters
French electrical
market when Darty
joins the Group
1995
Kingfisher acquires
Vanden Borre to
enter Belgian
electrical market
1996
Kingfisher acquires
Norweb’s stores in
the UK and takes a
26 per cent stake in
BUT in France
1997
Kingfisher acquires
BCC, one of the
Netherlands’ leading
electrical retailers
1998
Kingfisher enters Germany
through the addition of
Wegert, raises its BUT
stake above 98 per cent
and acquires Electric City
in Singapore
Page 23
23
R8072 pp24-30
5/5/99 1:26 pm
Page 24
Leads the UK market for
entertainment and confectionery
and is a favourite for toys and
clothes
The UK market’s second largest
health and beauty specialist
Home entertainment retailer with a
rapidly-growing, high-street presence
One of the UK’s major distributors
of entertainment products
Page 24
R8072 pp24-30
5/5/99 1:26 pm
Page 25
Review of operations continued
MVC (61)
Superdrug pharmacy (177)
Woolworths Local (472)
Superdrug non-pharmacy (526)
Woolworths Heartland (205)
(Store numbers)
Woolworths City (109)
Kingfisher General
Merchandise
Outperforming
on the
high street
In general merchandise,
Kingfisher is one of
the UK’s largest
high-street retailers
with over 1,500 stores.
Both Woolworths
and Superdrug
outperformed rivals
during a year of
difficult trading
Page 25
25
R8072 pp24-30
5/5/99 1:26 pm
Page 26
Kingfisher General Merchandise
Our
Highlights
• Retail sales up 8.5% to £2,840.9m
• Strong growth in Entertainment
and Health categories
• Space expansion and store
•
refurbishment programmes
continued
Increased share of core markets
Profit (£m)
94.2
109.1
143.1
171.3
186.1
2,081.3
2,204.0
2,377.3
2,618.0
2,840.9
Sales (£m)
95 96 97 98 99
95 96 97 98 99
Woolworths key
market sizes (£bn)
Woolworths
market shares (%)
Entertainment
2.90
Confectionery Entertainment
5.25
Toys
Kidswear
Personal stationery
Confectionery
Kidswear
2.94
15.2
15.1
6.0
5.1
4.3
Personal
stationery
2.47
Toys
1.67
Superdrug
key market sizes (£bn)
Beauty
1.80
OTC
healthcare
2.50
8.1
9.8
10.3
10.7
11.0
Superdrug market
share (%)
Female
personal
care
0.28
Haircare
0.85
Men's toiletries
Personal 0.52
wash
0.45
95 96 97 98 99
Market commentary
Total value of Woolworths key markets
grew by 2.6%, whilst health and beauty
categories grew by 6%. Both Woolworths
and Superdrug increased market share
in strategically important segments
26
family stor
In our General Merchandise sector
in the UK we saw Woolworths and
Superdrug outperform competitors
on the high street on the basis of
like-for-like sales growth.
Sales growth at Woolworths and
Superdrug was driven by marketing
initiatives and product developments
to improve the customer offer. The
sector’s sales increased by 8.5 per cent
to £2.8 billion. Operating profits
grew by the same rate to just over
£186 million.
Customers sought out value at
Woolworths and Superdrug,
especially during the second half of
the year when consumer spending
slowed sharply. Both chains enjoyed
comparatively good sales growth,
with Christmas being a highlight.
Woolworths reinforced its place
as one of the nation’s favourite family
stores, with sales rising by 6.0 per cent
to £1.76 billion, and profits up by
8.8 per cent to £114.4 million.
Like-for-like sales growth was
5.3 per cent and reflected increased
market shares in the majority of
Woolworths’ key categories.
Entertainment was Woolworths’
strongest performing category, with
sales up by 14 per cent. Between
its October release and Christmas,
Woolworths sold over a million
copies of the Titanic video, capturing
a quarter of all UK sales in the
first week.
For the third year running, the
Woolworths Winter Wonderland
advertising campaign achieved the
highest spontaneous consumer recall
of any Christmas retail campaign.
During the year Woolworths
continued a programme to add a
million square feet (93,000 sq.m.) of
additional selling space over the next
few years and opened three new
stores. It also extended or refurbished
another 98 stores.
Page 26
The children’s favourite for sweets,
Woolworths maintained its position as
the country’s number one retailer for
confectionery
R8072 pp24-30
5/5/99 1:26 pm
Page 27
y store
Entertainment was Woolworths’ strongestperforming category, with sales up by
14 per cent and a market-leading share of
15.2 per cent
keeps on growing
The latest Ladybird collection, exclusively
available at Woolworths, has been completely
revamped to give children and parents
everything they want from the brand
Page 27
Always special for special events, Woolworths
sells 157 different types of Easter eggs, 69 of
which are only available at Woolworths
R8072 pp24-30
28
5/5/99 1:27 pm
Page 28
Page 28
R8072 pp24-30
5/5/99 1:27 pm
Page 29
Superdrug’s continued investment in store
refurbishments and the additions of pharmacies
strengthened its authority as a major health
and beauty specialist
At Superdrug sales increased by
6.6 per cent to almost £799 million.
Like-for-like sales growth was 5.4 per
cent. Operating profits were flat at
£41.1 million, reflecting continued
investment in the health and beauty
repositioning programme at the chain.
A further 47 pharmacies were
added to Superdrug stores, making a
total of 177 at the year end. As a result,
a quarter of all Superdrugs had a
pharmacy, making it one of the nation’s
largest chains of dispensing chemists.
During the current year we
plan to step up the rate of new
store openings at Woolworths and
continue investment in repositioning
Superdrug. Woolworths expects
to open 14 stores, including a trial
edge-of-town format to be called
Big W. This 6,500 sq.m. store will
open in Edinburgh in June and will
carry a comprehensive range of
Woolworths merchandise as well
as merchandise supplied by other
Kingfisher companies. Other
development initiatives include a
continuing expansion of Woolworths’
home shopping offer.
Entertainment UK (EUK), the
Group’s leading music and video
wholesaler, reported a 21 per cent
sales increase during the year,
outperforming market growth strongly.
In November, our strength in
entertainment was reinforced by the
addition of VCI, the music, video and
Changing
the face
of health and beauty
Page 29
29
R8072 pp24-30
5/5/99 1:27 pm
Page 30
book publisher. It has publishing and
distribution rights on popular brands
such as Manchester United Football
Club and Thomas the Tank Engine.
Meanwhile, at MVC, we saw
sales grow strongly as the chain
continued to open new stores, taking
its total from 47 to 61 during the year.
MVC plans to increase store
numbers by another 30 per cent
this year.
Kingfisher strengthened its presence in the
home entertainment market. Leading music
and video wholesaler EUK joined forces with
publisher VCI, whilst MVC expanded its store
chain to 61 outlets
Intune
with growing demand
Page 30
R8072 pp31-35
6/5/99 11:52 am
Page 31
Property
Highlights
• Operating profit up 13.1 per cent
• Revaluation surplus of £56.7m
• Gross rents of £78.3m, nearly
three quarters from Group
tenants
1,285
Asset growth
(£m)
800
817
903
1,026
48.6
53.6
58.6
61.1
69.1
Operating profit
(£m)
95 96 97 98 99
Chartwell Land
Chartwell Land, Kingfisher’s specialist
retail property company, increased
operating profit by 13.1 per cent to
£69.1 million (1998: £61.1 million).
However, total returns comprising
operating profit, profit on investment
property sales and a much reduced
revaluation surplus were
£129.1 million (1998: £179.6 million).
Of the total gross rents of
£78.3 million, £56.4 million or
72 per cent came from Group tenants.
Profit from development increased
by £0.8 million to £6.3 million
(1998: £5.5 million). The development
business also completed construction
of two new B&Q Warehouses, at
Edinburgh and Paisley, retained in
the investment portfolio.
Profit on disposals from the
investment portfolio was £3.3 million.
The revaluation surplus was
£56.7 million, significantly lower
than the strong performance of
£114.2 million last year, owing to
a softening of the property market,
mainly in the second half.
The gross assets at the end of
the year were valued at £1.29 billion
compared to £1.03 billion in the
previous year.
95 96 97 98 99
Rental income split
Woolworths 46%
Third party 29%
Other Group 6%
B&Q 19%
Assets
top £1.29 billion
Chartwell Land’s development business
completed the construction of a new
B&Q Warehouse in Edinburgh which is
retained in the investment portfolio
Page 31
31
R8072 pp31-35
5/5/99 2:11 pm
Page 32
Financial review
Shareholder return and
dividends
Earnings per share before exceptional
items increased by 8.2 per cent to
29.9p (1998: 27.6p, as adjusted for
the share split on 2 July 1998).
After exceptional items, principally
the release of a VAT accrual of
£44.7 million, basic earnings per share
£m
1999
Net debt at the start of the year
Net cash from operating activities
Net capital expenditure
Net investment in new businesses
Net additions/(sales) of investments
1998
203.5
399.2
(698.3) (605.0)
378.6
176.8
365.0
38.0
14.4
(41.6)
Interest, tax and other
Dividends
Consolidation of new companies
263.2
166.0
153.8
110.4
(32.6)
100.8
135.3
–
Net debt at the end of the year
693.4
203.5
32.3
Earnings per
share after
exceptional
items (p)
13.0
15.8
15.8
17.3
20.8
20.9
28.7
27.6
29.9
Earnings per
share before
exceptional
items (p)
Dividend
per share
(p)
Average
share price
(p)
260
238
307
7.6
8.1
379
9.5
11.5
537
95 96 97 98 99
13.0
95 96 97 98 99
95 96 97 98 99
32
95 96 97 98 99
increased by 12.5 per cent from 28.7p
to 32.3p. In addition, the revaluation
surplus of £58.4 million on the
Group’s property portfolio was
equivalent to a further increase in
shareholder value of 4.3p per share.
The Board has proposed a final
dividend of 9.25p per share, making
a total dividend for the year of
13.0p per share. This represents
an increase of 1.5p or 13.0 per cent
and is covered 2.3 times from
pre-exceptional earnings.
During the year the share price
increased from 479p, peaking at 694p
shortly before the year end.
Cash flow and investment in
the businesses
Net debt grew from £203.5 million at
the start of the year to £693.4 million
by the year end, with gearing
increasing from 11.5 per cent to
26.5 per cent. In addition, we issued
a further £101.3 million of nonrecourse notes through the Group’s
financial services company Time Retail
Finance. Cash generation across
Page 32
the Group remained strong with
£698.3 million being generated from
operating activities before tax.
Net capital expenditure for
the year of £378.6 million was at
a higher level than last year as the
businesses expand and improve
their store portfolios and supporting
infrastructure. The Group also made
acquisitions resulting in a cash outflow
of £365.0 million.
Capital expenditure and
company acquisition investments are
assessed by discounting expected
future cash flows using the Group’s
weighted average cost of capital
(WACC). Authorisation is required
by the Group’s Capital Investment
Committee and the Board depending
on the size and nature of investment
opportunities. Retrospective annual
reviews are performed to measure
the subsequent performance of
approved investments.
Treasury risk management
The main financial risks faced by the
Group and managed by Treasury are
funding risk, interest rate risk and
currency risk. The Board regularly
reviews these risks and approves
written Treasury policies covering
the use of financial instruments to
manage these risks.
Liquidity and funding
Net borrowings peaked during the
run-up to Christmas trading when
stocks were at their highest levels.
This was covered by committed
funding and readily available cash,
although in practice a large part was
financed by bills of exchange.
Treasury ensures the Group has
sufficient secure financial resources
to enable the Group to meet its
business objectives.
The Group’s committed facilities
comprise £400 million expiring
January 2003, £21.1 million during
2002, £5.3 million during 2001 and
£473.2 million expiring prior to
January 2000. The total amount
drawn under these facilities at the
balance sheet date was £247.1 million.
R8072 pp31-35
5/5/99 2:11 pm
Page 33
The facilities due to mature during
1999 are working capital facilities,
whereas the facilities due to mature
in future years are general purpose
facilities.
The Group’s objective for debt
maturities is to ensure that the
amount of debt maturing in any year
is not beyond the Group’s means
to repay or refinance. In addition to
these committed facilities the Group
has significant uncommitted facilities,
and asset and liability positions of
the Group.
The interest rate exposure of the
Group arising from its borrowing and
deposits is managed by the use of
fixed and floating rate debt, interest
rate swaps and interest futures. The
majority of the Group’s borrowings
are retained at floating rates of
interest, thereby providing a natural
hedge against short-term fluctuations
in economic conditions.
Earnings per share before exceptional items increased by
8.2 per cent to 29.9p and after exceptional items basic earnings
per share increased by 12.5 per cent to 32.3p
principally utilised in the form of
bankers’ acceptances.
The funding drawn under the
securitisation programme, established
in 1996, to finance part of the
receivables of Time Retail Finance has
averaged £182.1 million throughout
the year. Kingfisher issued a ten-year
Eurosterling bond in February 1997
which raised £200 million and carries
a coupon of 8.125 per cent.
The Group has long-term A
credit ratings from Standard & Poor’s
and FitchIBCA and an F1 short-term
credit rating from FitchIBCA.
Interest
Net interest payable decreased by
£3.4 million from £13.3 million to
£9.9 million, reflecting continued strong
cash generation throughout the Group,
offset in part by the investment in new
companies towards the end of the
financial year. The Group’s borrowings
were kept mainly at floating rates of
interest during the year.
Interest rate and currency risk
management
Interest rate and foreign currency
policies provide a degree of flexibility,
whilst ensuring that the overall
level of risk is maintained within
agreed limits. Treasury activity relates
solely to the underlying cash flows
The Group’s foreign exchange
exposure policy requires subsidiaries
to hedge committed transactional
currency exposures against their
functional currency. Exposures are
concentrated through the use of
market-related transactions between
subsidiaries and Halcyon Finance
Limited, a Treasury company.
Capital Treasury manages the
activity of Halcyon Finance, whose
Board includes Kingfisher’s Group
Finance Director and Company
Secretary.
The Group’s policy is to ensure
that when a Group company enters
into a commercial contract the
Group is protected against the
potential impact of adverse currency
movements. Halcyon Finance Limited
fulfils this policy objective by entering
into currency instruments, generally
comprising forward contracts and
currency options, to hedge the
Group’s net exposures.
The Group does not seek to
hedge the impact of exchange rate
movements on reported profits. The
Group seeks to manage the translation
exposure of its major overseas assets
through adjusting the mix of currencies
in which it denominates its funding. The
Group aims to fund overseas operations
with borrowings denominated in their
functional currency.
Page 33
33
R8072 pp31-35
5/5/99 2:11 pm
Page 34
Financial review continued
Use and fair value of financial
instruments
In the normal course of business the
Group uses financial instruments,
including derivative financial
instruments, which are held off
balance sheet.
The main types of financial
instruments used are bankers’
acceptances, loans and deposits,
interest rate swaps, interest rate
options, interest rate futures, spot
and forward currency contracts, and
currency options.
The fair value is defined as
the amount for which a financial
instrument could be exchanged in
an arm’s-length transaction between
informed and willing parties, excluding
accrued interest, and is calculated by
reference to market rates discounted
to current value. All debt and
investments with a maturity of less
than three months after the balance
sheet date are assumed to have a fair
value equal to their book value.
and Excise. Following a Court
of Appeal ruling, the accrual is no
longer required.
Taxation
The overall rate for the year increased
from 25.6 per cent to 29.2 per cent.
As we anticipated last year, the level
of release in prior year provisions
was not repeated in the year to
30 January 1999. The rate on current
year profits before prior year
adjustments was 30 per cent, down
from 30.8 per cent, mainly because
the statutory rates in the UK and
France have reduced slightly. Next
year, the overall rate is expected to
rise to around 30 per cent.
Mergers and acquisitions
DIY sector
On 18 December 1998, the Group
completed the combination of B&Q
and Castorama. The transaction has
been treated as an acquisition and was
effected by the transfer by the Group
On 18 December 1998, the Group completed the combination
of B&Q and Castorama in the DIY sector. The electrical sector
also expanded with investment in Wegert, in Germany, and
BUT S.A., in France
Credit risk
The Group controls credit risk by
setting counterparty credit limits by
reference to published rating agency
credit ratings. Treasury Policy
recognises that an exposure to a
counterparty arises in relation to
both derivative and non derivative
financial instruments. Interest rate
futures are with organised exchanges.
Exceptional items
The exceptional other operating
income of £44.7 million represents
the release of an accrual for VAT
on outstanding credit balances as
at 28 February 1997 following the
withdrawal of the Standard Method
of Gross Takings by HM Customs
34
Page 34
of its 100 per cent interest in B&Q in
exchange for a 57.9 per cent interest
(54.6 per cent on a fully diluted basis)
in the consequently enlarged
Castorama Group. The transaction
was effected by an exchange of shares,
being new shares in Castorama for
the Group’s shares in B&Q, and book
value of the 42.1 per cent of the net
assets of B&Q at the date of acquisition
of Castorama has been treated as
the cost of that investment. The
difference between the consideration
and the fair value of the Castorama
net assets received has been treated
as a non-distributable reserve.
On 4 November 1998 the Group
completed the initial purchase of a
controlling interest in NOMI, a Polish
R8072 pp31-35
5/5/99 2:11 pm
Page 35
DIY retailer. Following a further
shareholder offer, the Group’s
interest increased to 66.7 per cent,
taking the total consideration to
£10.5 million.
Electrical sector
On 29 June 1998 the Group acquired
a 60 per cent interest in Wegert, a
German electrical retailer, for a
consideration of £52.0 million.
Simultaneously, Wegert purchased
the entire share capital of the
German electrical retailer ProMarkt
Holding GmbH using cash from its
own resources for the equivalent of
£14.5 million.
On 24 September 1998 the
Group increased its shareholdings
in BUT S.A., a major French
furniture and electrical retailer, from
26 per cent to 61.7 per cent. After
a subsequent public offer terminating
on 13 October 1998 and purchases
in the market, the Group further
increased its holding to 98.2 per cent.
On 28 October 1998 the Group
completed the purchase of Electric
City, a Singaporean electrical retailer,
for a consideration of £4.6 million.
General merchandise
On 6 November 1998 the Group
acquired VCI plc, the UK publishing
and distribution Group. Total
consideration for 100 per cent of
the shares was £46.8 million.
Going concern
The directors confirm that, after
making enquiries, they have a
reasonable expectation that the
Group has adequate resources to
continue in operational existence
for the foreseeable future. For this
reason they continue to adopt the
going concern basis in preparing
these accounts.
Euro
In preparation for the introduction of
the Euro, the Group has established
a Euro Project Team, responsible
to the Group Finance Director, which
has commenced preparations
throughout the Group. Steering
Groups in each Group company
continue to review the practical
implications and strategic
opportunities or threats of the Euro
to refine their implementation plans,
update the project critical path and to
raise awareness of the issues. Progress
continues within the timescales set
around the Group and operations
in the UK will draw upon the
practical experiences of our other
European operations.
Year 2000
The Group is advanced in its plans for
Year 2000. A full-time manager is
responsible to the Group Finance
Director for ensuring that risks have
been identified, that plans exist to
address them and that those plans
are being followed. Work on internal
computer systems has been largely
completed this year, and work on
supply chain and embedded systems
will continue during 1999. The major
risks and uncertainties are those
common to all companies and relate
to our dependence upon a successful
and timely completion of Year 2000
programmes by other commercial
entities and government bodies.
Our plans to address these include
monitoring of such organisations
and contingency planning. We are
confident that as a result of our
preparations all of our businesses
will trade successfully through the
millennium period and beyond.
The Group has continued to
charge the costs of rendering existing
software Year 2000 compliant to the
profit and loss account as they are
incurred. These costs amounted to
£11.2 million (1998: £3.3 million),
with a further £12 million forecast
to be spent in future.
The Group complies fully with the
accounting principles and disclosure
requirements of these standards.
In the case of FRS 10 “Goodwill
and Intangible Assets”, the new
requirements to recognise acquisition
goodwill on the balance sheet,
rather than immediate write off
against reserves, has been adopted.
Consequently, the Group has
£264.5 million of capitalised goodwill
at the year end. With the exception
of goodwill arising on the acquisition
of BUT, all acquisitions in 1998 are
considered to have a useful economic
life of at least 20 years. In the case of
BUT the Group believes that its
proven ability to maintain market
leadership and barriers to entry into
its market mean its goodwill is
durable. Accordingly, no amortisation
is required. Taking this into account
the profit and loss account includes
a charge of £2.3 million, reflecting
the amortisation of goodwill. For
acquisitions prior to 31 January 1998,
goodwill of £1,541.2 million remains
written off against reserves.
Accounting policies and
standards
During 1998 two accounting
standards came into effect, FRS 9 and
FRS 10. In addition, the Accounting
Standards Board issued four new
standards, FRS 11 to FRS 14.
Page 35
35
R8072 pp36-37
5/5/99 2:13 pm
Page 36
Social responsibility
Kingfisher maintained a strong
commitment to social and
environmental issues during the year.
Our charitable donations and support
for local communities in cash, kind or
resources were worth £1.7 million.
Staff fund-raising contributed another
£567,000.
We continued to support the
charitable work of organisations
working on behalf of children, single
mothers, cancer victims and the
elderly, among others. Beneficiaries
included the National Council for
One Parent Families, Barnados and
Age Concern.
Helping young people plays a
major part of Kingfisher’s social
responsibility programme. You see
this in Darty’s ENVIE programme to
train the young unemployed to repair
and re-assemble electrical goods, and
Woolworths’ support for Barnardo’s
and Whizzkids, the charity which
supplies mobility aids to disabled
children.
Encouraging the spirit of
Support in the community saw direct
action from Entertainment UK’s staff
who bought a new minibus for pupils
with learning difficulties. MVC funded
the Children’s Foundation “Yellow
Brick Road” appeal and donated books
to the children’s wards at Hull Royal
Infirmary and St Richard’s Hospital in
Chichester. Chartwell Land created a
sensory garden for children with
special needs in Glasgow in addition
to donating land for a crèche and
women’s centre in Watford.
community
Shanice Brown, whose quick thinking saved
a woman’s life during a house fire, won a
“Woolies Best Kid” award and was invited to
open the brand-new store in her Colchester
home town
Top and above, Basics Plus, a charity for physically
and mentally disabled students, and Bradford City
Farm were both chosen for a B&Q/Daily Express
£10,000 Community Project Award
36
Page 36
y
R8072 pp36-37
5/5/99 2:13 pm
Page 37
Comet introduced its “Comet in the
Community” initiative, which raised
funds for national and local good
causes, including a home campaign to
encourage the safe use of electrical
appliances. With Home Office and
police support, Comet launched a
crime prevention programme to
provide advice to customers on how
to protect their homes and property.
Care and support for the elderly
was also promoted in Kingfisher’s
community programmes. B&Q
carried through its training
programme of Age Concern
volunteers who undertook basic DIY
tasks in the homes of the elderly.
The B&Q/Daily Express Community
Awards also provided four local
community organisations with awards
of £10,000 each.
We also continue to be active
members of Business in the
Community and support equal
opportunity rights through
Opportunity 2000.
Kingfisher companies are working
in partnership with Forum for the
Future to reduce the environmental
impact of the products we sell both
at home and abroad. Following a
review of our environmental
programme we have formed a new
Kingfisher Environment Forum to act
as a “think tank” on Group-wide
environmental issues. The Forum is
chaired by B&Q’s Dr Alan Knight,
OBE, and makes policy
recommendations to the Board’s
Social Responsibility Committee.
Kingfisher is on track to meet
its self-assessed targets on key
environmental issues such as waste
management, supplier auditing,
property and working conditions for
those in developing countries.
Kingfisher companies continue to
buy products on a global scale and
are working together to ensure that
manufacturers achieve improvements
in environmental performance and
have acceptable standards of
employment and health and safety.
Left, MVC supported a children’s foundation
appeal and donated books to children’s
hospital wards
Below, Comet community initiatives included
a Safety in the Home campaign aimed at
encouraging the safe use of electrical appliances
Above, Superdrug Managing Director, Jim Glover,
hands over a hefty cheque in support of Breast
Cancer Care
Above left, employees at EUK raised money for a
school minibus for children with learning difficulties
Page 37
37
R8072 pp38-39
5/5/99 4:26 pm
Page 38
Michael Hepher
Philippe Francès
Ronald Goldstein
John Bullock
Roger Holmes
Jean-Hugues Loyez
Sir John Banham
The Lady Howe
Philip Rowley
Directors
Sir John Banham * ■ ★ ♠
Appointed non-executive director in October
1995 and Chairman in February 1996, and
chaired the Audit Committee until 3 April
1998. Director General of the CBI between
1987 and 1992; the first Controller of the
Audit Commission and former director of
McKinsey & Co; Chairman of Tarmac PLC,
ECI Ventures Limited and non-executive
director of Amvescap PLC, ECI Ventures Ltd
and The Merchants Trust PLC. Age 58.
Sir Geoffrey Mulcahy ● ♠ ★ ✠
Chief Executive since January 1995, previously
Group Managing Director. Ex-Finance Director
of British Sugar plc and Norton Abrasives.
Began his career with Esso plc; non-executive
director of BNP UK Holdings Ltd and Bass plc.
Graduate of Manchester University; MBA
Harvard Business School. Age 57.
38
John Bullock * ■ ♠
Appointed non-executive director in 1993,
Chairman of the Finance Committee until
3 April 1998. Appointed Chairman of the Audit
Committee on 3 April 1998. Former Joint
Senior Partner, Coopers & Lybrand UK and
Chairman, Coopers & Lybrand Europe. FCA,
FCMA, FIMC. Non-executive director of British
Energy Plc. Age 65.
Peter Hardy * ■ ♠
Appointed non-executive director in 1992.
A former Managing Director (Investment
Banking) of S G Warburg Group. Nonexecutive director of Land Securities PLC,
Foreign & Colonial PEP Investment Trust PLC,
Howard de Walden Estates Limited, Fairview
Holdings plc and a director of Barnardo’s.
Age 60.
Philippe Francès ●
Appointed Director in 1994. Appointed Chief
Executive of Kingfisher Electrical Retailing
Limited (KERL) in 1993. Chief Executive of
Darty (1986–1993). Before that held senior
positions within the Darty Group since joining
in 1973. Previously at Schneider-Laden, part of
the Philips Group. Director of BUT S.A. Age 59.
Michael Hepher * ■ 1
Non-executive director of Canada Life and
former Chairman and Chief Executive of
Charterhouse plc and non-executive director
of Diageo plc. Age 55.
Ronald Goldstein *
Non-executive director since 1990, Board
member since 1987. Joint Chairman and
Managing Director of Superdrug (1966–1989).
Age 62.
Page 38
Roger Holmes ● ✠ 1
Appointed director in February 1998.
Appointed Managing Director of Woolworths
in February 1998. Previously Deputy Managing
Director of Woolworths and before that
B&Q’s Finance Director. Previously a partner
of McKinsey & Co. Age 39.
R8072 pp38-39
5/5/99 4:27 pm
Page 39
Peter Hardy
Anthony Percival
Bernard Thiolon
Margaret Salmon
ham
Sir Geoffrey Mulcahy
The Lady Howe ★
Until recently chaired The BOC Foundation
for the Environment and the Broadcasting
Standards Commission. Served as Deputy
Chair of the Equal Opportunities Commission.
Age 67.
Jean-Hugues Loyez ●
Appointed director in December 1998,
following the B&Q/Castorama merger.
He is Chief Executive of Castorama Dubois
Investissements S.C.A. and also conseiller of
the Banque de France and an Administrateur
of Credit du Nord. Age 50.
Anthony Percival ✠
Appointed as acting Finance Director in
February 1995 and joined the Board in
June 1995. He is a Chartered Accountant
and former partner of Coopers & Lybrand.
Non-executive director of the British Standards
Institution and The Royal London Mutual
Insurance Society. Age 59.
Philip Rowley ● ✠ 2
Appointed director in August 1998; Group
Finance Director since October 1998. Former
Executive Vice-President and Chief Financial
Officer of EMI Music Worldwide. FCA. Age 46.
* Audit Committee
■ Remuneration Committee
★ Social Responsibility Committee
✠ Finance Committee
♠ Nomination Committee
● Kingfisher executive directors
Margaret Salmon ★ ♠ 1
She is Director of Personnel of the BBC.
Trustee of Our Daughters Charitable Trust
and the BBC Pension Trust Ltd. Age 51.
Bernard Thiolon
Appointed non-executive director in June 1993
following the Darty merger. Formerly President
of Banque Colbert and Adviser to the
Chairman and Honorary General Manager of
Crédit Lyonnais Group, Director of Crédit
d’Equipement des PME. Age 70.
1
2
Appointed to Committee 3 April 1998
Appointed to Committee 9 October 1998
On 3 April 1998 John Bullock and Peter Hardy
ceased to be members of the Remuneration
Committee and The Lady Howe and Bernard
Thiolon ceased to be members of the Audit
Committee.
The Board considers that all the non-executive
directors fulfil the requirements for
independent directors as defined by the
Combined Code.
Page 39
39
R8072 pp40
5/5/99 2:14 pm
Page 40
Financial contents
41 Directors’ report
54 Consolidated profit and loss account
55 Balance sheets
56 Consolidated cash flow statement
57 Consolidated statement of total
recognised gains and losses
57 Note of Group historical cost profits
58 Notes to the accounts
89 Statement of the directors’
responsibilities
90 Report of the auditors to the members
of Kingfisher plc
91 Kingfisher plc five-year history
92 Shareholder information
94 Notice of annual general meeting
96 Index
40
Page 40
R8072 pp41-53
5/5/99 1:47 pm
Page 41
Directors’ report
For the financial year ended 30 January 1999
The directors are pleased to present their report and the consolidated financial statements of the Company and its subsidiaries for the
financial year ended 30 January 1999.
Principal activities
The Group trades principally as retailers in stores in the United Kingdom through the B&Q, Comet, Superdrug and Woolworths chains,
in France through the BUT, Castorama and Darty chains, in Belgium through New Vanden Borre, in Germany through the ProMarkt
and Castorama chains, in Holland through BCC, and in Poland through NOMI and Castorama. In addition, the Group has extensive
interests in property, which are actively managed through Chartwell Land.
Review of activities
A detailed review of the Group’s activities and of future developments is contained within the Chief Executive’s review on pages 6 to 11.
Results and dividends
The profit on ordinary activities of the Group before taxation amounted to £629.3m (1998: £520.0m) and after taxation to £445.8m
(1998: £386.9m).
Out of this profit, the directors recommend the payment on 1 July 1999 of a final dividend of 9.25p (1998: 8.25p) per ordinary share
(£125.2m, 1998: £111.7m) which together with the interim dividend of 3.75p (1998: 3.25p) per ordinary share (£50.8m, 1998: £43.9m)
paid on 20 November 1998 makes a total for the year of 13p (1998: 11.5p) per ordinary share (£176.0m, 1998: £155.6m). After
eliminating dividends payable to the Group’s Employee Share Ownership Plan Trust (ESOP) the dividend charged to the profit and loss
account is £175.3m (1998: £155.1m). The dividend figures for 1998 have also been adjusted to reflect the sub-division on 2 July 1998 of
the ordinary shares of 25p each in the capital of the Company into two ordinary shares of 12.5p each. A scrip dividend alternative was
offered to shareholders in respect of the interim dividend and will also be offered in respect of the final dividend. The directors
propose to transfer the retained profit of £261.6m (1998: £231.3m) to reserves.
Merger with Castorama
The merger of B&Q plc with Castorama Dubois Investissements S.C.A. detailed in the circular to shareholders dated 20 November
1998 was completed on 18 December 1998. Under the terms of the merger, 100% of the equity capital of B&Q was transferred to
the Castorama Group in exchange for 54.6% of the fully diluted share capital of Castorama Dubois Investissements S.C.A.
Acquisitions and disposals
On 6 April 1998, the Group acquired 100% of the equity capital of F-Beat Records Limited, the owner of certain music recording rights,
for a cash consideration of £1.95m.
On 23 June 1998, an agreement was signed that enabled Kingfisher to acquire a controlling interest in BUT S.A., as a result of which
Kingfisher’s holding in the company increased to 61.7% on 24 September 1998. Following a subsequent public offer and purchases in
the market, at 30 January 1999 Kingfisher plc held 98.2% of BUT S.A.’s issued share capital. The consideration for these purchases was
£221.2m.
On 29 June 1998, Kingfisher plc completed its purchase of a 60% stake in Wegert-Verwaltungs GmbH & Co. Beteiligungs-KG (Wegert),
for a consideration of £52.0m. Simultaneously Wegert purchased the entire share capital of the German electrical retailer Promarkt
Holding GmbH using cash from its own resources for the equivalent of £14.5m.
On 28 October 1998, Kingfisher plc completed the acquisition of 100% of the equity capital of Electric City (Singapore) Pte Limited one
of the largest electrical retail chains in Singapore, for a consideration of £4.6m.
On 4 November 1998, the Group completed the initial purchase of a controlling interest in NOMI S.A., one of the largest DIY retailers
in Poland. Following a further shareholder offer, the Group’s interest increased to 66.7% of the equity capital of NOMI S.A., taking the
total consideration for the purchase to £10.5m.
On 6 November 1998, following a public offer, Kingfisher plc completed the purchase of 100% of the equity capital of the cross-media
publishing and distribution group VCI plc, for a consideration of £46.8m.
Page 41
41
R8072 pp41-53
5/5/99 1:47 pm
Page 42
Directors’ report continued
On 30 December 1998 Kingfisher conditionally acquired 100% of the issued shares of ProMarkt GmbH & Co. KG, an electrical retailer
with stores in Germany and Austria, for a provisional consideration which is subject to finalisation of a completion balance sheet and
is estimated at £9.2m.
Directors
The directors of the Company are shown on pages 38 and 39. Roger Jones and James Hodkinson were directors during the year but
resigned on 31 March and 15 April 1998 respectively.
Roger Holmes was appointed as a director of the Company on 9 February 1998. Philip Rowley was appointed as Finance Director on
3 August 1998, and Jean-Hugues Loyez was appointed as a director of the Company with effect from 18 December 1998.
In accordance with Article 85 of the Articles of Association, Philip Rowley and Jean-Hugues Loyez hold office only until the annual
general meeting and, being eligible, offer themselves for re-election. In accordance with Article 79 of the Articles of Association,
Anthony Percival, Sir John Banham, Sir Geoffrey Mulcahy and John Bullock retire by rotation at the annual general meeting and being
eligible, offer themselves for re-election. Other than Anthony Percival and Sir Geoffrey Mulcahy, the directors offering themselves for
re-election by rotation do not have service contracts with the Company.
The Company has received special notice in accordance with section 293 of the Companies Act 1985, of the intention to propose the
re-election of Bernard Thiolon, who attained the age of 70 years on 24 February 1999, as a director of the Company. Accordingly in
the notice of the annual general meeting there is a resolution proposing to reappoint Bernard Thiolon as director for a further year.
Directors’ interests
The directors’ interests in shares of the Company and Castorama Dubois Investissement S.C.A. are shown under the Remuneration
Report on pages 49 to 51. No director has any interest in any shares or loan stock of any other Group company other than a small
number of shares held by certain directors in French subsidiaries of the Company as a result of the French company law requirement
that directors hold “qualifying” shares.
No director other than Jean-Hugues Loyez was or is materially interested in any contract, other than his service contract, subsisting
during or at the end of the financial year which was significant in relation to the Group’s business. As a Commandité of Castorama
Dubois Investissements S.C.A. (“CDI”) he has 13,105 special shares which under the Articles of CDI entitle him to a 0.13105% share
of 1% of the annual distributable profits of CDI. As Chairman of the Management Board of CDI, he is entitled to a portion of the net
operating profits of CDI as remuneration for his services. This payment amounts to 1.2 x one-sixth of 1% of these profits. He is also
entitled as a Commandité to 0.378% of CDI’s then issued share capital on transformation of CDI to a Société Anonyme. The share
of profits is included in the total remuneration shown for Jean-Hugues in the Remuneration Report on page 48.
Corporate governance – combined code statement
Kingfisher recognises the importance of, and is committed to, high standards of corporate governance. The principles of good
governance adopted by the Group have been applied in the following way:
Directors
The Kingfisher Board currently comprises the Chairman, the Chief Executive, five other executive directors and seven non-executive
directors. Their biographies appear on pages 38 and 39 and illustrate the directors’ range of experience, which ensures an effective
board to lead and control the Group. All directors have access to the Company Secretary and may take independent professional
advice at the Group’s expense. Non-executive directors are appointed for an initial term of three years and each director receives
appropriate training on appointment and subsequently as necessary.
The Board meets not less than 11 times a year and has adopted a schedule of matters reserved for its decision. It is primarily
responsible for the strategic direction of the Group. All directors have full and timely access to information. This year for the first time,
the Board has undertaken a review of its own effectiveness. It is their intention to repeat this process on a regular basis.
42
Page 42
R8072 pp41-53
5/5/99 1:47 pm
Page 43
The Board has established five standing committees with defined terms of reference as follows:
• The Audit Committee comprises not less than three independent non-executive directors and currently has five non-executive
directors. This committee is responsible for providing an independent oversight of the Group’s systems of internal control and financial
reporting processes. Each of our UK major operating businesses is a substantial size and each has its own audit committee, which is
attended by both Kingfisher’s internal auditor and the external auditors.
• The Nomination Committee comprises the Chairman, Chief Executive and three non-executive directors and is responsible for the
consideration of and recommendation for the appointment of new directors.
• The Remuneration Committee comprises the Chairman and three other independent non-executive directors and advises the Board
on the Company’s executive remuneration policy and its costs and, on behalf of the Board, the application of this policy to the
remuneration and benefits of executive directors and certain senior executives. The Remuneration Report on pages 45 to 48 contains
a more detailed description of the Group’s policy and procedures in relation to directors’ and officers’ remuneration.
• The Finance Committee comprises the Chief Executive and three executive directors and is responsible for the approval and
authorisation of financing documents within its terms of reference and the authority limits laid down by the Board. On behalf of the
Board, it reviews borrowing arrangements and other financial transactions, and makes appropriate recommendations. It also allots new
shares in the Company to Group employees following the exercise of share options.
• The Social Responsibility Committee comprises representatives of the operating companies and at least one executive director and one
non-executive director. This committee is responsible for discussing and developing a general policy relating to environmental,
community and equal opportunities matters.
Re-election of directors
The Articles of Association require one third of the Board to retire and submit themselves for re-election each year. At the present
time no director will have held office for more than three years since his last election or re-election. Details of appointments during the
year and directors submitting themselves for re-election are shown on page 42.
Directors’ remuneration
The Remuneration Committee makes recommendations to the Board for ensuring that the directors’ remuneration is sufficient to
attract and retain the directors needed to run the Group successfully. Full details of individual directors’ remuneration is shown on
pages 48 and 49.
Relations with shareholders
Kingfisher maintains an active dialogue with its shareholders through a planned programme of investor relations. This activity is a key
component of its corporate communications programme and is headed by the Director of Corporate Affairs.
The programme includes formal presentations in both London and Paris of full-year and interim results, trading statements on three
other occasions during the year and meetings between institutional investors and senior management on a regular basis.
Regular communication with shareholders also takes place through the Annual and Interim Reports and via the company web-site
(www.kingfisher.co.uk).
The annual general meeting is used as an important opportunity for communication with both institutional and private shareholders,
including a short presentation on the business and its latest trading position.
Page 43
43
R8072 pp41-53
5/5/99 1:47 pm
Page 44
Accountability and audit
Going concern
A statement in accordance with the going concern principle is included in the financial review on page 35 of the annual report.
Internal control
In reporting on provision D.2.1. of the Combined Code, the Group has adopted the approach the London Stock Exchange has allowed
all listed companies to take in its letter of 10 December 1998.
In accordance with the Internal Control and Financial Reporting guidance the directors acknowledge their responsibility for the Group’s
system of internal financial control. The system can provide only reasonable and not absolute assurance of the safeguarding of assets
against unauthorised use or disposition, the maintenance of proper accounting records and the reliability of financial information used
within the business or for publication. The key procedures in place to enable this responsibility to be discharged are as follows:
• the business head of each operating company is clearly accountable for establishing and monitoring internal financial controls within that
company;
• the Board reviews the strategies of the operating companies;
• the Board has established policies on investment appraisal and treasury operations;
• a Code of Conduct for senior employees and others, as appropriate, is issued throughout the Group which includes, amongst other
things, behavioural guidelines for those involved in buying decisions on behalf of the Group;
• annual budgeting and regular forecasting processes are in place and provide the basis on which monthly reports are prepared for
review by the Board, and
• the Group is subject to regular internal audit, and the plans and activities of the internal audit departments in the Group are reviewed
by the Audit Committee, together with the management letters prepared by the external auditors, PricewaterhouseCoopers.
The Group has established a process of review and certification by the business heads of each operating company. They identify with
their senior managers the business risks most important to their company, consider the financial implications and assess the
effectiveness of the control processes in place to mitigate against these risks. This process, together with direct involvement with the
key procedures noted above, enables the directors to confirm that they have reviewed the effectiveness of the system of internal
financial control of the Group.
Compliance with the combined code
During the year ended 30 January 1999, the Group complied with the requirements of the Combined Code other than as follows:
• there is no “recognised” identified senior independent non-executive director other than the Chairman. The Board considered the
appointment of a senior member and determined that this could be divisive;
• during the year the Group acquired a number of subsidiary companies including Wegert-Verwaltungs GmbH & Co. Beteiligungs-KG,
BUT S.A., VCI plc, NOMI S.A. and Castorama Dubois Investissements S.C.A. The Group is identifying any additional procedures which
may be necessary to bring these companies within the Group’s governance procedures;
• all UK executive directors have service contracts which are terminable by the Group with two years’ notice. The Board believes that it
is in the best interests of shareholders to retain key executive directors while providing certainty and facilitating a speedy and clean
break on early termination by agreeing liquidated damages which reflect a discount to take account of an agreed level of mitigation, and
• the Combined Code was published in June 1998 requiring companies to count all proxies and indicate the level of proxies lodged on
each resolution. The Company’s 1998 annual general meeting was held in May, when this requirement was not in place and this
information was not, therefore, provided. However, at a subsequent extraordinary general meeting, following the publication of the
Code, details of proxies were given and will be given at all future meetings. For the same reason, the Board had not considered
whether the remuneration policy should be submitted for approval by shareholders at the Company’s 1998 annual general meeting.
44
Page 44
R8072 pp41-53
5/5/99 1:47 pm
Page 45
Remuneration report
Remuneration committee
The Board is advised on remuneration matters by the Remuneration Committee.
The Remuneration Committee consists of non-executive directors, currently Sir John Banham (Chairman), Peter Hardy, John Bullock
and Michael Hepher.
The Committee’s aim is to ensure that the executive directors are rewarded for their contribution to the Group and motivated to
enhance the return to shareholders. The Remuneration Committee advises the Board on remuneration policy for executive directors
and applies it in relation to the remuneration packages of individual executive directors.
The Committee is advised internally by the Group Director of Human Resources, supported by the Director of Resourcing & Reward
and the Head of Group Benefits. External advice is sought from a range of consultants on specific issues, but principally from Towers
Perrin and from the Monks Partnership.
Remuneration policy
It is intended that executive director remuneration should be positioned in the upper quartile for the marketplace. This is designed to
ensure business success through the recruitment, retention and motivation of the highest quality executives. The policy is consistent
across the remuneration of executive directors and senior managers within the Group.
Executive directors’ basic salaries are positioned as upper quartile and are then supplemented by variable rewards at a level consistent
with market practice. They are governed by performance conditions to ensure that maximum variable rewards are paid only for
exceptional performance.
This remuneration package is aligned with shareholders’ interests through an annual bonus scheme which is based on an earnings per
share formula; a long-term incentive scheme which is based on total shareholder return and through the provision of share options to
executive directors.
Any major changes in remuneration policy will be tabled for shareholder approval and lesser changes will be discussed with the
Company’s principal shareholders. There were no major changes to the Group’s remuneration policy during the year.
Components of remuneration
Salaries and benefits
Salaries are reviewed annually in August in the context of: market conditions affecting executive remuneration; affordability; the level of
increases awarded to staff throughout the business, and the need to reflect the individual’s contribution.
In addition to salaries and the items described below, the Company provides a range of competitive benefits, the most significant of
which is a fully-expensed car.
Annual bonus
Bonus awards are assessed against a wide range of corporate, business and individual objectives, reflecting particularly those factors that
are measurable and which are drivers of shareholder value.
For executive directors at the Group level, annual bonus is based on earnings per share growth averaged over three years. For those
executive directors who have a major responsibility for specific businesses, a significant proportion of their bonus is derived from the
performance achieved by that business against targets set at the beginning of the year, based on both financial and non-financial
objectives. A similar basis is applied to their colleagues on the respective boards.
It is anticipated that annual bonuses will be 30% for achieving target, with higher performance leading to a higher bonus.
Bonuses are non-pensionable.
Page 45
45
R8072 pp41-53
5/5/99 1:47 pm
Page 46
Long-term rewards
Share options
The Company has share option schemes for senior managers both in the UK and overseas. A UK savings-related share option scheme
(Sharesave) is open to all eligible employees. In addition, a phantom share option scheme, which in all respects operates as other share
option plans but is cash rather than share based, is selectively used where the share option scheme is inappropriate, for instance, for
employees on overseas secondments.
At present, executive share options of up to four times annual salary and bonus (excluding any long-term incentive payments), are
granted to executive directors, usually spread over a three-year period. For other senior managers, options are granted annually as a
percentage of the individual’s basic salary, ranging from 50% to 135%, depending on their seniority within the Group and subject to an
overall limit on options unexercised of four times salary and bonus.
Options can be exercised after they have been held for a minimum period of three years. Options granted since 1996 are subject to
earnings per share growth being at least 6% above RPI over three years.
The granting of options to executive directors and other senior managers on an annual basis ensures that any reward is spread over
a number of years, is allied to the growth in share value over the long term and avoids substantial fortuitous one-off gains. However,
the limit on unexercised options acts as an encouragement to executives to exercise options in order to receive further grants. The
Company believes that the removal of this limit, allied to the introduction of a shareholding requirement, would encourage managers
either to leave their options unexercised or to retain their shares for longer periods. Accordingly, we are actively examining the
introduction of a revised scheme for executive directors and senior managers which will more effectively align their rewards with the
interests of shareholders.
Long-term incentives
Executive directors and certain senior Group managers participate in an incentive plan linked to increasing total shareholder return
compared to a peer group of companies.
Each year a three-year performance cycle commences. For each three-year period commencing February 1996, 1997, 1998 and 1999,
the Company’s total shareholder return (share price movement plus re-invested dividend) is measured against that of 15 retail
companies as selected by the Remuneration Committee. Provided that the Company’s performance places it in the top half of this peer
group, the reward would range from 30% to a maximum of 70% of basic salary. For the periods commencing February 2000 onwards,
the 70% maximum will be payable if the company is ranked within the top three of its peer group. One third of the bonus award will
be paid in cash with the remainder used to purchase shares which could only be realised over a further two years.
At the year end, the 1996/99 Plan matured with the Company ranked first in its peer group, having achieved a total shareholder return
of over 150%. A bonus of 70% of salary was allocated to Sir Geoffrey Mulcahy and Roger Jones of which a third was paid in March 1999,
with the remaining two-thirds used to purchase shares – half of which can be realised in March 2000 and half in March 2001.
Bonus awards normally lapse on termination of employment, although an exception was made in James Hodkinson’s case due to his
contribution to the Group’s success. James Hodkinson was allocated a bonus representing two-thirds of the 70% maximum award,
payment of which will be phased as set out above. He will also receive one-third of any award under the 1997/2000 Plan.
The Company is currently also ranked first in its peer group for the 1997/2000 and the 1998/2001 Plans with total shareholder returns
of 124% and 75% respectively.
Separate arrangements exist for senior managers at operating company level, where an incentive plan rewards growth in value as
measured by economic profit (operating profit less a capital charge), with payments deferred for three years, then paid in three cash
instalments. The only potential payments to executive directors under this scheme are to Roger Holmes, which were allocated before
his appointment to the Board. These amount to 132% of salary with payments phased over four years from 2000.
Prior to the current arrangements, a long-term incentive scheme existed for directors and other senior managers of the Group. Each
year, depending on the performance of the Group, the Remuneration Committee allocated a percentage of base salary which was
46
Page 46
R8072 pp41-53
5/5/99 1:47 pm
Page 47
increased at the end of three years by the percentage increase in earnings per share in excess of 5% per annum. Payments were then
made in three annual instalments. The only potential payment remaining to executive directors under this scheme due in 2000 is 11% of
salary in respect of Roger Holmes.
None of these payments are pensionable.
Pensions
UK executive directors who joined the Company before 1994 are members of funded pension arrangements providing a pension on
retirement at age 60 of up to two-thirds of basic salary only (except for the Chief Executive, where the pension is based on 107% of
basic salary), subject to a minimum of 20 years’ service within the Group. In the event of death during employment dependants receive
a pension and a lump sum.
Roger Holmes and Philip Rowley joined the Company after 1994 and are members of the main funded pension arrangement available
to all UK employees, which provides a pension on retirement at age 60 of 1/60th of basic salary (limited to the “earnings cap” –
currently £90,600) for each year of service, together with life assurance and dependants’ benefits payable on the member’s death.
A salary supplement is paid in addition on salary in excess of the earnings cap to compensate for pensionable salary under the main
scheme being capped (17% for Philip Rowley and 9% for Roger Holmes). The rates, which depend on age at joining, are calculated to
provide broadly comparable benefits to those which the main scheme would have provided, but for the “earnings cap”, when combined
with the scheme benefits and the savings in members’ contributions. There are no Company arrangements for Anthony Percival.
The table below shows the accrued pension should the director leave employment, the increase in the accrued pension during the year
excluding inflation and the value of the increase in accrued pension assessed on the transfer value basis under the Kingfisher Pension
Scheme. The figures in respect of James Hodkinson, who retired from the scheme on 30 April 1998, include an increase in pension of
£5,000 per annum granted as part of his termination package.
Age
Years of
service
Increase
in accrued
pension
£’000
57
16
28
440
398
455
348
Philip Rowley1
46
1
1
1
–
5
–
Directors’ pensions
Accrued pension
Pension cost
1999
£’000
1998
£’000
1999
£’000
1998
£’000
Roger Holmes
39
5
1
7
–
6
–
James Hodkinson2
54
25
43
182
205
765
621
1
Notes
1 Roger Holmes and Philip Rowley both joined the Board during the year.
2 James Hodkinson retired from the Board on 15 April 1998 aged 54. The 1999 figures relate to the benefits payable on retirement, rather than those payable on termination
from service.
Selected senior executives in France, including Philippe Francès and Jean-Hugues Loyez, are members of funded defined benefits
arrangements providing a target pension on retirement of between 53% and 60% of remuneration (less existing compulsory and
statutory provision), providing sufficient service has been completed. The arrangement for Philippe Francès, which was set up in 1997,
provided for the full target pension on retirement at age 63, rather than a pro-rata proportion, in return for a reduction in base salary
of FF 1 million. On termination of employment before retirement age, the benefits under these arrangements lapse, so there are no
accrued benefits until retirement age. Accordingly, no pension details are shown in the above table.
Service contracts
UK executive directors have service contracts which are terminable by the Company upon two years’ notice. In the event of early
termination, provision is made for payment of up to 18 months’ liquidated damages if the director has not reached the age of 50,
or up to 21 months’ liquidated damages if the director is 50 or over.
Page 47
47
R8072 pp41-53
5/5/99 1:47 pm
Page 48
Roger Jones had a service contract which terminated when he retired as a director of Kingfisher plc on 31 March 1998.
The remuneration shown in the table includes his salary for the period from 1 February to 31 March 1998.
James Hodkinson had a service contract which terminated on 30 April 1998, following his retirement from the Board on 15 April 1998.
The remuneration table shows salary for the period from 1 February to 15 April 1998. Ownership of James Hodkinson’s car was
transferred to him as part of his termination package.
Anthony Percival’s service contract was for an initial two-year period, which was extended on a full-time basis until 31 October 1998
and further extended on a part-time basis until 31 May 1999, to secure a fully effective hand-over to the new Group Finance Director,
Philip Rowley.
Philip Rowley’s service contract commenced with his appointment as a director of Kingfisher plc on 3 August 1998.
The notice period in the service contract for Philippe Francès is six months from the Company, but includes termination provisions in
accordance with French law which could require payment of up to 36 months’ remuneration if all provisions, including a restriction on
future companies he could join, were applied.
Jean-Hugues Loyez has a verbal contract with Castorama Dubois Investissements S.C.A. which does not specify termination provisions.
Under French law, he is entitled to three months’ notice from the Company and payment of up to 12 months’ remuneration.
The Board is aware that some of the current notice periods are longer than those recommended in the Combined Code, but believes
that they are in the best interests of shareholders in retaining key executive directors while providing certainty and facilitating a speedy
and clean break on early termination by agreeing liquidated damages which reflect a discount to take account of an agreed level of
mitigation. All service contracts will be available for inspection at the annual general meeting and at the Company’s registered office.
Non-executive directors
Non-executive directors’ remuneration consists of an annual salary for their services as members of the Board and of selected Committees.
Whilst they do not have service contracts, their letters of engagement are for a three-year period. The Company may terminate these
arrangements at any time without compensation. Since 1 February 1999, Michael Hepher’s services to the Board have been provided by
Maple Leaf Global Limited under a Consultancy Agreement. This agreement may be terminated at any time without notice or compensation.
Non-executive directors’ remuneration is determined by the Board.
Directors’ remuneration
Salary
£’000
Benefits
Annual
bonus
(Note 1)
Total
Long-term incentive
1999
1998
1999
1998
Executive
702
43
638
1,383
1,372
224
111
Philippe Francès2
327
3
192
522
534
n/a
n/a
84
40
–
124
821
92
124
287
35
270
592
n/a
34
n/a
Roger Jones
54
12
–
66
650
100
53
Jean-Hugues Loyez2,4
19
–
22
41
n/a
n/a
n/a
Anthony Percival
274
16
214
504
659
4605
–
Philip Rowley4
155
2246
136
515
n/a
–
n/a
1,472
3,747
4,036
910
288
James Hodkinson
3
Roger Holmes4
3
Total
1
2
3
4
5
6
1,902
373
Notes
Benefits incorporate all taxable benefits arising from employment which relate mainly to the provision of a company car and salary supplements where pensionable salary is
limited by the “earnings cap”, but also include the cost of medical insurance and, for the Chief Executive, personal tax advice.
Converted to sterling at an exchange rate of FF 9.62 to £ (1998: FF 9,66 to £).
Salary covers period to resignations from Board on 31 March 1998 (Roger Jones) and 15 April 1998 (James Hodkinson).
Salary covers period since appointment, being 9 February 1998 for Roger Holmes, 3 August 1998 for Philip Rowley and 18 December 1998 for Jean-Hugues Loyez.
The long-term incentive relates to the exercise on 17 April 1998 of 140,000 phantom share options at 225p per share, when the market price was 553.5p per share.
Includes £190,000 for relocation costs and allowances.
48
Page 48
R8072 pp41-53
5/5/99 1:47 pm
Page 49
Directors’ remuneration continued
Salary
Benefits
Annual
bonus
£’000
Total remuneration
Long-term incentive
1999
1998
1999
1998
Non-executive
175
–
–
175
175
–
–
John Bullock
27
–
–
27
26
–
–
Ronald Goldstein
27
–
–
27
26
–
–
Peter Hardy
27
–
–
27
26
–
–
Michael Hepher
27
–
–
27
11
–
–
Sir John Banham (Chairman)1
The Lady Howe
27
–
–
27
26
–
–
Margaret Salmon2
27
–
–
27
11
–
–
27
–
–
Bernard Thiolon
Total
364
27
26
–
–
364
327
–
–
Notes
1 The Company also pays £25,000 per annum for office accommodation and services provided by Sir John Banham through Westcountry Management Limited.
2 Margaret Salmon’s salary is paid to her current employer.
Directors’ share interests
Number of options
At start
of year
Granted
during
year
Exercised
during
year
At end
of year
Option
price
pence
Date from
which
exercisable
Expiry
date
29,316
–
–
29,316
220.0
23/04/94
23/04/01
701,314
–
–
701,314
263.3
24/10/94
24/10/01
444,748
–
–
444,748
229.3
15/10/95
15/10/02
40,030
–
–
40,030
280.0
26/04/96
26/04/03
252,292
–
–
252,292
288.5
29/04/97
29/04/04
Executive share options
22,164
–
–
22,164
405.0
23/10/00
23/10/07
–
287,534
–
287,534
549.5
27/04/01
27/04/08
1,489,864
287,534
169,640
–
–
169,640
238.0
15/11/97
15/11/04
276,164
–
–
276,164
250.0
30/10/98
30/10/05
276,862
–
–
276,862
320.0 25/10 /99
25/10/06
147,132
–
–
147,132
405.0
22/10/07
Philippe Francès
869,798
1,777,398
23/10/00
869,798
Page 49
49
R8072 pp41-53
5/5/99 1:47 pm
Page 50
Directors’ share interests continued
Number of options
At start
of year
Granted
during
year
Exercised
during
year
At end
of year
Option
price
pence
Date from
which
exercisable
Expiry
date
46,218
–
–
46,218
238.0
15/11/97
15/11/04
26,666
–
–
26,666
225.0
28/04/98
28/04/05
59,690
–
–
59,690
291.5
01/05/99
01/05/06
47,792
–
–
47,792
328.5
16/04/00
16/04/07
–
100,090
–
100,090
549.5
27/04/01
27/04/08
180,366
100,090
–
118,320
524.0
26/10/01
26/10/08
Roger Holmes
Philip Rowley
280,456
–
118,320
The market price of the shares on 30 January 1999 was 624.5p and the range during the year was 425p to 694p.
Although not a participant under the share option arrangement Anthony Percival has a long-term bonus arrangement based on the
increase in the Kingfisher share price.
Number of options over notional shares
At start
of year
Granted
during
year
266,666
–
Anthony Percival
205,830
2
Exercised
during
year
140,0001
–
–
At end
of year
Share
price
pence
Date
vests
Date
lapses
126,666
225.0
31/05/97
31/05/99
205,830
291.5
31/05/98
31/05/99
Notes
1 Exercised on 17 April 1998 when market price was 553.5p.
2 23/36ths of any increase in share price is payable providing the Company’s earnings per share grow by a total of 4% above RPI in the period, increasing proportionately to
36/36ths for each month employment continues after 31 May 1998.
Number of options
At start
of year
Granted
during
year
Exercised
during
year
At end
of year
Option
price
pence
Date from
which
exercisable
Expiry
date
2,016
–
–
2,016
239.5
01/08/99
31/01/00
ShareSave
1,868
–
–
1,868
184.5
01/08/00
31/01/01
3,390
–
–
3,390
264.5
01/08/02
31/01/03
–
–
184.5
01/08/00
31/01/01
7,274
Roger Holmes
50
9,348
7,274
Page 50
9,348
R8072 pp41-53
5/5/99 1:47 pm
Page 51
Jean-Hugues Loyez had at the date of his appointment as a director of the Company and on 30 January 1999 options over shares in
Castorama Dubois Investissements S.C.A., as follows:
Number of options
Date of
Grant
At start
of year
Granted
during
year
Exercised
during
year
At end
of year
Option
price
(FF)
Date from
which
exercisable
Expiry
date
01/07/94
880
–
–
880
620.0
02/07/94
30/06/99
31/07/95
720
–
–
720
714.0
01/08/95
30/06/00
22/09/97
90,000
–
–
90,000
648.0
23/09/97
21/09/02
Ordinary
shares
1999
Ordinary
shares
19981
4,174
4,122
11,121
10,880
Directors’ interests in shares
The directors who held office at 30 January 1999 had the following interests in the shares of the Company:
Sir John Banham
John Bullock
Philippe Francès
940,574 1,940,574
Ronald Goldstein
Beneficial
8,610,000 9,080,000
Non-Beneficial
7,400,000 7,650,000
Peter Hardy
60,000
60,000
Michael Hepher
–
–
Roger Holmes 2
9,362
–
456
456
–
–
357,619
349,884
7,520
7,520
The Lady Howe
Jean-Hugues Loyez2
Anthony Percival
25,000
–
Margaret Salmon
–
–
Bernard Thiolon
16,072
15,704
Philip Rowley
2
Notes
1 The figures for 1998 have been adjusted to reflect the sub-division on 2 July 1998 of the ordinary shares of 25p each in the capital of the Company into two ordinary shares
of 12.5p each.
2 As at date of appointment.
Jean-Hugues Loyez held at the date of his appointment as a director of the Company, and on 30 January 1999, a beneficial interest in
138,132 shares in the capital of Castorama Dubois Investissements S.C.A., (“CDI”), each of which have a nominal value of FF25. As a
Commandité, he also held 13,105 special shares which, under the Articles of CDI, entitle him to 0.378% of CDI’s then issued share
capital on transformation of CDI to a Société Anonyme.
Annual general meeting
The annual general meeting will be held at The Dorchester, Park Lane, London W1 (Ballroom Entrance) on Wednesday 26 May 1999
at 11.00 am. The notice of the annual general meeting can be found on pages 94 and 95. In addition to the routine business of the
annual general meeting the following special business will be transacted:
Reappointment of Bernard Thiolon (resolution 5)
Section 293 of the Companies Act 1985 requires that special notice be given to the Company of the intention to propose the re-election
of a person as a director if he has attained the age of 70. The Company has received this special notice in respect of Bernard Thiolon,
who attained the age of 70 on 24 February 1999. The ordinary resolution is to propose his reappointment for a period of one year.
Page 51
51
R8072 pp41-53
5/5/99 1:47 pm
Page 52
Directors’ authority to issue shares (resolution 6)
The Companies Act 1985 (the “Act”) prevents directors from allotting unissued securities without the authority of shareholders. In
certain circumstances this could be unduly restrictive. The proposed special resolution will give the directors a general authority to allot
the unissued securities of the Company. The total number of relevant securities (as defined in section 80 of the Act) which the
directors will have the authority to allot will be 239,903,986 (representing 17.6% of the share capital currently in issue). Apart from the
issue of securities as a result of scrip dividends and on the exercise of share options, the directors have no present intention to exercise
this authority. The authority in Resolution 6 will expire at the conclusion of the 2000 annual general meeting or on 27 August 2000,
whichever is the earlier.
Directors’ authority to offer a scrip dividend alternative (resolution 7)
The proposed ordinary resolution is to renew the directors’ power, originally granted for a five-year period commencing in 1994, to
offer shareholders the choice of electing to receive fully paid new ordinary shares of the Company instead of cash in respect of all or
any part of any dividends declared or paid during the period prior to the annual general meeting of the Company to be held in 2004.
Restricted disapplication of pre-emption rights (resolution 8)
The proposed special resolution will give the directors a limited authority to issue equity securities for cash otherwise than to existing
shareholders in proportion to their existing holdings, notwithstanding the pre-emption provisions of Section 89 of the Act. This limited
authority would empower the directors to make such cash issues provided they did not exceed in aggregate an amount equal to 5%
of the issued share capital of the Company. The resolution also contains provisions enabling the directors to take action to overcome
certain practical difficulties which could arise in the case of a rights issue. The authority in Resolution 8 will expire at the conclusion of
the 2000 annual general meeting or on 27 August 2000, whichever is the earlier.
Purchase by the company of its own shares (resolution 9)
The directors consider that it would be advantageous for the Company to renew the existing authority granted at last year’s annual
general meeting, which allows the use of the Company’s available cash resources to acquire its own shares in the market for
cancellation, for a further year. This authority is granted pursuant to Section 162 of the Act. Accordingly, a special resolution is proposed
to authorise the purchase in the market of up to 10% of the issued ordinary shares of the Company at a price of not more than 105%
of the average of the middle market quotations for the ordinary shares of the Company (as derived from The Stock Exchange Daily
Official List) for the 10 business days prior to the date of purchase, exclusive of advance corporation tax (if any) payable by the
Company. The directors do not intend to exercise the Company’s power to purchase its own shares other than in circumstances where
this would result in an increase in earnings per share.
Employee involvement
The Board continues to place emphasis on high standards of customer care and service by each operating company. The commitment
of every employee to this business requirement is considered to be critical. Accordingly, operating companies have continued to
develop their arrangements for employee information, consultation, communication and involvement, including attitude surveys, briefing
groups, internal magazines and newsletters on matters relating to the business performance and objectives, community involvement
and other issues.
Training and links with the educational sector reinforce our commitment to employee involvement and development. Employees are
represented on the trustee board of the Group’s pension arrangements.
We have a long-established Employee Savings-Related Share Option Scheme in which all of the Group’s UK employees are entitled to
participate on an annual basis, regardless of number of hours worked, provided they meet certain service conditions. To further
encourage employee involvement, from 1999 an offer to participate will be made twice yearly and the service requirement will be
reduced from one year to six months. In addition, an International Savings-Related Share Option Scheme will be introduced along
similar lines to that offered in the UK, but taking account, where necessary, of different tax and legal requirements.
52
Page 52
R8072 pp41-53
5/5/99 1:47 pm
Page 53
Equal opportunities
The Group is committed to the principle of equal opportunity in employment and to ensuring that no applicant or employee receives
less favourable treatment on the grounds of gender, marital status, race, colour, nationality, ethnic or national origin, religion, HIV status,
disability, sexuality, or unrelated criminal convictions and without arbitrary restrictions in respect of age, or is disadvantaged by
conditions or requirements which cannot be shown to be justified.
The Group applies employment policies which are fair and equitable and which ensure entry into, and progression within, the Group is
determined solely by application of job criteria and personal ability and competency.
The Company is a founder member of the Business in the Community Opportunity 2000 campaign designed to increase the
opportunities available for women in the workplace. Progress has been made in a number of areas, such as training, parental leave
provisions and the employment of mature workers. The Group will continue to build upon and introduce initiatives in this area.
The Group gives full and fair consideration to the possibility of employing disabled persons wherever suitable opportunities exist.
Employees who become disabled are given every opportunity and assistance to continue in their employment or to be trained for
other suitable positions.
Environmental issues
The Group continues to identify the key environmental impacts of the operational element of the businesses and its products.
Progress has been made to reduce that impact and the Group is committed to making further improvements. Further details are given
on page 37.
Supplier payment policy
The Company does not impose standard payment terms on its suppliers but agrees specific terms with each. It is the Company’s policy
to pay its suppliers in accordance with the terms which have been agreed. The Company is a holding company and therefore has no
trade creditors.
Political and charitable contributions
This year the Company has made no political contributions (1998: £nil). The Company and its subsidiaries contribute to a number
of community projects, either in cash, in kind or by donation of human resources. The value of this year’s contributions is estimated
at £1,735,068 (1998: £1,762,765). This includes payments specifically for charitable purposes of £1,167,456 (1998: £1,343,207).
Additionally, charitable fund-raising activities of employees contributed £567,612 (1998: £392,892).
Major shareholders
As at 30 January 1999, the Company’s share register of substantial shareholdings showed the following interest in 3% or more of the
Company’s shares:
Prudential Corporation
Number of
ordinary shares
%
53,837,326
3.96
Auditors
PricewaterhouseCoopers have indicated their willingness to accept reappointment as auditors of the Company for a further term and a
resolution proposing their reappointment will be put to the annual general meeting.
By Order of the Board
Helen Jones Secretary
16 March 1999
9 April 1999
Page 53
53
R8072 pp54-57
5/5/99 1:52 pm
Page 54
Consolidated profit and loss account
£ millions
Notes
1999
1999
1998
1998
Turnover including share of joint ventures
Continuing operations
6,975.2
Acquisitions
508.1
6,416.5
7,483.3
–
6,416.5
Less: Share of joint ventures’ turnover
(24.5)
Acquisitions
(1.0)
Group turnover
5
Group operating profit
2
(7.1)
(25.5)
612.1
Acquisitions
–
7,457.8
20.4
(7.1)
6,409.4
514.5
632.5
–
514.5
Share of operating profit in
Joint ventures:
Associates:
0.5
Acquisitions
0.1
Total operating profit including share of joint ventures and associates
(0.4)
0.6
4.0
4.2
637.1
518.3
Analysed as
DIY
191.1
161.6
Electrical
173.4
146.8
General merchandise
186.1
171.3
69.1
61.1
44.7
–
Property
Exceptional item – other operating income
3
Other operating costs
(27.3)
Total operating profit including share of joint ventures and associates
Exceptional items
(22.5)
637.1
518.3
2.1
5.7
4
Profit on disposal of properties – continuing operations
Profit on disposal of other investments
–
9.3
639.2
533.3
Profit on ordinary activities before interest
5
Net interest payable
6
Profit on ordinary activities before taxation
7
629.3
520.0
10
(183.5)
(133.1)
445.8
386.9
Tax on profit on ordinary activities
Profit on ordinary activities after taxation
Minority interests
(9.9)
(8.9)
(13.3)
(0.5)
Profit for the financial year attributable
436.9
386.4
Dividends on equity shares
to the members of Kingfisher plc
11
(175.3)
(155.1)
Retained profit for the financial year
31
261.6
231.3
Earnings per share (pence)
Basic
12
32.3
28.7
Diluted
12
31.7
28.4
Basic before exceptional items
12
29.9
27.6
Diluted before exceptional items
12
29.3
27.3
54
Page 54
R8072 pp54-57
5/5/99 1:52 pm
Page 55
Balance sheets
As at 30 January 1999
Group
£ millions
Notes
1999
1999
Company
1998
1998
1999
1998
264.5
–
–
–
Fixed assets
Goodwill
Other intangible assets
2.8
–
–
–
Total intangible assets
13
267.3
–
–
–
Tangible assets
14
2,885.4
1,816.9
1.9
1.6
6.9
–
–
Investments in joint ventures
– Share of gross assets
105.1
– Share of gross liabilities
(94.9)
41.9
10.2
(35.0)
Investments in associates
11.2
26.1
–
–
Other investments
45.0
18.2
1,543.0
1,482.8
Total investments
15
66.4
51.2
1,543.0
1,482.8
3,219.1
1,868.1
1,544.9
1,484.4
–
–
Current assets
Development work in progress
16
69.0
49.1
Stocks
16
1,465.4
840.5
–
–
Debtors due within one year
17
608.8
447.0
4,923.5
1,811.8
Debtors due after more than one year
17
149.0
–
27.9
Securitised consumer receivables
18
43.8
–
–
254.7
–
–
Less: non-recourse secured notes
Investments
144.1
321.0
(247.4)
19
189.9
73.6
311.7
Cash at bank and in hand
(146.1)
241.2
74.9
–
3.4
2,913.8
1,859.0
4,923.5
1,843.1
Creditors
Amounts falling due within one year
20
(2,726.0)
Net current assets
Total assets less current liabilities
(1,615.3) (3,836.2)
(963.0)
187.8
243.7
1,087.3
880.1
3,406.9
2,111.8
2,632.2
2,364.5
Creditors
Amounts falling due after more than one year
21
(768.8)
(327.6)
Provisions for liabilities and charges
29
(21.8)
(14.1)
2,616.3
1,770.1
(442.9)
(225.5)
–
–
2,189.3
2,139.0
Capital and reserves
Called up share capital
30
170.0
169.0
170.0
169.0
Share premium account
31
237.7
225.1
237.7
225.1
Revaluation reserve
31
395.4
342.0
–
–
Non-distributable reserves
31
146.3
–
936.0
936.0
Profit and loss account
31
1,301.2
1,034.5
845.6
808.9
Equity shareholders’ funds
32
2,250.6
1,770.6
2,189.3
2,139.0
Equity minority interests
365.7
2,616.3
(0.5)
1,770.1
–
–
2,189.3
2,139.0
Approved by the Board
Sir Geoffrey Mulcahy Director
Philip Rowley Director
16 March 1999
Page 55
55
R8072 pp54-57
5/5/99 1:52 pm
Page 56
Consolidated cash flow statement
£ millions
Notes
Net cash flow from operating activities
33 (a)
1999
1999
1998
698.3
1998
605.0
Returns on investment and servicing of finance
Interest received
Interest paid
Interest element of finance lease rental payments
35.2
18.5
(46.1)
(28.6)
(2.4)
(1.1)
Net cash outflow from returns on investment and servicing of finance
(13.3)
(11.2)
Taxation
UK Corporation tax paid
Overseas tax paid
(125.2)
(90.3)
(44.0)
(27.7)
Tax paid
(169.2)
(118.0)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets
Receipts from the sale of tangible fixed assets
Payments for additions to investments
Receipts from sale of investments
(416.0)
(245.8)
37.4
69.0
(15.3)
(0.5)
0.9
42.1
Net cash outflow from capital expenditure and financial investment
(393.0)
(135.2)
Purchase of subsidiary and business undertakings
(361.2)
Net overdrafts acquired with subsidiary undertakings
(32.6)
(69.4)
Payments for additions to joint ventures/associated undertakings
–
(3.8)
(5.4)
Net cash outflow from acquisitions and disposals
(434.4)
(38.0)
Equity dividends paid
(153.8)
(135.3)
Management of liquid resources
Net movement in short-term deposits
Net purchase of short-term investments
22.3
21.3
(43.1)
(46.7)
Net cash outflow from management of liquid resources
(20.8)
(25.4)
Financing
Issue of ordinary share capital
13.6
18.1
Capital element of finance lease rental payments
(6.4)
(2.1)
Net increase/(repayment) of loans
433.2
(213.1)
Net cash inflow/(outflow) from financing
440.4
(197.1)
Decrease in cash
(45.8)
(55.2)
(203.5)
(399.2)
Decrease in cash
(45.8)
(55.2)
Debt in subsidiaries acquired
(41.0)
Net movement in short-term deposits
(22.3)
(21.3)
43.1
46.7
Reconciliation of net cash flow to movement in net debt
33 (e)
Net debt at start of year
Net purchase of short-term investments
Change in market value of investments
(0.5)
Net (increase)/repayment of loans
(433.2)
Foreign exchange effects
9.8
Net debt at end of year
56
(693.4)
Page 56
–
(0.2)
213.1
12.6
(203.5)
R8072 pp54-57
5/5/99 1:52 pm
Page 57
Consolidated statement of total recognised gains and losses
£ millions
Profit for the financial year
Unrealised surplus on revaluation of properties (see note 14)
Non-distributable reserve arising on the combination of B&Q and Castorama (see note 37 (a))
1999
1998
436.9
386.4
58.4
114.1
146.3
–
Foreign exchange loss
(10.0)
Total recognised gains and losses relating to the year
631.6
(5.9)
494.6
Note of Group historical cost profits
£ millions
Reported profit on ordinary activities before taxation
Realisation of property revaluation surplus/(deficits) of previous years
1999
1998
629.3
520.0
5.0
(8.3)
Difference between an historical cost depreciation charge
and the actual charge for the year based on the revalued amount
Historical cost profit on ordinary activities before tax
2.2
1.9
636.5
513.6
268.8
224.9
Historical cost profit for the year retained
after taxation, minority interests and dividends
Page 57
57
R8072 pp58-88
5/5/99 6:06 pm
Page 58
Notes to the accounts
1 Accounting policies
Accounting conventions
The financial statements of the Company and its subsidiaries are made up to the nearest Saturday to 31 January each year. The financial
statements of the Company and its subsidiaries are prepared under the historical cost convention, except for certain land and buildings
which are included in the financial statements at valuation, and are prepared in accordance with applicable accounting standards in the
United Kingdom. However, compliance with SSAP19 “Accounting for Investment Properties” relating to depreciation on investment
properties and FRS 10 “Goodwill and Intangible Assets” relating to the capitalisation and amortisation of goodwill both require a
departure from the requirements of the Companies Act 1985 as explained below. Accounting policies have been consistently applied,
with the exception of the new policy of capitalisation of goodwill as required by FRS 10.
Basis for consolidation
The consolidated financial statements incorporate the financial statements of the Company, its subsidiary undertakings, joint ventures
and associated undertakings. Subsidiary undertakings acquired during the year are recorded under the acquisition method and their
results are included from the date of acquisition.
Associated undertakings are accounted for using the equity method and joint ventures are accounted for using the gross equity
method. Kingfisher plc has not presented its own profit and loss account as permitted by Section 230 of the Companies Act 1985.
Foreign currencies
Transactions denominated in foreign currencies are translated into sterling at contracted rates or, where no contract exists, at average
monthly rates.
Monetary assets and liabilities denominated in foreign currencies which are held at the year end are translated into sterling at year-end
exchange rates. Exchange differences on monetary items are taken to the profit and loss account.
The balance sheets of overseas subsidiary undertakings are expressed in sterling at year end exchange rates. Profits and losses of
overseas subsidiary undertakings are expressed in sterling at average exchange rates for the year. Exchange differences arising on the
translation of opening shareholders’ funds are recorded as a movement on reserves.
The Group’s share of net assets or liabilities of associated undertakings and joint ventures are expressed in sterling at year-end
exchange rates. The share of profits or losses for the year are expressed in sterling at average exchange rates for the year. Exchange
differences arising on the translation of opening net equity are recorded as a movement on reserves.
Exchange differences arising on borrowings used to finance, or provide a hedge against, Group equity investments in foreign enterprises
are recorded as movements on reserves.
Principal rates of exchange
French franc
1999
1998
Year-end rate
9.489
10.010
Average rate (weighted in proportion to the turnover of the French subsidiaries)
9.622
9.656
German deutschmark
1999
1998
Year-end rate
2.829
2.989
Average rate (weighted in proportion to the turnover of Wegert)
2.844
2.866
Goodwill and intangible assets
Following the introduction of FRS 10, the Group has changed its accounting policy for goodwill and intangible assets.
Intangible assets, which comprise goodwill arising on acquisitions and acquired licences and copyrights, are stated at cost less amortisation.
58
Page 58
R8072 pp58-88
5/5/99 6:06 pm
Page 59
Goodwill arising on all acquisitions prior to 31 January 1998 remains eliminated against reserves. This goodwill will be charged in the
profit and loss account on subsequent disposal of the business to which it relates. Purchased goodwill arising on acquisitions after
31 January 1998 is treated as an asset on the balance sheet. Where goodwill is regarded as having a limited estimated useful economic
life it is amortised on a systematic basis over its life. Where goodwill is regarded as having an indefinite life it is not amortised.
The estimated useful economic life is regarded as indefinite where goodwill is capable of continued measurement and the durability of
the acquired business can be demonstrated. Where goodwill is not amortised an annual impairment review will be performed and any
impairment will be charged to the profit and loss account.
In estimating the useful economic life of goodwill arising, account has been taken of the nature of the business acquired, the stability of
the industry, the extent of continuing barriers to market entry and expected future impact of competition. With the exception of BUT
S.A. all acquisitions since 31 January 1998 are considered by the directors to have an estimated useful economic life of 20 years.
The Group’s acquisition of additional shares in BUT S.A. gave rise to goodwill of £132.8m. The directors consider that BUT S.A. has a
proven ability to maintain its market leadership over a long period and will adapt successfully to any foreseeable technological or
customer-led changes and that barriers to entry into its market place exist, such that the business will prove to be durable. BUT S.A.’s
record since 1972, when it commenced trading, has been one of consistent growth in both turnover and operating profits. Accordingly,
the goodwill is not amortised and, in order to give a true and fair view, the financial statements depart from the requirement of
amortising goodwill over a finite period, as required by the Companies Act. Instead an annual impairment test is undertaken and any
impairment that is identified will be charged to the profit and loss account. It is not possible to quantify the effect of the departure from
the Companies Act, because no finite life for goodwill can be identified.
Goodwill arising on purchase of pharmacy businesses is amortised over a useful economic life of 20 years. Acquired licences and
copyrights are amortised over the period of the underlying legal agreement, which do not exceed 20 years.
Depreciation
Depreciation of tangible fixed assets is provided where it is necessary to reflect a reduction from book value to estimated residual value
over the estimated useful life of the asset to the Group. It is the Group’s policy to maintain its properties in a state of good repair to
prolong their estimated useful lives.
The directors consider that, in the case of freehold and long leasehold properties occupied by the Group, the estimated residual values
at the end of their useful economic lives, based on the prices prevailing at the time of acquisition or subsequent valuation, are not
materially different from their current carrying values. The lives of these properties and their residual values are such that no provision
for depreciation is considered necessary. Any permanent diminution is charged to the profit and loss account.
Depreciation of other tangible fixed assets is calculated by the straight line method and the annual rates applicable to the principal
categories are:
Short leaseholds
– over remaining period of the lease
Tenants’ improvements
– over estimated useful life
Tenants’ fixtures
– between 10% and 15%
Computers and electronic equipment
– between 25% and 50%
Motor cars
– 25%
Commercial vehicles
– 331/3%
Impairment of fixed assets and goodwill
The need for any fixed asset impairment write-down is assessed by comparison of the carrying value of the asset against the higher of
realisable value or value in use.
Page 59
59
R8072 pp58-88
5/5/99 6:06 pm
Page 60
Notes to the accounts continued
1 Accounting policies continued
Disposal of land and buildings
Profits and losses on disposal of land and buildings represent the difference between the net proceeds and the net carrying value at the
date of sale. Sales are accounted for when there is an unconditional exchange of contracts.
Leased assets
All operating lease payments are charged to the profit and loss account in the financial year to which the payments relate.
The cost of assets held under finance leases is included under tangible fixed assets and depreciation is provided in accordance with the
policy for the class of asset concerned. The corresponding obligations under these leases are shown as creditors. The finance charge
element of rentals is charged to the profit and loss account as incurred.
Properties
Group occupied properties are revalued annually and included in the balance sheet at existing use value.
Investment properties are revalued annually and included in the balance sheet at their open market value.
In accordance with SSAP19, no depreciation is provided in respect of investment properties. This represents a departure from the
Companies Act 1985 requirements to provide for the systematic annual depreciation of fixed assets. However, these properties are
held for investment and the directors consider that the adoption of the above policy is necessary in order to give a true and fair view. It
is not possible to quantify the effect of the departure from the Companies Act, because no useful economic life is deemed appropriate.
Capitalisation of interest
Interest on borrowings to finance property development is capitalised from the date work starts on the development to the earlier of
six months after practical completion and the date of sale.
Interest on borrowings to finance the construction of properties held as tangible fixed assets is capitalised from the date work starts on
the property to the earlier of the date on which a Group company starts to trade from the property, six months after practical
completion and the date when the property is generating a substantial level of income.
Interest is capitalised before any allowance for tax relief.
Property developments
Property developments are stated at the lower of cost and net realisable value. Development profits are taken when developments are
sold. Sales are accounted for when there is an unconditional exchange of contracts or where the conditions of a sales contract are
substantially satisfied.
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost includes appropriate overheads.
Rebates receivable from suppliers
Volume related rebates receivable from suppliers are credited to the carrying value of the stock to which they relate. Where a rebate
agreement with a supplier covers more than one year the rebates are recognised in the accounts in the period in which they are earned.
Pensions
The Group operates defined benefit and defined contribution pension schemes for its UK employees. In each case a separate fund is
being accumulated to meet the accruing liabilities. The assets of each of these funds are all held under trusts which are entirely separate
from the Group’s assets.
60
Page 60
R8072 pp58-88
5/5/99 6:06 pm
Page 61
The cost of pensions in respect of the Group’s defined benefit schemes is charged to the profit and loss account so that it is spread
over the working lives of employees. Variations to pension costs caused by differences between the assumptions used and actual
experience are spread over the average remaining working lives of the current employees at each actuarial valuation date.
Deferred taxation
Provision is made for deferred taxation, using the liability method, on all material timing differences to the extent that it is considered
probable that the liability or asset will crystallise.
Derivative financial instruments
Financial assets are recognised on the balance sheet at the lower of cost and net realisable value. Discounts and premia are charged
or credited to the profit and loss account over the life of the asset or liability to which they relate.
Derivative financial instruments are accounted for using hedge accounting to the extent that they are held to hedge a financial asset
or liability. Where such instruments do not hedge an underlying asset or liability, they are accounted for using fair value accounting.
When a financial instrument ceases to be a hedge, either as a result of the underlying asset or liability being extinguished, or because
a future event is no longer likely to occur, the instrument will thereafter be marked to its fair value in the financial statements.
Income and expenditure arising on financial instruments held for hedging purposes is recognised on an accruals basis, and credited
or charged to the profit and loss account in the financial period in which it arises.
Gains or losses on financial instruments accounted for on a fair value basis are reflected in the profit and loss account as they arise.
For the purposes of notes 22 to 28 short-term debtors and creditors have been excluded.
Year 2000 and Euro costs
Costs incurred in preparing systems for the Year 2000 and the introduction of the Euro are written off as incurred unless there is
a significant improvement in the systems in which case the costs are capitalised and depreciated in line with the policy stated above.
Changes in presentation of financial information
FRS 9 – “Associates and Joint Ventures” has been adopted and, consequently, the Group’s profit and loss account and balance sheet
have been presented in accordance with the new requirements.
FRS 10 – “Goodwill and Intangible Assets” has been adopted and, consequently, acquisition goodwill appears on the balance sheet for
acquisitions made after 31 January 1998 (see note 13).
FRS 11 – “Impairment of Fixed Assets and Goodwill” came into effect for these financial statements, but has not resulted in any changes
in presentation.
FRS 12 – “Provisions, contingent liabilities and contingent assets” has been adopted early. No restatement of prior year information has
been necessary, but additional disclosures have been provided in accordance with the standard (see note 29).
FRS 13 – “Derivatives and other Financial Instruments: Disclosures” has been adopted early. The Group had previously presented
information on financial instruments in accordance with the proposals of FRED 13, the predecessor of the standard. Consequently,
this prior year information has been refined and, where necessary, disclosed on the same basis as for the year ended 30 January 1999
(see notes 22 to 28).
FRS 14 – “Earnings per Share” has been adopted and, consequently, basic and diluted earnings per share have been calculated in
accordance with the new methodology, the only change being the elimination of dividends paid to and the shares held by the Employee
Share Ownership Plan Trust (ESOP). Comparative basic and diluted earnings per share for the prior year have been re-calculated on
the same basis (see note 12), the effect of which is to reduce the dividend paid and operating profit by £0.5m. There is no impact on
the comparative earnings per share figure.
Page 61
61
R8072 pp58-88
5/5/99 6:06 pm
Page 62
2 Operating profit
Continuing
Acquisitions
1999
Total
1998
Total
6,950.7
507.1
7,457.8
6,409.4
Cost of sales
(4,607.4)
(353.5)
(4,960.9)
(4,235.8)
Gross profit
2,343.3
153.6
2,496.9
2,173.6
(1,512.8)
(103.8)
(1,616.6)
(1,430.7)
(353.7)
(32.3)
(386.0)
(318.0)
£ millions
Group turnover
Selling expenses
Administrative expenses
44.7
–
44.7
–
Other operating income
90.6
2.9
93.5
89.6
612.1
20.4
632.5
514.5
3 Exceptional item – other operating income
The exceptional other operating income represents the release of an accrual for VAT on outstanding credit balances as at 28 February
1997 when HM Customs and Excise withdrew the Standard Method of Gross Takings. Following a favourable Court of Appeal ruling
which determined that such VAT was not payable, the accrual was no longer required and has been released.
4 Exceptional items
The profit on disposal of fixed assets relates to the disposal of properties. The prior year profit on disposal of other investments arose
on the disposal of the Group’s interest in Staples UK and Maxi-Papier-Markt, together with the disposal of a small trade investment in
Darty. There were no other investment disposals in the financial year ended 30 January 1999.
5 Segmental analysis
Turnover
Turnover represents retail sales and services supplied, interest receivable and other income from the provision of credit facilities, rental
income and turnover from property development activities. Turnover excludes transactions made between companies within the
Group and value added tax.
The Group operations are divided between retail operations, including financial services relating to the provision of consumer credit to
retail customers, and property operations. With the expansion to the Group’s operations throughout Europe and the rest of the world
during the year, an expanded segmental analysis is presented. Principal European operations are now shown by country, and operations
in the rest of the world are now shown separately. Comparative figures have been restated accordingly.
62
Page 62
R8072 pp58-88
5/5/99 6:07 pm
Page 63
£ millions
Continuing
Acquisitions
1999
Total
1998
Total
5,594.8
14.5
5,609.3
5,191.8
Turnover by origin
Retail sales
UK
Group
Joint ventures
France
Group
–
1.0
1.0
–
1,123.8
198.6
1,322.4
1,028.3
Joint ventures
10.1
–
10.1
–
–
255.9
255.9
–
128.7
38.1
166.8
89.5
14.4
–
14.4
7.1
Germany
Rest of world
Group
Joint ventures
UK
Property
UK
Retail financial services
62.3
–
62.3
48.6
6,934.1
508.1
7,442.2
6,365.3
Rental income
78.3
–
78.3
71.9
Property development sales
19.2
–
19.2
28.9
Inter-segment rental income
(56.4)
–
(56.4)
(49.6)
41.1
–
41.1
51.2
6,950.7
507.1
7,457.8
6,409.4
24.5
1.0
25.5
7.1
Total Group
Total joint ventures
The analysis of turnover by destination is not materially different to the analysis of turnover by origin.
Profit before tax
Retail profit
UK
404.4
0.1
404.5
361.0
France
119.8
14.5
134.3
111.2
–
6.9
6.9
–
Germany
Rest of world
Property
2.4
UK
Retail financial services
UK
Property development profit
1.4
2.5
48.2
–
48.2
5.0
574.8
20.5
595.3
479.7
6.3
–
6.3
5.5
Property investment profit
Total group
62.8
–
62.8
55.6
69.1
–
69.1
61.1
643.9
20.5
664.4
540.8
2.1
–
2.1
5.7
–
–
–
9.3
646.0
20.5
Profit on disposal of properties
Profit on disposal of other investments
Profit before common costs
(1.0)
666.5
555.8
Common costs
(27.3)
(22.5)
Profit before interest
639.2
533.3
Net interest
(9.9)
Group profit before tax
(13.3)
629.3
520.0
Net assets
Retail
UK
France
1,090.5
1.7
1,092.2
875.4
137.0
618.5
755.5
122.0
–
20.0
20.0
–
10.4
163.0
173.4
7.7
1,304.0
–
1,304.0
1,070.6
Germany
Rest of world
Property
UK
Unallocated net liabilities
Total Group
(728.8)
1,813.1
–
803.2
(728.8)
2,616.3
Page 63
(305.6)
1,770.1
63
R8072 pp58-88
5/5/99 6:07 pm
Page 64
6 Net interest payable
£ millions
1999
Bank and other interest receivable
1999
(94.4)
Less amounts included in turnover of financial services
59.2
1998
1998
(74.2)
(35.2)
45.7
(28.5)
Bank and other interest payable
Bank loans and overdrafts
20.9
20.4
Other loans
49.5
45.1
Finance lease charges
Less amounts included in cost of sales of financial services
2.4
1.0
72.8
66.5
(23.6)
49.2
(21.7)
44.8
14.0
Less interest capitalised
16.3
(4.1)
(3.0)
Net interest payable
9.9
13.3
7.3
13.3
Acquisitions
2.6
–
9.9
13.3
Share of net interest payable by joint ventures included above is £0.1m (1998: £0.1m receivable).
7 Profit on ordinary activities before taxation
£ millions
1999
1998
To PricewaterhouseCoopers (Company £0.1m, 1998: £0.1m)
0.9
1.1
To other audit firms
0.6
0.4
2.6
2.5
276.3
248.0
21.7
17.6
132.6
126.0
6.0
0.8
3.5
–
Profit on ordinary activities before taxation is stated after charging:
Auditors’ remuneration for audit:
Auditors’ remuneration for non-audit services
Operating leases:
Land and buildings
Plant and equipment
Depreciation of tangible fixed assets
– owned assets
– under finance leases
Costs incurred in reorganisations in acquired subsidiary undertakings
Amortisation of goodwill
2.3
–
Amortisation of other intangible assets
0.1
–
11.2
3.3
0.5
–
Year 2000 costs
Euro costs
The aggregate amount of auditors’ remuneration for non-audit services was £5.6m (being £2.3m to Coopers & Lybrand, £3.3m to
PricewaterhouseCoopers) of which £3.0m has been charged as an acquisition cost.
64
Page 64
R8072 pp58-88
5/5/99 6:07 pm
Page 65
8 Employees
£ millions
1999
1998
Wages and salaries
845.9
750.7
Social security costs
113.5
90.8
Other pension costs
29.4
25.8
988.8
867.3
100,861
76,071
3,432
2,649
Staff costs:
Number
Average number of persons employed:
Stores
Distribution
Administration
The equivalent number of employees working full time would have been
5,923
4,644
110,216
83,364
75,264
49,225
1999
1998
9 Directors’ remuneration
£ thousands
Executive directors
Salaries and taxable benefits
2,275
2,107
Bonuses
1,472
1,929
Long-term Incentive
910
288
Non-executive directors – Fees
364
327
5,021
4,651
1999
1998
148.6
123.9
During the year the actual aggregate gains on share options at the date of exercise were £460,000.
For further information see the remuneration report on pages 45 to 51.
10 Taxation
£ millions
Tax charge on profit for the year:
United Kingdom corporation tax at 31% (1998: 31.33%)
Relief for double taxation
(1.2)
(1.2)
Overseas taxation
40.2
35.7
Deferred tax
(0.2)
Associated undertakings
Prior year adjustments
–
1.5
1.6
188.9
160.0
(5.4)
183.5
(26.9)
133.1
Full tax relief is taken on capitalised interest on a paid basis.
Page 65
65
R8072 pp58-88
5/5/99 6:07 pm
Page 66
11 Dividends on equity shares
£ millions
1999
Interim paid 3.75p (1998: 3.25p as adjusted for share split)
Final proposed 9.25p (1998: 8.25p as adjusted for share split)
1998
50.8
43.9
125.2
111.7
Dividend paid to Employee Share Ownership Plan Trust (ESOP) shares
(0.7)
(0.5)
175.3
155.1
As part of the final dividend for 1998 a scrip dividend alternative was offered to shareholders at one share for every 134 ordinary shares
and was elected for by holders of 70.9 million shares. For the 1999 interim dividend a scrip dividend alternative was offered to
shareholders at one share for every 145 ordinary shares and was elected for by holders of 88.4 million shares.
12 Earnings per share
On 2 July 1998, following approval at the annual general meeting, the ordinary shares of 25p each in the capital of the Company were
divided into two ordinary shares of 12.5p each. Prior year earnings per share have been restated to take account of the share split.
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the year, excluding those held in the ESOP (see note 36) which are treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. These represent share options granted to employees where the exercise price is less than the average market
price of the Company’s shares during the year.
Supplementary earnings per share figures are presented. These exclude the effects of exceptional items in the year and are presented
to allow comparison to prior year on a like for like basis.
1999
Earnings
1998
Per share
amount
Earnings
£ millions
Weighted
average
number
of shares
millions
Per share
amount
£ millions
Weighted
average
number
of shares
millions
pence
436.9
1,351.2
32.3
386.4
1,343.6
28.7
pence
Basic earnings per share
Earnings attributable to ordinary shareholders
Effect of dilutive securities
Options
Convertible loan stock in subsidiary undertakings
25.5
(0.5)
(0.6)
14.6
–
–
(0.3)
–
Diluted earnings per share
Adjusted earnings
436.4
1,376.7
31.7
386.4
1,358.2
28.4
436.9
1,351.2
32.3
386.4
1,343.6
28.7
Supplementary earnings per share to exclude
exceptional items
Basic earnings per share
Effect of exceptionals
VAT release (post tax)
Profit on disposal of properties and other investments
(30.9)
(2.3)
(2.1)
(0.1)
(15.0)
–
–
(1.1)
Basic earnings per share before exceptional items
403.9
1,351.2
29.9
371.4
1,343.6
27.6
Diluted earnings per share
436.4
1,376.7
31.7
386.4
1,358.2
28.4
Effect of exceptionals
VAT release (post tax)
Profit on disposal of properties and other investments
Diluted earnings per share before exceptional items
66
(30.9)
(2.1)
403.4
(2.3)
Page 66
1,376.7
–
(0.1)
(15.0)
29.3
371.4
–
(1.1)
1,358.2
27.3
R8072 pp58-88
5/5/99 6:07 pm
Page 67
13 Intangible fixed assets
Group
Acquisition
Pharmacy
Total
Other
intangible
assets
–
–
–
–
Additions
257.9
8.9
266.8
2.9
At 30 January 1999
257.9
8.9
266.8
2.9
–
–
–
–
Goodwill
£ millions
Cost
At 1 February 1998
Amortisation
At 1 February 1998
Charge for year
(2.2)
(0.1)
(2.3)
(0.1)
At 30 January 1999
(2.2)
(0.1)
(2.3)
(0.1)
Net book amount
At 30 January 1999
255.7
8.8
264.5
2.8
At 1 February 1998
–
–
–
–
Land and
buildings
Fixtures,
fittings
and
equipment
Total
Fixtures,
fittings
and
equipment
1,226.0
1,259.9
2,485.9
5.3
14.5
5.1
19.6
–
Other intangible assets comprise publishing rights and licences.
14 Tangible fixed assets
Group
£ millions
Company
Cost or valuation
At 1 February 1998
Effect of foreign exchange rate changes
Transfers from work in progress
25.0
–
25.0
–
Subsidiary and business undertakings at date of acquisition
651.0
108.4
759.4
–
Additions
148.4
259.8
408.2
1.2
Disposals
(39.8)
(170.0)
(209.8)
(0.8)
Revaluation adjustment
At 30 January 1999
58.0
–
58.0
–
2,083.1
1,463.2
3,546.3
5.7
16.2
652.8
669.0
3.7
Depreciation
At 1 February 1998
0.4
3.7
4.1
–
Charge for year
3.7
134.9
138.6
0.8
(149.6)
(150.4)
(0.7)
Disposals
(0.8)
Revaluation adjustment
(0.4)
At 30 January 1999
19.1
641.8
660.9
3.8
At 30 January 1999
2,064.0
821.4
2,885.4
1.9
At 1 February 1998
1,209.8
607.1
1,816.9
1.6
At 30 January 1999
75.5
11.0
86.5
–
At 1 February 1998
36.1
1.0
37.1
–
–
(0.4)
–
Net book amount
Assets in the course of construction included above
The cost of tangible fixed assets includes £46.1m (1998: £19.3m) in respect of assets held under finance leases.
The related accumulated depreciation at the end of the year was £10.1m (1998: £2.7m).
The amount of interest capitalised in tangible fixed assets during the year was £3.1m (1998: £2.0m). The cumulative total of such
interest at the balance sheet date was £15.1m (1998: £12.1m).
Page 67
67
R8072 pp58-88
5/5/99 6:07 pm
Page 68
14 Tangible fixed assets continued
Land and buildings include investment properties as follows:
£ millions
Group
Cost or valuation
At 1 February 1998
88.7
Additions
33.0
Transfers from work in progress
17.7
Disposals
(4.0)
Revaluation surplus
0.4
At 30 January 1999
135.8
Freehold
Long
leasehold
Short
leasehold
Total
1999
Total
1998
1,156.9
533.9
222.3
36.1
1,415.3
1,104.5
90.4
43.5
667.8
121.5
1,690.8
312.7
79.6
2,083.1
1,226.0
–
–
19.1
19.1
16.2
At 30 January 1999
1,690.8
312.7
60.5
2,064.0
At 1 February 1998
958.5
193.8
57.5
£ millions
Land and buildings
At valuation
At cost
Aggregate depreciation
Net book amount
1,209.8
If land and buildings had not been revalued, the cost to the Group would have been:
£ millions
Cost
Aggregate depreciation
Net amount
1999
1998
1,675.7
881.3
22.9
21.9
1,652.8
859.4
During each of the last five years a representative sample of the freehold and long leasehold properties owned by Chartwell Land plc,
the Group’s property subsidiary, has been valued by external qualified valuers. Hillier Parker, International Real Estate Consultancy has
carried out a valuation of a representative sample at 30 November 1998 and based upon the results of these valuations there have
been internal valuations by qualified valuers employed by the Group of the remainder of Chartwell Land’s portfolio.
Properties with any element of Group occupancy are valued on the basis of existing use which does not take account of formal lease
arrangements with Group companies or the Group’s occupation of the premises. Properties without Group occupancy are valued on
the basis of open market value. These valuation bases comply with the RICS Appraisal and Valuation Manual.
A representative sample of the properties owned by the Darty group were valued by Galtier S.A., valuers and surveyors in Paris,
as at 31 December 1998. Based on the results of this sample the remaining properties were internally valued by the directors of Darty.
The basis of valuation is existing use value. The freehold and long leasehold properties owned by BUT S.A. have been valued by
DTZ Eurexi S.A., valuers and surveyors, as part of the acquisition fair value exercise. These values have been incorporated in the accounts.
As the Castorama merger was completed very close to the Group’s year end, an exercise to revalue land and buildings has not yet
been undertaken. An exercise to value land and buildings will be undertaken during 1999 for reflection next year.
The directors have resolved to incorporate these valuations into the accounts and the resulting revaluation adjustments have been
taken to the revaluation reserve. The revaluations during the year ended 30 January 1999 resulted in a revaluation surplus of £58.4m.
68
Page 68
R8072 pp58-88
5/5/99 6:07 pm
Page 69
15 Fixed asset investments
Group – Interests in joint ventures and associated undertakings
Investment in
joint ventures
Investment in
associates
8.1
20.1
–
10.6
Additions
3.8
–
Disposals
(0.9)
–
£ millions
Cost
At 1 February 1998
Acquisitions
Elevation to subsidiary undertaking
–
At 30 January 1999
(21.1)
(0.2)
1.1
10.8
10.7
(1.2)
6.0
0.6
2.5
Share of post acquisition reserves
At 1 February 1998
Share of retained profits in year
Elevation to subsidiary undertaking
–
(8.4)
–
0.4
At 30 January 1999
(0.6)
0.5
Group interest
At 30 January 1999
10.2
11.2
At 1 February 1998
6.9
26.1
Group – Other investments
ESOP
shares
(note 36)
Listed in
the UK
Listed
Overseas
Unlisted
Total
13.0
0.4
4.2
0.6
18.2
–
–
–
4.1
4.1
Additions
15.3
–
–
9.2
24.5
Disposals
(2.0)
–
–
(0.1)
(2.1)
£ millions
At 1 February 1998
Acquisitions
–
–
0.2
0.1
0.3
At 30 January 1999
26.3
0.4
4.4
13.9
45.0
Market value of listed investments at 30 January 1999
42.7
0.6
24.7
Within investments listed overseas, the Group owns 20.16% of Go Sport S.A. (sports leisurewear and equipment retailer), a company
listed and registered in France. The Group exercises no significant influence over the operations of Go Sport S.A. and hence reports its
interest as a cost of investment.
Company – Interests in group companies and own shares
ESOP
shares
(note 36)
Interests
in Group
Companies
Total
At 1 February 1998
13.0
1,469.8
1,482.8
46.9
62.2
£ millions
Additions
15.3
Disposals
(2.0)
At 30 January 1999
26.3
–
1,516.7
Page 69
(2.0)
1,543.0
69
R8072 pp58-88
5/5/99 6:07 pm
Page 70
15 Fixed asset investments continued
The following companies are the principal subsidiary undertakings, joint ventures and associated undertakings of the Group at
30 January 1999:
Country of
incorporation
and operation
% owned
and
voting rights
Subsidiaries
B&Q plc
Great Britain
+
BCC Holding Amstelveen B.V.
BUT S.A.*❖
Castorama Dubois Investissements S.C.A.
Chartwell Land plc†
Netherlands
France
France
Great Britain
100%
98.2%
+
100%
Comet Group PLC
Kingfisher France S.A.ø
Etablissements Darty et Fils S.A.
Financière Kingfisher S.A.
Electric City (Singapore) Pte Ltd
Entertainment UK Ltd
Halcyon Finance Ltd†
Kingfisher Asia Ltd
Kingfisher Insurance Ltd
New Vanden Borre S.A.
NOM1 S.A.❖
Superdrug Stores PLC
MVC Entertainment Ltd
Time Retail Finance Ltd†
Triptych Insurance NV
VCI plc†❖
Wegert-Verwaltungs GmbH & Co Beteilgungs – KG❖
Woolworths plc
Great Britain
France
France
France
Singapore
Great Britain
Great Britain
Hong Kong
Ireland
Belgium
Poland
Great Britain
Great Britain
Great Britain
Curaçao
Great Britain
Germany
Great Britain
100%
99.7%
100%
100%
100%
100%
100%
100%
100%
100%
66.7%
100%
100%
100%
100%
100%
60%
100%
100% ordinary
99.7% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
66.7% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
100% ordinary
60% ordinary
100% ordinary and
100% deferred
Joint ventures
B&Q International Co. Ltd❖
Cinema Club❖
Moonbeam Ltd❖
Menafinance S.A.
Dartem S.A.
DFT S.A.
Taiwan
Great Britain
Great Britain
France
France
France
50%
50%
50%
50%
50%
50%
50% ordinary
50% partnership
50% A ordinary
50% ordinary
50% ordinary
50% ordinary
Retailing
Entertainment media
Entertainment media
Financial services
Financial services
Mobile phones operator
Fidem S.A.❖
Hat Trick Films Ltd❖
Manuest S.A.
Eurcap S.A.
France
Great Britain
France
France
49%
49%
25%
49%
49% ordinary
49% B ordinary
25% ordinary
49% ordinary
Financial services
Entertainment media
Furniture manufacture
Insurance
Company
Description of
share classes owned
57.9% ordinary
and 100% special▼
100% ordinary
98.2% ordinary
57.9% ordinary
100% ordinary
Main activity
Retailing
Retailing
Retailing
Retailing
Property investment
and development
Retailing
Finance
Retailing
Finance
Retailing
Wholesaling
Finance
Far East buying
Insurance
Retailing
Retailing
Retailing
Retailing
Financial services
Insurance
Publishing/Distribution
Retailing
Retailing
† Held directly by Kingfisher plc.
* BUT S.A. has consolidated some franchisee operations in which it has less than 50% of the voting rights but exercises a dominant influence through franchise agreements in place.
❖ Owing to local conditions and to avoid undue delay in the presentation of the Group accounts, these companies made up their accounts to 31 December 1998.
+ The merged Castorama and B&Q group is 57.9% owned (54.6% fully diluted), with 50.05% voting rights.
▼ The special shares in B&Q are owned 100% by Castorama and are non-voting.
ø This company changed its name from Financière Darty SA on 4 January 1999.
All the companies incorporated in Great Britain are registered in England and Wales.
70
Page 70
R8072 pp58-88
5/5/99 6:07 pm
Page 71
16 Development work in progress and stocks
During the year £1.0m (1998: £1.0m) of interest was capitalised in development work in progress. At the year end development work
in progress includes £1.0m (1998: £0.7m) of capitalised interest. Stocks wholly comprise finished goods and goods for resale.
17 Debtors
Group
£ millions
Company
1999
1998
1999
1998
289.8
266.5
–
–
–
–
4,923.4
1,799.1
1.5
1.3
–
–
Trade debtors
Owed by subsidiary undertakings
Owed by joint ventures
Property debtors
8.2
3.9
–
–
Other debtors
164.5
68.4
–
12.2
Prepayments
144.8
106.9
0.1
0.5
608.8
447.0
4,923.5
1,811.8
–
27.9
–
27.9
Trade debtors
116.7
115.1
–
–
Other debtors
27.4
6.0
–
–
Advance corporation tax recoverable
Total debtors
144.1
149.0
–
27.9
752.9
596.0
4,923.5
1,839.7
18 Securitised consumer receivables
In January 1996, the Group entered into an agreement to securitise consumer receivables (which derive principally from the provision
of credit facilities by Time Retail Finance Ltd (TRF) to customers of the Group) through Time Finance Limited (TFL). TRF sells the
consumer receivables, with no impact on the profit and loss account, to TFL who issues Notes secured on those assets. The issue
terms of the Notes include provisions that their holders have no recourse to TRF or any other member of the Group. Neither TRF nor
any other Group company is obliged to support any losses, nor does it intend to. Principal and interest is repayable from, and secured
solely on, the consumer receivables. At 30 January 1999 the amount of consumer receivables securitised was £321.0m (1998: £189.9m)
raising funds of £247.4m (1998: £146.1m) and this is shown on the balance sheet using linked presentation.
19 Current asset investments
Group
£ millions
1999
1998
297.3
253.5
Deposits and investments
Deposited and listed in the United Kingdom
Deposited and listed overseas
14.4
1.2
311.7
254.7
The amounts shown above include cash deposits of £56.9m (1998: £17.7m), comprising certificates of deposit and money market
deposits, attracting interest rates based on LIBOR or EURIBOR, fixed for periods of up to six months. The remainder are investments in
debt securities of £254.8m (1998: £237.0m). These investments are primarily at floating rates of interest based on LIBOR or EURIBOR,
fixed for periods of up to six months. Investments of £81.7m (1998: £76.2m) are pledged to meet certain insurance liabilities.
Page 71
71
R8072 pp58-88
5/5/99 6:07 pm
Page 72
20 Creditors
Group
£ millions
Company
1999
1998
1999
1998
Bank loans and overdrafts
325.6
244.1
15.5
20.7
Trade creditors
964.5
343.6
–
–
Bills payable
223.6
29.9
223.6
29.9
–
–
3,425.7
734.9
Owed to subsidiary undertakings
Owed to joint ventures
3.7
–
–
–
Corporation tax
136.5
144.9
–
28.3
Other taxation and social security
321.5
226.2
0.1
0.2
Other creditors
138.1
109.6
1.0
0.4
Accruals and deferred income
467.8
398.4
45.1
36.9
Proposed dividend
125.2
111.7
125.2
111.7
Obligations under finance leases
19.5
6.9
–
–
2,726.0
1,615.3
3,836.2
963.0
Within bank loans and overdrafts an amount of £9.4m (1998: £nil) is secured over property, stock and other assets.
21 Creditors
Group
£ millions
Company
1999
1998
1999
1998
Eurosterling bond
199.0
198.8
199.0
198.8
Bank loans
429.5
44.0
243.9
26.7
External funding
628.5
242.8
442.9
225.5
91.2
75.4
–
–
Accruals and deferred income
Obligations under finance leases
49.1
9.4
–
–
768.8
327.6
442.9
225.5
External funding and finance leases fall due for repayment as follows:
Between one and two years
7.8
6.8
–
–
Between two and five years
416.6
37.2
243.9
26.7
After five years other than by instalments
204.1
198.8
199.0
198.8
External funding
628.5
242.8
442.9
225.5
39.1
7.6
–
–
10.0
1.8
–
–
49.1
9.4
Obligations under finance leases between two and five years
Obligations under finance leases over five years
A bank loan of £18.1m (1998: £23.4m) is repayable by semi-annual instalments to 22 June 2001 and has an implicit fixed interest rate
of 7.65%. Within bank loans an amount of £5.7m (1998: £nil) is secured over property, stock and other assets.
The £200m Eurosterling bond carries an annual coupon of 8.125%, which has been swapped into a floating rate interest obligation
against three month LIBOR. The bond matures on 14 February 2007.
72
Page 72
R8072 pp58-88
5/5/99 6:07 pm
Page 73
22 Interest rate and currency profile of gross borrowings
At 30 January 1999
Gross
borrowings
Floating
borrowings
Fixed
borrowings
Currency
£ millions
£ millions
Sterling
617.5
614.5
Euro
607.1
590.8
16.3
5.47
2.7
Other
21.7
18.2
3.5
6.06
1.9
1,246.3
1,223.5
22.8
5.93
4.8
Gross borrowings
£ millions
Weighted
average
interest rate
on fixed
borrowings
%
Weighted
average
time for
which rate
is fixed
Years
3.0
8.25
19.5
The floating rate borrowings are interest bearing borrowings at interest rates based upon LIBOR and EURIBOR, fixed for periods of up
to six months.
23 Interest rate and currency profile of financial net assets
At 30 January 1999
Total
assets
Floating
rate assets
Fixed rate
assets
Currency
£ millions
£ millions
£ millions
Sterling
347.7
314.5
–
Euro
203.0
193.0
3.2
Other
Financial net assets
Weighted
average
interest rate
on fixed
rate assets
%
Weighted
average
time for
which rate
is fixed
Years
Non
interest
bearing
assets
£ millions
–
–
33.2
4.50
3.2
6.8
2.2
2.1
–
–
–
0.1
552.9
509.6
3.2
4.50
3.2
40.1
Of which
Current asset investments
311.7
Cash at bank and in hand
241.2
552.9
24 Currency risk
After taking into account the effect of any hedging transactions entered into to manage currency exposures there were no significant
net foreign currency monetary assets or liabilities at the balance sheet date. Matched assets and liabilities are those that generate no
gain or loss in the profit and loss account, either because they are denominated in the same currency as the Group operations to
which they belong or because they qualify under SSAP20 as a foreign currency borrowing providing a hedge against a foreign equity
investment.
25 Maturity of borrowings
The maturity of the Group’s gross borrowings is as follows:
£ millions
Within one year
1999
1998
568.7
280.9
Between one and two years
7.8
6.8
Between two and five years
455.7
44.8
Over five years
214.1
200.6
1,246.3
533.1
Page 73
73
R8072 pp58-88
5/5/99 6:07 pm
Page 74
26 Borrowing facilities
At 30 January 1999 the Group had the following undrawn committed borrowing facilities available:
£ millions
Expiring within one year
Expiring in more than one year but no more than two years
Expiring beyond two years
1999
1998
470.0
233.6
–
–
182.5
373.3
652.5
606.9
27 Financial assets and liabilites
Set out below is a year-end comparison of fair and book values of all the Group’s financial instruments by category. Where available,
market values have been used to determine fair values. Where market values are not available, fair values have been calculated by
discounting cash flows at prevailing interest and exchange rates.
1999
1998
£ millions
Book
Value
Fair
Value
Book
Value
Fair
Value
Cash deposits
56.9
56.9
17.7
17.7
Debt securities
254.8
254.9
237.0
237.0
Short-term borrowings and current portion of long-term debt
(568.7)
(568.7)
(280.9)
(280.9)
Long-term borrowings
(677.6)
(695.4)
(252.2)
(241.3)
Interest rate swaps and similar instruments
–
Forward foreign currency contracts
–
(934.6)
(0.7)
–
(1.7)
(0.1)
(0.1)
(0.1)
(953.1)
(278.5)
(269.3)
28 Hedges
Derivative financial instruments are accounted for using hedge accounting to the extent that they are held to hedge a financial asset or
liability. Where such instruments do not hedge an underlying asset or liability, they are accounted for using fair value accounting.
Gains
Losses
£ millions
Unrecognised gains and losses on hedges at 1 February 1998
Unrecognised gains and losses on hedges at acquisition
Total net
gains/
(losses)
0.1
(1.8)
(1.7)
–
(1.0)
(1.0)
0.1
(1.8)
(1.7)
–
(1.0)
(1.0)
Gains and losses arising in previous years or pre-acquisition periods that were
recognised in the period to 30 January 1999
Gains and losses arising in the previous years or pre-acquisition periods that were
not recognised in the period to 30 January 1999
Gains and losses arising in the period ending 30 January 1999 that were
not recognised in the period to 30 January 1999
0.3
Unrecognised gains and losses on hedges at 30 January 1999
–
0.3
0.3
(1.0)
(0.7)
Gains and losses expected to be recognised within one year
0.1
(0.1)
Gains and losses expected to be recognised after one year
0.2
(0.9)
(0.7)
0.3
(1.0)
(0.7)
Of which
74
Page 74
–
R8072 pp58-88
5/5/99 6:07 pm
Page 75
29 Provisions for liabilities and charges
Pensions
Deferred
tax
Norweb
postacquisition
reorganisation
Norweb
preacquisition
Onerous
property
contracts
Total
6.7
1.1
0.9
1.9
3.5
14.1
(0.2)
(0.6)
–
–
£ millions
Balance at 1 February 1998
Transfer from profit and loss account
Acquisitions of subsidiaries
Utilised in year
Transfer from creditors
Balance at 30 January 1999
–
4.3
–
–
–
–
(0.3)
–
(1.9)
(0.8)
–
4.3
(0.4)
(2.6)
–
–
–
–
6.8
6.8
11.0
0.9
–
–
9.9
21.8
1999
1998
42.8
40.3
81.5
99.5
(20.8)
6.1
£ millions
Deferred taxation not provided
Accelerated capital allowances
Potential chargeable gains on properties
Other
103.5
145.9
Within the pensions provision, the final salary pension fund provision for the UK pension scheme has remained unchanged at £6.7m.
This provision arises through accounting for the UK pension costs under SSAP24 (see note 34). A pension provision of £4.3m in
companies acquired during the year, again based on UK accounting for pension costs, is shown as an addition.
The deferred tax provision represents £0.9m (1998: £1.1m) in respect of overseas tax on planned future remittances of the
accumulated reserves of overseas subsidiary undertakings. Except for the above, deferred tax has not been provided on earnings
retained overseas where it is not currently intended to remit these earnings to the UK.
The NORWEB post-acquisition provision related to expected redundancies on integration of the operations of NORWEB Retail
and Comet Group PLC. The businesses are now fully integrated, and a £0.6m surplus has been released in the year. The NORWEB
pre-acquisition provision related to planned redundancies and asset write-offs already committed as part of the NORWEB high street
business closure at the time that NORWEB Retail was acquired by the Group. The redundancies and asset decommissioning have now
taken place and the provision fully utilised. There will be no further ex-NORWEB Retail redundancies relating to the high street closure.
Within the onerous property contracts provision, the Group has provided against future liabilities for all properties sublet at a shortfall
and long term idle properties. Amounts have been reclassified from creditors to provisions and prior year figures have not been
restated. The provision is based on the value of future cash outflows relating to rent, rates and service charges. Due to the uncertainty
relating to the timing of disposals and the related difficulty in predicting future successes, prudent estimates have been included in the
assessment of the provision requirement.
Page 75
75
R8072 pp58-88
5/5/99 6:07 pm
Page 76
30 Called up share capital
Number of ordinary
shares of 12.5p each
1999
1998
Authorised at 30 January 1999 and 31 January 1998
1,600,000,000
200.0
200.0
Allotted and fully paid at start of year
£ millions
1,352,464,508
169.0
168.0
Scrip dividend alternative
1,667,367
0.2
0.1
Options exercised under Sharesave at between £1.845 and £4.380 per share
2,244,550
0.3
0.3
Options exercised under the Executive Share Option Scheme (1983)
at between £1.330 and £3.285 per share
Allotted and fully paid at the end of the year
3,506,560
0.5
0.6
1,359,882,985
170.0
169.0
divided into two ordinary shares of 12.5p.
31 Reserves
Group
£ millions
At 1 February 1998
Shares issued under option schemes
Share
premium
account
Revaluation
reserve
Nondistributable
reserve
Profit
and loss
account
Total
225.1
342.0
–
1,034.5
1,601.6
12.6
–
–
–
12.6
–
–
–
9.1
9.1
Retained profit for the financial year
–
–
–
261.6
261.6
Surplus on revaluation of land and buildings
–
58.4
–
–
58.4
Prior year property revaluation surplus now realised
–
(5.0)
–
5.0
–
Non-distributable reserve arising on the combination of B&Q and Castorama
(see note 37(a))
–
–
146.3
–
146.3
Minority increase in Darty
–
–
–
1.0
1.0
At 30 January 1999
–
–
–
237.7
395.4
146.3
(10.0)
1,301.2
(10.0)
2,080.6
The cumulative amount of goodwill written off directly to reserves in respect of undertakings still within the Group is £1,541.2m
(1998: £1,541.2m).
Included in the revaluation reserve is an unrealised deficit of £3.3m relating to investment properties.
Company
£ millions
At 1 February 1998
Share
premium
account
Nondistributable
reserve
Profit
and loss
account
Total
225.1
936.0
808.9
1,970.0
12.6
–
–
12.6
–
–
9.1
9.1
Retained profit
–
–
27.6
27.6
237.7
936.0
845.6
2,019.3
At 30 January 1999
The Company profit on ordinary activities after taxation was £203.6m (1998: £192.9m).
The non-distributable reserve represents the premium on the issue of convertible loan stock in 1993, and merger reserves relating to
the acquisitions of Darty and Superdrug.
76
Page 76
R8072 pp58-88
5/5/99 6:07 pm
Page 77
32 Reconciliation of movement in equity shareholders’ funds
£ millions
1999
Profit for the financial year attributable to the members of Kingfisher plc
Dividends
Exchange loss
1998
436.9
386.4
(175.3)
(155.1)
261.6
231.3
(10.0)
(5.9)
Other recognised gains relating to the year
58.4
114.1
13.4
18.0
Scrip issue
Write-back of goodwill on disposal of operations
Goodwill written off
Non-distributable reserve arising on the combination of B&Q and Castorama
9.3
3.0
–
10.4
–
(32.8)
146.3
Movement in Darty minority interest
–
1.0
–
480.0
338.1
Opening shareholders’ funds
1,770.6
1,432.5
Closing shareholders’ funds
2,250.6
1,770.6
Net addition to shareholders’ funds
33 Consolidated cash flow
(a) Reconciliation of operating profit to net cash flow from operating activities
£ millions
1999
1998
632.5
514.5
Depreciation and amortisation
141.0
126.8
Increase in development work in progress
(15.8)
(13.2)
Increase in stocks
(94.3)
(10.3)
Decrease/(increase) in debtors
66.1
(110.5)
(Decrease)/increase in creditors
(46.0)
91.1
Loss on disposal of fixed assets
14.8
6.6
698.3
605.0
Net cash inflow from operating activities
(b) Analysis of changes in cash
1999
£ millions
At start of year
Acquisitions
Change in short-term cash deposits
1998
Net
cash
Liquid
resources
Financing
Total
Net
cash
Liquid
resources
Financing
Total
58.7
16.2
–
74.9
33.2
38.6
–
71.8
–
154.0
–
154.0
0.6
(2.0)
–
(22.3)
–
(1.4)
–
(1.4)
–
–
(1.1)
(21.3)
–
–
–
(2.5)
–
(22.3)
–
(21.3)
Net cash inflow
36.0
–
–
36.0
26.9
–
–
26.9
At end of year
95.3
145.9
–
241.2
58.7
16.2
–
74.9
Page 77
77
R8072 pp58-88
5/5/99 6:07 pm
Page 78
33 Consolidated cash flow continued
(c) Analysis of changes in investments
1999
1998
Net
cash
Liquid
resources
Financing
Total
Net
cash
Liquid
resources
Financing
Total
At start of year
–
254.7
–
254.7
–
208.2
–
208.2
Acquisitions
–
14.4
–
14.4
–
–
–
–
£ millions
Change in market value
–
(0.5)
–
(0.5)
–
(0.2)
–
(0.2)
Net purchase of investments
–
43.1
–
43.1
–
46.7
–
46.7
At end of year
311.7
311.7
254.7
254.7
Investments included as liquid resources comprise amounts held to meet current and future claims under insurance policies
underwritten by the Group (note 19).
(d) Analysis of changes in debt*
1999
£ millions
At start of year
Acquisitions
Net cash outflow
At end of year
Net
cash
Liquid
resources
(215.8)
1998
Financing
Total
–
(317.3)
(533.1)
–
–
(209.4)
(209.4)
1.9
–
(81.8)
9.3
–
–
–
–
(433.2)
(295.7)
Net
cash
Liquid
resources
(135.3)
–
Financing
(543.9)
Total
(679.2)
–
–
–
–
11.2
1.6
–
13.5
15.1
(81.8)
(82.1)
(433.2)
(950.6) (1,246.3)
–
–
–
–
213.1
213.1
(317.3)
(533.1)
(215.8)
(82.1)
*Includes bank loans and overdrafts, bills payable, medium-term notes, commercial paper, and all external funding, and finance lease
creditors in note 21.
(e) Total net debt
1999
£ millions
At start of year
Net cash outflow
Net
cash
Liquid
resources
(157.1)
270.9
(45.8)
–
Acquisitions
–
168.4
Changes in short-term cash deposits
–
(22.3)
Net purchase of investments
–
Change in market value
–
At end of year
–
2.5
(200.4)
1998
Financing
(317.3)
–
Net
cash
Liquid
resources
(102.1)
246.8
(45.8)
(55.2)
–
–
–
–
(41.0)
–
(22.3)
–
(21.3)
43.1
–
43.1
–
(0.5)
–
(0.5)
–
–
457.6
(433.2)
9.3
(950.6)
Financing
(203.5)
–
(2.0)
(209.4)
Total
(433.2)
9.8
(693.4)
–
(157.1)
–
46.7
(0.2)
–
(0.2)
270.9
213.1
213.1
13.5
12.6
(317.3)
(203.5)
The consideration for the acquisition of 57.9% of the issued share capital of Castorama Dubois Investissements S.C.A. consisted
Page 78
–
46.7
(f) Non-cash transactions
78
(55.2)
(21.3)
(1.1)
of 100% of the ordinary share capital of B&Q plc. Further details of the acquisition are set out in note 37(a).
(399.2)
–
–
0.2
(543.9)
Total
R8072 pp58-88
5/5/99 6:07 pm
Page 79
34 Pension costs
The Group operates a variety of pension arrangements, covering both funded and unfunded defined benefit schemes and funded
defined contribution schemes. By far the most significant are the funded defined contribution and defined benefits schemes for the
Group’s UK employees.
The total pension charge in the profit and loss account (see note 8) of £29.4m (1998: £25.8m) includes £2.2m (1998: £2.4m) for the
UK defined contribution scheme.
A formal actuarial valuation of the UK defined benefits scheme was carried out as at 31 March 1998, using the projected unit method
of funding. In this valuation, the assets were taken at their market value of £908m (including AVCs). A value was placed on the liabilities
by discounting the anticipated future benefits, including allowance where appropriate for future increases in pensions and pensionable
salaries, using assumptions derived by reference to market conditions as at 31 March 1998. On this basis, the assets were sufficient to
cover over 104% of the scheme’s liabilities before allowing for the cost of a special increase for the oldest and longest retired pensioners
effective from 1 April 1999. The next valuation will be made on or before 31 March 2001.
The pension cost for this scheme shown in the profit and loss account of £25.6m (1998: £20.2m) is assessed in accordance with the
advice of an actuary, using the projected unit method of funding. The principal assumptions adopted were that over the long term,
assets would return 3.75% pa in excess of inflation with dividends on UK equities increasing in real terms by 1.1% pa, pensionable pay
would increase in real terms by 1.68% pa and increases to pensions in payment would lag price inflation by 0.25% pa.
There are also funded defined benefits arrangements covering senior executives in France, for which the charge in the profit and loss
account was £1.2m (1998: £3.2m). A further £0.4m charge (1998: £nil) has been reflected in the profit and loss account in respect of
other overseas pension arrangements.
35 Commitments
Group
Land and Plant and
buildings equipment
1999
1999
£ millions
Land and
buildings
1998
Plant and
equipment
1998
12.6
2.5
Annual commitments under operating leases
Expiring within one year
Expiring between two and five years
Expiring in five years or more
30.6
9.6
99.2
26.6
18.5
7.4
319.3
–
229.1
–
The Company had an annual commitment expiring in more than five years of £1.0m (1998: £1.0m) in respect of land and buildings.
Capital commitments contracted but not provided for by the Group amounted to £88.8m (1998: £45.3m). The Company has no
capital commitments.
Page 79
79
R8072 pp58-88
5/5/99 6:07 pm
Page 80
36 Share options
The granting of all options is made by the Remuneration Committee, which consists solely of non-executive directors.
Under the Executive and Phantom Share Option Schemes, participants receive an annual allocation of options based on their position
in the Group. In granting options, the Remuneration Committee has regard to both individual and Company performance. The option
price is the market price on the day an offer is made; there is no discount. Options are capable of exercise after three years and within
10 years of the date of grant. On the exercise of phantom options, applicants receive in cash the increase in value of the allocated
number of notional shares in the Company. In total, 311 executives held various options as at 30 January 1999. In addition, all permanent
employees in service on 19 March 1997 were granted options over 400 shares in both 1997 and 1998. These options are within the
Executive Share Option Scheme.
Under ShareSave, eligible employees can enter into an Inland Revenue approved savings contract with a building society for a period of
three or five years, whereby shares may be acquired with repayment under the contract. The option price is the average market price
over the three days shortly before an offer is made, discounted by a maximum of 20%. Options are capable of exercise after three or
five years. There are 14,428 employees in ShareSave.
The rules of the Executive, Phantom and ShareSave Share Option Schemes include provisions for the early exercise of options in
certain circumstances.
80
Page 80
R8072 pp58-88
5/5/99 6:07 pm
Page 81
divided into two ordinary shares of 12.5p each. Options to subscribe under the various schemes for ordinary shares of 12.5p, including
those noted in directors’ interests in the Remuneration Report on pages 49 to 51, are shown in the table below. Prior year figures have
been restated to take account of the share split.
Executive and phantom share options
All-employee
ShareSave
Date options
granted
Subscription
price per
share
(pence)
No. of
persons
holding
options
Exercisable
from
08/05/89
133.0
–
08/05/92
27/10/89
140.3
1
23/04/91
220.0
2
Number of shares for
which rights are exercisable
1999
1998
–
27,066
27/10/92
3,420
10,550
23/04/94
45,906
45,906
24/10/91
263.3
1
24/10/94
701,314
733,038
30/04/92
223.5
9
30/04/95
71,934
147,096
15/10/92
229.3
1
15/10/95
444,748
444,748
26/04/93
280.0
45
26/04/96
194,978
443,794
26/05/93
280.0
1
26/05/96
80,910
80,910
20/10/93
327.5
2
20/10/96
27,528
118,566
29/04/94
288.5
23
29/04/97
632,956
1,233,914
15/11/94
238.0
29
15/11/97
1,232,594
1,597,594
28/04/95
225.0
52
28/04/98
917,376
3,403,966
30/10/95
250.0
31
30/10/98
1,266,414
1,587,626
01/05/96
291.5
185
01/05/99
3,719,826
3,835,504
25/10/96
320.0
44
25/10/99
1,294,154
1,305,638
16/04/97
328.5
203
16/04/00
3,998,262
4,151,590
23/10/97
328.5
13
16/04/00
8,594
8,994
23/10/97
405.0
63
23/10/00
1,337,892
1,350,682
27/04/98
549.5
239
27/04/01
3,160,104
–
21/07/98
496.5
5
21/07/01
2,000
–
26/10/98
524.0
63
26/10/01
801,862
–
19,942,772
20,527,182
16/04/97
328.5
56,054
16/04/00
21,221,600
24,618,400
21/07/98
496.5
51,402
21/07/01
20,560,800
–
41,782,400
24,618,400
17/05/92
219.0
–
01/08/97
–
68,920
19/05/93
235.0
306
01/08/98
242,463
2,279,066
14/05/94
239.5
2,388
01/08/99
1,970,175
2,068,750
05/05/95
184.5
2,418
01/08/00
3,369,548
3,583,008
17/05/96
233.5
3,207
01/08/01
3,070,022
3,334,198
09/05/97
264.5
3,832
01/08/00
1,893,759
2,146,740
09/05/97
264.5
3,019
01/08/02
2,822,804
3,091,802
07/05/98
438.0
5,217
01/08/01
1,791,971
–
07/05/98
438.0
3,808
01/08/03
2,490,325
–
17,651,067
16,572,484
79,376,239
61,718,066
The table above includes options which will be met by shares held in the Employees Share Ownership Plan Trust (ESOP).
Page 81
81
R8072 pp58-88
5/5/99 6:07 pm
Page 82
36 Share options continued
The Employee Share Ownership Trust (ESOP)
The Kingfisher ESOP is a discretionary trust which has been funded by a £31.6m interest free loan from the Company to acquire shares
in Kingfisher plc.
The ESOP’s current shareholding is 6,835,559 shares valued at £42.7m on 30 January 1999. Dividends on these shares have not been
waived. The cost of running the Trust is included in the profit and loss account. Where options have been granted with an exercise
price below the average purchase price, the difference has been provided in full.
The ESOP has undertaken:
• to transfer shares to employees on exercise of various options granted under the Executive Share Option Scheme; and
• to pay the cash sum due on exercise of rights granted under the Phantom Share Option Scheme. (The ESOP will realise the due sum
if necessary by selling in the market sufficient of its shares to realise that sum.)
As at 30 January 1999, the liabilities of the ESOP are as follows:
Date options
granted
Executive
Phantom
Subscription
price per
share
(pence)
Exercisable
from
Number of shares for
which rights are exercisable
1999
1998
29/04/94
288.5
14
29/04/97
175,972
443,330
15/11/94
238.0
3
15/11/97
59,140
260,164
27/04/98
549.5
232
27/04/01
3,019,730
–
3,254,842
703,494
30/04/92
223.5
7
30/04/95
36,948
112,110
26/04/93
280.0
26
26/04/96
94,044
179,378
26/05/93
280.0
1
26/05/96
80,910
80,910
15/11/94
238.0
1
15/11/97
33,892
33,892
28/04/95
225.0
2
28/04/98
58,434
113,988
30/10/95
250.0
–
30/10/98
–
19,212
01/05/96
291.5
2
01/05/99
78,398
95,584
25/10/96
320.0
–
25/10/99
–
11,484
16/04/97
328.5
4
16/04/00
103,388
129,824
23/10/97
328.5
13
23/10/00
8,594
8,994
23/10/97
405.0
3
23/10/00
106,154
93,192
27/04/98
549.5
7
27/04/01
140,374
–
21/07/98
496.5
5
21/07/01
2,000
–
26/10/98
524.0
1
26/10/01
7,714
–
Unallocated
82
No. of
persons
holding
options
Page 82
750,850
878,568
2,829,867
3,032,022
6,835,559
4,614,084
R8072 pp58-88
5/5/99 6:07 pm
Page 83
37 Acquisitions
(a) Merger of B&Q and Castorama
On 18 December 1998, the effective date of acquisition, the Group completed the combination of B&Q plc with Castorama Dubois
Investissements S.C.A. (Castorama). The transaction has been treated as an acquisition and was effected by the transfer by the Group
of its 100% interest in B&Q in exchange for a 57.9% interest (54.6% on a fully diluted basis) in the consequently enlarged Castorama
group. The transaction was effected by an exchange of shares, being new shares in Castorama for the Group’s shares in B&Q, and the
book value of the 42.1% of the assets of B&Q at the date of acquisition has been treated as the cost of that investment. The difference
between the consideration and the fair value of the Castorama net assets received has been treated as a non-distributable reserve.
Since the date of acquisition, Castorama contributed £140.8m to turnover, £3.4m to profit before interest and £2.3m to profit after
interest. Castorama contributed £31.1m to the Group’s net operating cash flows, paid £1.1m in respect of interest, utilised £3.7m for
capital expenditure and incurred £6.5m in management of liquid resources.
A summarised profit and loss account for Castorama for the period from 1 January 1998 to completion of the merger is detailed in the
table below:
£ millions
Sales
2,102.1
Operating profit
98.8
Taxation
(42.4)
Profit after taxation
56.4
Minority interest
–
Profit after taxation and minority interest
56.4
The statement of total recognised gains and losses for the same period is:
£ millions
Profit for the financial year
56.4
Unrealised surplus on revaluation of properties
–
Foreign exchange loss
(17.6)
Total recognised gains and losses relating to the year
38.8
In its last financial year to 31 December 1997, Castorama made a profit after tax and minority interests of £36.1m.
The above results have been translated at the exchange rates of £1: FF 9.622 for the year ended 31 December 1998 and £1: FF 9.656
for the year ended 31 December 1997.
The pre-acquisition figures quoted above are stated before any adjustments for Kingfisher accounting policies and were prepared under
local accounting principles.
Page 83
83
R8072 pp58-88
5/5/99 6:07 pm
Page 84
37 Acquisitions continued
The details of the transaction adjustments are set out in the table below. The fair value adjustments are of a provisional nature, because
the timing of the acquisition has meant that it has not been possible to complete the investigation for determining fair values. The exercise
will be completed in 1999 and any further fair value adjustments will be made in next year’s accounts.
Book
value
£ millions
Tangible fixed assets
Fair value adjustments:
Revaluations
Accounting
policy
alignments
Fair value
to the
Group
614.3
–
84.8
699.1
1.6
–
–
1.6
Stocks
400.6
–
–
400.6
Other current assets
312.7
–
1.2
313.9
(862.8)
–
(23.5)
(886.3)
466.4
–
62.5
528.9
Investments
Creditors
Castorama net assets
B&Q net assets on completion
325.5
Reserve
arising
£ millions
Share of Castorama net assets acquired (57.9% of £528.9m)
306.2
Share of B&Q net assets given up (42.1% of £325.5m)
(137.0)
Transaction expenses
(22.9)
Non-distributable reserve arising
146.3
Accounting policy alignments have been made to the books of Castorama as at 31 December 1998 principally comprising the reversal
of depreciation on freehold buildings and the restatement of deferred tax from a full provision basis to a partial provision basis.
Deferred tax assets arising on unutilised tax losses and charges to the consolidated profit and loss account on which tax relief will be
available in future years have been eliminated.
As the Castorama merger was completed very close to the Group’s year end, an exercise to revalue land and buildings has not been
undertaken. A full valuation exercise will be undertaken during 1999 for reflection next year. Land and buildings are shown at cost in the
above provisional fair value table.
The book values of the assets and liabilities have been translated at the actual exchange rate as at 31 December 1998 of £1: FF 9.241.
(b) Acquisition of BUT S.A.
On 24 September 1998 the Group increased its shareholding in BUT S.A., a major French furniture and electrical retailer, from 26% to
61.7%. Following the compulsory acquisition procedures required in France, a public offer was made for the remaining shares which
went unconditional on 13 October 1998. At 30 January 1999, the Group held 98.2% of the BUT S.A. share capital.
Acquisition accounting was used for this transaction, and the accounting date of the acquisition has been taken as 30 September 1998.
From 30 September 1998 to 31 December 1998, BUT S.A. contributed £80.3m to turnover, £10.9m to profit before interest and
£10.8m to profit after interest. BUT S.A. absorbed £1.8m of the Group’s net operating cash flows utilised £3.0m on capital expenditure
and generated £24.1m from management of liquid resources.
In its last financial year to 31 December 1997, BUT S.A. made a profit after tax and minority interests of £13.8m. For the period since
that date to the date of acquisition, BUT S.A. made a profit after tax and minority interests of £10.0m.
The above results have been translated at the exchange rates of £1: FF 9.622 for the period to 30 September 1998 and £1: FF 9.656 for
the year ended 31 December 1997.
The pre-acquisition figures quoted above are stated before any adjustment for Kingfisher accounting policies and were prepared under
84
Page 84
R8072 pp58-88
5/5/99 6:07 pm
Page 85
Details of the transaction, showing the fair value adjustments are set out in the table below:
Book
value
£ millions
Revaluations
Accounting
policy
alignments
Fair value
to the
Group
Intangible fixed assets
21.4
–
43.2
11.6
3.6
58.4
4.1
–
5.9
10.0
Investments
(21.4)
–
Stocks
49.3
–
1.6
50.9
81.0
0.4
2.2
83.6
(72.7)
0.9
(11.3)
(83.1)
126.3
12.9
(19.4)
119.8
Creditors
Goodwill
arising
£ millions
Consideration
309.8
Net assets acquired (98.2% of £119.8m)
(117.6)
Total goodwill (of which £59.4m written off against reserves in 1996/7)
192.2
Consideration satisfied by:
Cash (including £4.4m acquisition costs)
309.8
Accounting policy alignments to intangible fixed assets eliminate purchased goodwill arising prior to acquisition.
Revaluations of tangible fixed assets reflect the valuation of properties to existing use basis.
Revaluation adjustments in respect of current asset investments comprise the valuation of marketable securities to market value net of
a reversal of the related deferred tax asset and revaluation of deferred rebate income accruals.
Accounting policy alignments of material nature have been made to fully consolidate two further subsidiaries and to equity account for
an associate in line with FRS 2 – “Subsidiary Undertakings” and FRS 9 – “Associates and Joint Ventures.”
The book value of the assets and liabilities have been translated at the actual exchange rate as at 30 September 1998 of £1: FF 9.518.
(c) Acquisition of Wegert
On 29 June 1998 the Group acquired a 60% interest in Wegert-Verwaltungs GmbH & Co Beteiligungs-KG (Wegert), a German electrical
retailer. Simultaneously, Wegert purchased the entire share capital of the German electrical retailer ProMarkt Holding GmbH (ProMarkt)
using cash from its own resources for the equivalent of £14.5m. These transactions have been accounted for using acquisition accounting.
From the date of acquisition to 31 December 1998, Wegert and ProMarkt have been merged and together contributed £253.0m to
turnover, £7.5m to profit before interest and £6.8m to profit after interest. The enlarged company also contributed £17.8m to the
Group’s net operating cash flows, paid £0.7m in respect of interest and utilised £2.6m on capital expenditure.
Prior to the acquisition Wegert and ProMarkt traded separately. In the last full financial year to 31 December 1997, Wegert made a
profit after tax and minority interests of £6.5m and Promarkt made a profit after tax and minority interests of £1.9m. For the period
since that date to the date of acquisition, Wegert made a loss after tax and minority interests of £1.2m and ProMarkt made a loss after
tax and minority interests of £4.6m.
The above results have been translated at exchange rates of £1: DM 2.844 for the period from 1 January 1998 to acquisition and
£1: DM 2.866 for the year ended 31 December 1997.
The pre-acquisition figures quoted above are stated before any adjustment for Kingfisher accounting policies and were prepared under
Page 85
85
R8072 pp58-88
5/5/99 6:07 pm
Page 86
Details of these transactions showing fair value adjustments are set out in the table below:
Book
value
£ millions
Revaluations
Accounting
policy
alignments
8.6
–
(8.6)
17.7
–
7.4
Investments
3.5
Stocks
67.5
Creditors
–
(2.6)
Fair value
to the
Group
–
25.1
–
3.5
–
64.9
24.0
–
(0.7)
23.3
(101.9)
–
(8.3)
(110.2)
19.4
(2.6)
(10.2)
6.6
Goodwill
arising
£ millions
Consideration
54.7
Net assets acquired (60% of £6.6m)
(4.1)
Goodwill
50.6
Cash (including £2.7m acquisition expenses)
54.7
The fair value revaluation adjustment was made in the books of Wegert at acquisition in respect of unprovided risks relating to slow
moving stocks and stocks with decreasing sales prices.
Accounting policy alignments have been made in the books of Wegert to eliminate internally generated goodwill, to eliminate historical
acquisition goodwill, to apply UK finance lease accounting to a property asset, to write off pre-opening expenses capitalised on loss
making stores and to apply UK pension accounting.
The book values of the assets and liabilities have been translated using the exchange rate at the date of acquisition of £1: DM 2.910.
(d) Acquisition of VCI plc
VCI plc, a UK publishing and distribution group, was acquired by means of a public cash offer which became unconditional on
6 November 1998, the effective date of the acquisition. Acquisition accounting has been used for the transaction.
From the date of acquisition to 31 December 1998, VCI contributed £16.9m to external turnover, £0.5m to profit before interest and
£0.2m to profit after interest. VCI contributed £10.5m to the Group’s net operating cash flows, paid £0.3m in respect of interest, and
repaid financing of £21.3m.
In its last financial year to 31 December 1997, VCI made a profit after tax and minority interests of £5.2m. For the period since that
date to the date of acquisition, VCI made a loss after tax and minority interests of £3.9m.
86
Page 86
R8072 pp58-88
5/5/99 6:07 pm
Page 87
The details of the transaction showing fair value adjustments are set out in the table below:
Book
value
Revaluations
Fair value
to the
Group
£ millions
1.4
1.5
2.9
5.6
0.4
6.0
Stocks
Rights, advance royalties and production costs
Creditors
7.3
(3.8)
3.5
24.0
(9.9)
14.1
26.6
(2.5)
24.1
(58.9)
(2.9)
(61.8)
6.0
(17.2)
(11.2)
Goodwill
arising
£ millions
Consideration
48.1
Share of net liabilities acquired (100%)
11.2
Goodwill
59.3
Cash (including £1.3m acquisition costs)
48.1
The revaluation of intangible assets reflects the recognition of a £2.3m licence asset, previously written off as goodwill to reserves, less a
write-down to estimated net realisable value of other rights. Revaluation of a freehold property gave rise to a £0.4m surplus.
Stocks, rights, advance royalties and production costs have been written down to net realisable value. Irrecoverable ACT and amounts
due from associated undertakings have been written off. Within creditors, further provision for stock returns have been made.
There were no adjustments for alignment of accounting policies.
(e) Other acquisitions
The Group made three further acquisitions in the year being Electric City, a Singaporean electrical retailer on 28 October 1998, NOMI,
a Polish DIY retailer on 4 November 1998 and F-Beat Records Ltd, a recorded music company, on 6 April 1998. Acquisition accounting
has been used for these transactions.
£ millions
Net assets acquired
4.8
Accounting policy alignments
(0.9)
Revaluations
(0.7)
3.2
Goodwill
arising
£ millions
Consideration satisfied by cash (including £1.3m of acquisition costs)
18.4
Net assets acquired
(3.2)
Goodwill
15.2
Page 87
87
R8072 pp58-88
5/5/99 6:07 pm
Page 88
(f) Total acquisition goodwill
A summary of the total acquisition goodwill arising in the year is shown in the table below:
£ millions
Goodwill arising on acquisition of:
BUT S.A.
132.8
Wegert
50.6
VCI plc
59.3
Other acquisitions
15.2
257.9
38 Related party transactions
During the year the Company and its subsidiaries carried out a number of transactions with related parties in the normal course
of business and on an arm’s length basis. The names of the related parties, the nature of these transactions and their total value
is shown below:
Value of
transactions
Receivable/
(Payable)
at year end
Provision of employee services
234
234
Sale of store fixtures
191
191
£ thousands
Transactions with B&Q International Co. in which the Group holds a 50% interest:
Transactions with Cinema Club in which the Group holds a 50% interest:
Provision of administration and distribution services
299
Turnover payable less royalties
–
(1,835)
(3,732)
1,054
1,054
24
24
Transactions with Menafinance S.A. in which the Group holds a 50% interest:
Loan
Loan interest
The Company provides administrative services to the Group’s pension schemes. The amounts charged to the schemes and the balances
outstanding at the year end were:
Kingfisher Pension Scheme
912
405
Kingfisher Retirement Trust
22
12
88
Page 88
R8072 pp89-ibc
5/5/99 1:56 pm
Page 89
Statement of the directors’ responsibilities
The following statement is made with a view to distinguishing for shareholders the respective responsibilities of the directors and the
auditors in relation to the financial statements.
The directors are required by company law to prepare financial statements for each financial year which give a true and fair view of the
state of affairs of the Company and Group as at the end of the financial year and of the profit for the year to that date. In preparing the
financial statements the directors are required:
–
to ensure that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the
Company and which enable them to ensure that the financial statements comply with the Companies Act 1985
–
to take such steps as are reasonably open to them to safeguard the assets of the Company and Group and to prevent and detect
fraud and other irregularities
–
to apply suitable accounting policies in a consistent manner and supported by reasonable and prudent judgements and estimates
where necessary
–
to comply with all applicable accounting standards (except where any departures from this requirement are explained in the notes
to the financial statements).
Page 89
89
R8072 pp89-ibc
5/5/99 1:56 pm
Page 90
Report of the auditors to the members of Kingfisher plc
We have audited the financial statements on pages 54 to 88.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report, as described on page 89. Our responsibilities, as independent auditors,
are established by statute, the Auditing Practices Board, the Listing Rules of the London Stock Exchange and our profession’s ethical
guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance
with the Companies Act. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if
the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our
audit, or if information specified by law or the Listing Rules regarding directors’ remuneration and transactions is not disclosed.
We read the other information contained in the annual report and consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial statements.
We review whether the statement on page 44 reflects the Company’s compliance with those provisions of the Combined Code
specified for our review by the London Stock Exchange, and we report if it does not. We are not required to form an opinion on the
effectiveness of the Company’s or Group’s corporate governance procedures or its internal controls.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting
policies are appropriate to the circumstances of the Company and of the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group at 30 January 1999
and of its profit and cash flows for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
London
16 March 1999
90
Page 90
R8072 pp89-ibc
5/5/99 1:56 pm
Page 91
Kingfisher plc five-year history
Profit and loss
£ millions
Turnover
DIY
Electrical
General Merchandise
Property
Financial Services
Total turnover
Operating profit
DIY
Electrical
General Merchandise
Property
Other operating costs
Total operating profit
(Loss)/profit on disposal of fixed assets
(Loss)/profit on disposal and closure of operations/investments
Provision for loss on disposal and closure
Profit before interest
Interest
Profit before taxation
Taxation
Profit after taxation
Earnings per share (pence)
Basic
Fully diluted
Basic*
Fully diluted*
Dividend per share (pence)
1995
1996
1997
1998
1999
1,219.3
1,550.7
2,081.3
36.4
–
4,887.7
1,283.6
1,742.5
2,204.0
38.9
11.7
5,280.7
1,464.0
1,875.2
2,377.3
65.8
32.5
5,814.8
1,753.7
1,937.9
2,618.0
51.2
48.6
6,409.4
2,055.4
2,458.1
2,840.9
41.1
62.3
7,457.8
83.0
102.1
94.2
48.6
–
(23.4)
304.5
0.7
–
(38.0)
267.2
(23.4)
243.8
(70.2)
173.6
55.4
116.5
109.1
53.6
–
(17.9)
316.7
20.0
(5.2)
9.7
341.2
(30.0)
311.2
(80.9)
230.3
97.2
133.3
143.1
58.6
–
(17.2)
415.0
(1.5)
–
–
413.5
(25.4)
388.1
(110.3)
277.8
161.6
146.8
171.3
61.1
–
(22.5)
518.3
5.7
9.3
–
533.3
(13.3)
520.0
(133.1)
386.9
191.1
173.4
186.1
69.1
44.7
(27.3)
637.1
2.1
–
–
639.2
(9.9)
629.3
(183.5)
445.8
13.0
12.9
15.8
15.7
7.6
17.3
17.3
15.8
15.8
8.1
20.8
20.7
20.9
20.8
9.5
28.7
28.4
27.6
27.3
11.5
32.3
31.7
29.9
29.3
13.0
1995
1996
1997
1998
*Before fixed asset disposals, write downs and provision for disposal and closure.
Balance sheets
£ millions
Intangible assets
Property
Other tangible assets
Investments
Total fixed assets
Net current assets
Non-current assets/(liabilities)
Capital employed
Equity shareholders’ funds
Equity minority interests
Net debt
Capital employed
–
930.5
506.1
78.4
1,515.0
238.1
(79.0)
1,674.1
1,219.2
(2.8)
457.7
1,674.1
–
981.0
524.1
74.3
1,579.4
241.2
(6.4)
1,814.2
1,288.5
(2.5)
528.2
1,814.2
–
1,079.4
582.0
67.6
1,729.0
23.0
77.7
1,829.7
1,432.5
(2.0)
399.2
1,829.7
–
1,209.8
607.1
51.2
1,868.1
46.0
59.5
1,973.6
1,770.6
(0.5)
203.5
1,973.6
1999
267.3
2,064.0
821.4
66.4
3,219.1
59.5
31.1
3,309.7
2,250.6
365.7
693.4
3,309.7
Share data
millions
Number of shares in issue – period end
– average
Fully diluted number of shares
Share price
High
Low
Average
1995
1996
1997
1998
1999
1,334.8
1,326.8
1,329.6
1,339.4
1,330.7
1,331.1
1,344.4
1,335.6
1,342.7
1,352.5
1,343.6
1,358.2
1,359.9
1,351.2
1,376.7
329p
195p
260p
277p
203p
238p
341p
254p
307p
480p
327p
379p
694p
425p
537p
Earnings per share, dividends per share, numbers of shares and share prices have been restated to reflect the share split which was
effected on 2 July 1998.
Page 91
91
R8072 pp89-ibc
5/5/99 1:56 pm
Page 92
Shareholder information
Analysis of shareholders
Classification of shareholders
Number of
holders
Private holders
17,825
Banks and nominee companies
9,885
Percentage
of total
holders
Number of
shares
Percentage
of ordinary
share capital
61.63%
57,521,336
4.23%
34.18% 1,197,566,984
88.06%
Pension funds
24
0.08%
19,635,490
1.44%
Investment and unit trusts
94
0.33%
1,384,029
0.10%
Insurance companies
100
0.35%
36,589,130
2.70%
Corporate holders
993
3.43%
47,187,840
3.47%
100.0% 1,359,884,809
100.0%
28,921
Shareholding range
1 – 500
7,443
25.74%
1,922,076
0.14%
501 – 1,000
7,972
27.56%
5,738,049
0.42%
1,001 – 5,000
10,420
36.03%
21,807,197
1.60%
5,001 – 50,000
2,021
6.99%
27,960,766
2.06%
50,001 – 100,000
267
0.92%
19,295,738
1.42%
100,001 – 500,000
461
1.59%
107,675,350
7.92%
500,001 and over
337
1.17% 1,175,420,579
86.44%
28,921
100.0% 1,359,819,755
100.0%
Results and financial diary
For the year to 29 January 2000
First-quarter trading update
26 May 1999
Half-year results to July 1999 announced
14 September 1999*
Interim ordinary dividend paid
20 November 1999*
Third-quarter trading update
8 December 1999*
Christmas trading update
11 January 2000*
*Provisional
Annual general meeting
To be held at 11.00 am on Wednesday 26 May 1999 at The Dorchester, Park Lane, London. Each shareholder is entitled to attend and
vote at the meeting, the arrangements for which are set out on pages 94 and 95.
Dividend payments
The proposed final dividend (if approved) will be paid on 1 July 1999 to shareholders on the register on 12 April 1999. Shareholders will
have the opportunity to receive their dividend in shares instead of cash. Details of the scrip dividend alternative will be sent separately
to shareholders.
Shareholders are able to elect to receive their cash dividend in French Francs. For further details please contact the Company’s
Registrar (address overleaf).
92
Page 92
R8072 pp89-ibc
5/5/99 1:56 pm
Page 93
Payment of dividends by BACS
Many shareholders have already arranged for dividends to be paid by mandate directly to their bank or building society account.
The Company mandates dividends through the BACS (Bankers’ Automated Clearing Services) system. The benefit to shareholders
of the BACS payment method is that the Registrar posts the tax vouchers directly to them, whilst the dividend is credited on the
payment date to the shareholder’s bank or building society account. Shareholders who have not yet arranged for their dividends to
be paid direct to their bank or building society account and wish to benefit from this service should request the Company’s Registrar
(address below) to send them a Dividend/Interest mandate form or alternatively complete the mandate form attached to their
dividend tax voucher in July.
NatWest Stockbrokers
A low cost postal share dealing service for the purchase and sale of Kingfisher plc shares is provided by NatWest Stockbrokers at
a commission of 1% on the first £3,000 and 0.5% on the balance (minimum £9.50). Further information and dealing forms can be
obtained by writing to NatWest Stockbrokers, Corporate & Employee Services, 55 Mansell Street, London E1 8AN.
Individual Savings Accounts (ISAs)
The Company is currently in negotiations with a number of ISA providers, to obtain the best package for shareholders. Details of the
ISA provider chosen is expected to be included with the Company’s interim results in September.
Registrar and Transfer Office
All administrative enquiries relating to shareholdings should, in the first instance, be directed to the Company’s Registrar and clearly
state the registered shareholder’s name and address. Please write to Kingfisher Registrar, Computershare Services PLC, Securities
Services – Registrars, PO Box 435, Owen House, 8 Bankhead Crossway North, Edinburgh EH11 4BR. Telephone (0131) 523 6666.
Shareholder information on the Internet
Computershare Services PLC, the Company Registrar, has introduced a facility where shareholders are able to access details of their
shareholding in the Company over the Internet, subject to complying with an identity check. This service can be accessed on their
website (www.cshare.co.uk).
Company Secretary and Registered Office
Helen Jones, Kingfisher plc, North West House, 119 Marylebone Road, London NW1 5PX. Telephone (0171) 725 5806.
Kingfisher plc is registered in England and Wales (Number 1664812).
Page 93
93
R8072 pp89-ibc
5/5/99 1:56 pm
Page 94
Notice of annual general meeting
Notice is hereby given that the annual general meeting of Kingfisher plc will be held at The Dorchester, Park Lane, London W1
(Ballroom entrance), on Wednesday, 26 May 1999 at 11.00 am for the following purposes:
1 To receive and adopt the financial statements for the year ended 30 January 1999, together with the reports of the directors and
auditors thereon.
2 To declare a final dividend of 9.25p on the ordinary shares.
3 To reappoint the following directors who have been appointed directors since the date of the previous annual general meeting:
(a) Philip Rowley
(b) Jean-Hugues Loyez
To reappoint the following directors who retire by rotation:
(c) Anthony Percival
(d) Sir John Banham
(e) Sir Geoffrey Mulcahy
(f ) John Bullock
4 To reappoint PricewaterhouseCoopers as the Company’s auditors and to authorise the directors of the Company to fix their remuneration.
5 To reappoint Bernard Thiolon, who attained the age of 70 on 24 February 1999, for a period of one year, special notice having been
given to the Company pursuant to Section 293 of the Companies Act 1985.
6 To consider and, if thought fit, pass as an ordinary resolution:
that the directors of the Company be and they are hereby generally authorised and empowered during the period expiring at the
conclusion of the next annual general meeting of the Company or on 27 August 2000, whichever is the earlier, to exercise all powers
of the Company to allot relevant securities as defined in Section 80 of the Companies Act 1985 (“the Act”) and to make an offer or
agreement which would or might require relevant securities to be allotted after that date, so long as the nominal value of the relevant
securities allotted under this authority shall not exceed the nominal value of the authorised but unissued share capital of the Company
at the date hereof.
7 To consider and, if thought fit, pass as an ordinary resolution:
that the directors of the Company be and they are hereby authorised to exercise the power contained in Article 133A or the Articles
of Association of the Company to resolve that the holders at any time of any shares in the capital of the Company shall be entitled
to elect to receive new shares in the capital of the Company (credited as fully paid), instead of cash, in respect of all or part of any
dividends declared or paid during the period prior to the annual general meeting of the Company to be held in 2004, on the terms
and conditions contained in the said Article 133A.
8 To consider and, if thought fit, pass as a special resolution:
that the directors of the Company be and they are hereby generally authorised and empowered during the period expiring at the
conclusion of the next annual general meeting of the Company or on 27 August 2000, whichever is the earlier, to exercise all powers of
the Company to allot equity securities as defined in Section 94(2) of the Act as if Section 89(1) of the Act did not apply in the case of:
(a) allotments in connection with a rights issue to shareholders where the directors shall have the right to make such exclusions or
other arrangements as they may deem necessary or expedient to deal with fractional entitlements that would otherwise arise
or with legal or practical problems under the laws of or requirements of any recognised regulatory body or any stock exchange
in any territory, or otherwise howsoever;
(b) other allotments of equity securities for cash where this authority shall be limited in aggregate to the allotment of or involving
equity share capital not exceeding (in nominal value) 5% of the nominal value of the issued share capital of the Company as at
the date hereof.
94
Page 94
R8072 pp89-ibc
6/5/99 11:56 am
Page 95
9 To consider and, if thought fit, pass as a special resolution:
(a) that the Company be and is hereby authorised pursuant to Article 43 of the Company’s Articles of Association and Section 166
of the Companies Act 1985 (“the Act”) to make market purchases (within the meaning of Section 163(3) of the Act) of its own
ordinary shares of 12.5p each on such terms and in such manner as the directors of the Company shall determine, provided that:
(b) the maximum number of ordinary shares hereby authorised to be authorised to be acquired shall be 136,009,601 ordinary shares
of 12.5p each;
(c) the maximum price which may be paid for each ordinary share shall be an amount equal to 105% of the average of the
middle market quotations for the ordinary shares of the Company (derived from The Stock Exchange Daily Official List) for
the 10 business days prior to the date of purchase, exclusive of advance corporation tax (if any) payable by the Company, and
(d) the authority hereby given shall expire at the conclusion of the next annual general meeting of the Company or on 26 November
2000 (whichever is earlier) save that the Company may make a purchase of ordinary shares under such authority after such date if
the contract of purchase for the same was entered into before such date.
By order of the Board
Helen Jones Secretary
20 April 1999
Registered Office
North West House
119 Marylebone Road
London
NW1 5PX
Notes
1 A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and on a poll, vote instead
of him/her. A proxy need not be a member.
2 Only those shareholders registered in the register of members of the Company as at 6.00 pm on 24 May 1999 shall be entitled to
attend or vote at the meeting in respect of the number of shares registered in their names at that time (regulation 34 of the
Uncertificated Securities Regulations 1995).
3 To be effective the instrument appointing a proxy must be deposited at the office of the registrar not later than 11.00 am on
24 May 1999.
4 There will be available for inspection at the registered office of the Company during normal business hours on any weekday (public
holidays excepted) from the date of this notice until the date of the annual general meeting and at The Dorchester for 15 minutes prior
to and during the meeting:
(a) the register of directors’ interests in the ordinary shares of the Company, and
(b) the service contracts of the directors.
5 Appointment of a proxy will not prevent a member from attending and voting at the annual general meeting should he/she decide to
do so.
Page 95
95
R8072 pp89-ibc
5/5/99 1:56 pm
Page 96
Index
Accountability and audit
44, 89-90
Accounting policies and standards 35, 58-61
41, 83-8
Activities, review of
6-11
Aims and goals
1, 6, 10
AGM, notice of
51-2, 94-5
70
Audit Committee
43
Auditors’ report
90
B&Q
2, 13-17, 70
Castorama merger 5, 13, 15, 17, 34, 41, 83-4
Taiwan
17
Warehouses
13-17
BACS, payment of dividends by
93
Balance sheets
55, 91
BCC
22-3, 70
Belgium, retail stores see New Vanden Borre
BigW
29
Board committees
39, 43
Borrowings
32-3, 73-4
Brico-Depôt
15, 17
BUT S.A.
2, 20, 22, 59
Acquisition
35, 41, 84-5
Capital expenditure and commitments 7, 32, 79
Capital Investment Committee
32
Cash flow
32, 56, 77-8
Castorama
5, 13, 15, 17, 34, 41, 70, 83-4
Chairman’s statement
4-5
Charitable donations
36-7, 53
See also social responsibility
Chartwell Land
7, 31
Chief Executive’s review
6-11
Code of Conduct
44
Compliance with the Combined Code
44
Comet
2, 22-3
Consolidation, basis for
58
Corporate governance
42-51
Creditors
72
Darty
2, 20, 22-3, 70
Debtors
71
Depreciation
59
Development work in progress and stocks 71
Directors
38-9, 42-3
Interests
42, 49-51
Pensions
47
Re-election of
43, 52, 94
Remuneration
43, 48-9, 65
Report
41-53
Responsibilities, statement of
89
Service contracts
47-8
Dividends
4, 32, 41, 66, 92
Payment by BACS
93
Scrip dividend
52, 92, 94
DIY sector
2, 7, 12-17
Outlets
2, 10, 13, 17
See also B&Q; NOMI, Castorama
Dubois Matériaux
17
Earnings per share
4, 32, 61, 66
Electric City
20, 22-3, 35, 41, 70, 87
Electrical sector
2, 7, 18-23
Outlets
2, 10, 19-20
See also BCC; BUT; Comet; Darty;
Electric City; New Vanden Borre;
Wegert
96
Employees
2-3, 10, 52-3, 65
Entertainment UK (EUK)
29, 70
Environment
37, 53
Equal opportunities
53
ESOP (Share Ownership
Plan Trust)
61, 66, 80-2
Euro
35, 61
Eurosterling bond
33
Exceptional items
34, 62
Executive Share Option Scheme 49-51, 80-82
F-Beat Records Ltd
41, 87
Finance Committee
43
Financial
Assets and liabilities
74
Derivative instruments
34, 61
Hedges
33, 74
Highlights
4
Review
32-5
Statements
54-88
Financial Diary and Results
92
Five year history
91
Fixed assets
67-70
Foreign currencies
58
Policies
33
Rates of exchange
58
Risk
33, 73
France, retail stores see BUT;
Castorama; Darty
Gains and losses, statement of
57
General merchandise sector
2, 7, 24-30
New outlets
10
See also Entertainment UK; Health;
Superdrug; Woolworths,
Germany, retail stores see Castorama;
ProMarkt
Going concern
35
Goodwill
35, 58-9, 61, 88
Group historical cost profits
57
Halcyon Finance
33, 70
Holland, retail stores see BCC
Individual Savings Accounts (ISAs)
93
Interest payable
33, 64, 73
Internal control
44
International Share Save Scheme
52
Internet information
43, 93
Investments
69-71, 78
Joint ventures
69-70, 88
Land and buildings
60, 68, 75
Liquidity and funding
32-3
Long-term incentive scheme
46-7
Macro Markt
20
Management Development Scheme (KMDS) 10
Market capitalisation
7
Mergers and acquisitions
34-5, 83-8
MVC (Music and Video Club)
30, 70
New Vanden Borre
22-3, 70
NOMI
15, 17, 34-5, 41, 70, 87
Nomination Committee
43
Non-executive directors
38-9, 48-9
Notes to the accounts
58-88
Pensions
47, 60, 79
Phantom Share Option Scheme
80-2
Poland, retail stores see Castorama; NOMI
Political contributions
53
Page 96
Principal activities
41
Profit
2, 4, 32, 41, 54, 57
Profit and loss account
54, 62-4, 91
ProMarkt
20, 35, 42
Property
Chartwell Land
31
Developments
60
Financial results
63
Values
68
Provisions
61, 75
Rebates receivable from suppliers
60
Registrar and Transfer Office
93
Related party transactions
88
Remuneration Committee
43, 45
Remuneration policy
45-8
Réno-Depôt
17
Reserves
76
Resolutions (AGM)
94-5
Retail sectors
2
Financial results
63
Review of operations
DIY
13-17
Electrical
18-23
General merchandise
24-30
Property
31
Risk management
32-4, 44
Scrip dividend
52, 94
Securitisation programme
33, 71
Segmental analysis
62-3
Shareholders
Information
92-3
Major
53
Movement in equity funds
77
Relations with
43
Return and dividends
32, 41
Shares
Authority to issue/purchase
52, 94
Capital
76
Data and prices
91
Options
46, 49-51, 80-2
ShareSave
5, 50, 52, 80-1
Social responsibility
36-7, 43
Sponsorship
10, 36-7
Staff numbers and costs
2, 3, 65
Stocks
60, 71
Stores
By country
3
Numbers
2, 3, 6, 10, 13, 19, 25
Subsidiaries
70
Superdrug
2, 25-6, 29-30, 70
Supplier payment policy
53
Taxation
34, 61, 65
Time Retail Finance (TRF)
32-3, 70-1
Treasury policy and risk management
32-4
Turnover
2, 4, 62-3
VAT accrual
32, 34, 62
VCI plc, acquisition of 29-30, 35, 41, 70, 86-7
Vendée Globe 2000
10-11
Wegert
2, 20, 22-3
Acquisition
35, 41, 70, 85-6
Weighted average cost of capital (WACC) 32
Woolworths
2, 25-7, 29, 70
Year 2000
35, 61
R8072 pp89-ibc
5/5/99 6:23 pm
Page ibc1
The papers in this report are made from
elemental chlorine free pulp which is sourced
from sustainable managed forests.
Designed by Tor Pettersen & Partners.
Printed in England by Litho-Tech.
Page ibc1
R8072 Covers
5/5/99 10:20 am
Page 1
Kingfisher plc
North West House
119 Marylebone Road
London NW1 5PX
+44 (0)171 724 7749
www.kingfisher.co.uk
Kingfisher plc Annual Report and Accounts 1999
Back Cover
R8072 Tor Pettersen Kingfisher R&A 9th Proof
Location: GP5/Wk11/Tor Pettersen Size: A4 Font s

Kingfisher plc Annual Report 1999

Transcription

Similar documents

Kingfisher Investor Event Presentation 2003 (Castorama)

general guidance on the preparation of terms of reference for

Musselwhite Mine Environmental Working Committee

2015 Agriculture Federal Credit Union (AgFed) Board of Directors

Global sourcing - Made In Asia, the sourcing symposium

Folder 16 Private Messages Sent Mayer, Andre

Anonymity and Censorship Resistance

slides - Information Security Research Group

January 2014 Newsletter - Fresno Police Department Credit Union