TIDMKGF

RNS Number : 9273Z

Kingfisher PLC

20 September 2022

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED INCOME STATEMENT

 
 
                                            Half year ended 31 July 2022                Half year ended 31 July 2021 
                              ------------------------------------------  ------------------------------------------ 
                                       Before                                      Before 
                                    adjusting        Adjusting                  adjusting        Adjusting 
 GBP millions          Notes            items   items (note 5)     Total            items   items (note 5)     Total 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 Sales                   4              6,809                -     6,809            7,101                -     7,101 
 Cost of sales                        (4,313)                -   (4,313)          (4,404)                -   (4,404) 
                                               ---------------  --------                   ---------------  -------- 
 Gross profit                           2,496                -     2,496            2,697                -     2,697 
 Selling and 
  distribution 
  expenses                            (1,549)                1   (1,548)          (1,554)                -   (1,554) 
 Administrative 
  expenses                              (434)                -     (434)            (417)                7     (410) 
 Other income                              11                1        12               12                1        13 
 Share of post-tax 
  results of joint 
  ventures and 
  associates                                5                -         5                1                -         1 
 Operating profit        4                529                2       531              739                8       747 
 Finance costs                           (65)                -      (65)             (76)                -      (76) 
 Finance income                             8                -         8                6                -         6 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 Net finance costs       6               (57)                -      (57)             (70)                -      (70) 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 Profit before 
  taxation                                472                2       474              669                8       677 
 Income tax expense      7              (104)                3     (101)            (144)               23     (121) 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 Profit for the 
  period                                  368                5       373              525               31       556 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 
 
 
 Earnings per share      8 
 Basic                                                             18.6p                                       26.4p 
 Diluted                                                           18.3p                                       26.2p 
 Adjusted basic                                                    18.3p                                       24.9p 
 Adjusted diluted                                                  18.0p                                       24.7p 
--------------------  ------  ---------------  ---------------  --------  ---------------  ---------------  -------- 
 
 
 

The proposed interim ordinary dividend for the period ended 31 July 2022 is 3.80p per share (2021/22: 3.80p per share).

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED INCOME STATEMENT

 
                                                                             Year ended 31 January 2022 
                                                                --------------------------------------- 
                                                                                    Adjusting 
                                                                 Before adjusting       items 
 GBP millions                                           Notes               items    (note 5)     Total 
----------------------------------------------------  --------  -----------------  ----------  -------- 
 Sales                                                    4                13,183           -    13,183 
 Cost of sales                                                            (8,248)           -   (8,248) 
 Gross profit                                                               4,935           -     4,935 
 Selling and distribution expenses                                        (3,041)          42   (2,999) 
 Administrative expenses                                                    (836)          13     (823) 
 Other income                                                                  23           3        26 
 Share of post-tax results of joint ventures and associates                     5           -         5 
 Operating profit                                         4                 1,086          58     1,144 
 Finance costs                                                              (148)           -     (148) 
 Finance income                                                                11           -        11 
----------------------------------------------------  --------  -----------------  ----------  -------- 
 Net finance costs                                        6                 (137)           -     (137) 
----------------------------------------------------  --------  -----------------  ----------  -------- 
 Profit before taxation                                                       949          58     1,007 
 Income tax expense                                       7                 (212)          48     (164) 
----------------------------------------------------  --------  -----------------  ----------  -------- 
 Profit for the year                                                          737         106       843 
----------------------------------------------------  --------  -----------------  ----------  -------- 
 
 Earnings per share                                       8 
 Basic                                                                                            40.3p 
 Diluted                                                                                          39.8p 
 Adjusted basic                                                                                   35.2p 
 Adjusted diluted                                                                                 34.8p 
 
 

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 
 
                                                        Half year ended   Half year ended                   Year ended 
 GBP millions                                   Notes      31 July 2022      31 July 2021              31 January 2022 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 Profit for the period                                              373               556                          843 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 Remeasurements of post-employment benefits     11                 (14)              (12)                           21 
 Inventory cash flow hedges - fair value 
  gains                                                             113                 6                           59 
 Tax on items that will not be reclassified                        (24)                 1                         (18) 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 Total items that will not be reclassified 
  subsequently to profit or loss                                     75               (5)                           62 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 Currency translation differences 
   Group                                                           (22)             (148)                        (218) 
   Joint ventures and associates                                    (1)               (2)                          (7) 
 Other cash flow hedges 
   Fair value gains                                                   -                 4                            1 
   Gains transferred to income statement                              -               (4)                          (1) 
 Total items that may be reclassified 
  subsequently to profit or loss                                   (23)             (150)                        (225) 
                                             --------  ----------------  ---------------- 
 Other comprehensive income/(expense) for 
  the period                                                         52             (155)                        (163) 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 Total comprehensive income for the period                          425               401                          680 
-------------------------------------------  --------  ----------------  ----------------  --------------------------- 
 

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                                                                         Half year ended 31 July 
                                                                                                            2022 
                           -----------  ----------  --------  -----------  ------------------------------------- 
                                                                                              Other 
                                                         Own                    Capital    reserves 
                                 Share       Share    shares     Retained    redemption       (note        Total 
   GBP millions                capital     premium      held     earnings       reserve         14)       equity 
-------------------------  -----------  ----------  --------  -----------  ------------  ----------  ----------- 
 At 1 February 2022                325       2,228      (46)        4,025            50         196        6,778 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 Profit for the period               -           -         -          373             -           -          373 
 Other comprehensive 
  (expense)/income 
  for the period                     -           -         -         (10)             -          62           52 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 Total comprehensive 
  income 
  for the period                     -           -         -          363             -          62          425 
 Inventory cash flow 
  hedges 
  - gains transferred to 
  inventories                        -           -         -            -             -        (61)         (61) 
 Share-based compensation            -           -         -           11             -           -           11 
 New shares issued under 
  share 
  schemes                            -           -         -            2             -           -            2 
 Own shares issued under 
  share 
  schemes                            -           -        17         (17)             -           -            - 
 Purchase of own shares 
  for 
  cancellation                    (13)           -         -        (225)            13           -        (225) 
 Dividends                           -           -         -        (172)             -           -        (172) 
 Tax on equity items                 -           -         -          (1)             -          14           13 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 At 31 July 2022                   312       2,228      (29)        3,986            63         211        6,771 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 
                                                                                    Half year ended 31 July 2021 
                          -----------  ------------------------------------------------------------------------- 
                                                                                              Other 
                                                         Own                    Capital    reserves 
                                Share        Share    shares     Retained    redemption       (note        Total 
   GBP millions               capital      premium      held     earnings       reserve         14)       equity 
------------------------  -----------  -----------  --------  -----------  ------------  ----------  ----------- 
 At 1 February 2021                332       2,228      (23)        3,630            43         361        6,571 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 Profit for the period               -           -         -          556             -           -          556 
 Other comprehensive 
  expense 
  for the period                     -           -         -          (9)             -       (146)        (155) 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 Total comprehensive 
  income/(expense) 
  for the period                     -           -         -          547             -       (146)          401 
 Inventory cash flow 
  hedges 
  - losses transferred to 
  inventories                        -           -         -            -             -          34           34 
 Share-based compensation            -           -         -           14             -           -           14 
 New shares issued under 
  share 
  schemes                            -           -         -            2             -           -            2 
 Own shares issued under 
  share 
  schemes                            -           -        11         (11)             -           -            - 
 Purchase of own shares 
  for 
  ESOP trust                         -           -      (29)            -             -           -         (29) 
 Dividends                           -           -         -        (174)             -           -        (174) 
 Tax on equity items                 -           -         -            -             -         (8)          (8) 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 At 31 July 2021                   332       2,228      (41)        4,008            43         241        6,811 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 
                                                                                      Year ended 31 January 2022 
                            ----------  ------------------------------------------------------------------------ 
                                                                                              Other 
                                                         Own                    Capital    reserves 
                                 Share       Share    shares     Retained    redemption       (note        Total 
   GBP millions                capital     premium      held     earnings       reserve         14)       equity 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 At 1 February 2021                332       2,228      (23)        3,630            43         361        6,571 
 Profit for the year                 -           -         -          843             -           -          843 
 Other comprehensive 
  income/(expense) 
  for the year                       -           -         -           16             -       (179)        (163) 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 Total comprehensive 
  income/(expense) 
  for the year                       -           -         -          859             -       (179)          680 
 Inventory cash flow 
  hedges 
  - losses transferred to 
  inventories                        -           -         -            -             -          16           16 
 Share-based compensation            -           -         -           27             -           -           27 
 New shares issued under 
  share 
  schemes                            -           -         -            5             -           -            5 
 Own shares issued under 
  share 
  schemes                            -           -        15         (15)             -           -            - 
 Purchase of own shares 
  for 
  cancellation                     (7)           -         -        (226)             7           -        (226) 
 Purchase of own shares 
  for 
  ESOP trust                         -           -      (38)            -             -           -         (38) 
 Dividends                           -           -         -        (254)             -           -        (254) 
 Tax on equity items                 -           -         -          (1)             -         (2)          (3) 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 At 31 January 2022                325       2,228      (46)        4,025            50         196        6,778 
--------------------------  ----------  ----------  --------  -----------  ------------  ----------  ----------- 
 
 

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED BALANCE SHEET

 
 GBP millions                                    Notes   At 31 July 2022     At 31 July 2021     At 31 January 2022 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 Non-current assets 
 Goodwill                                                          2,424               2,425                  2,424 
 Other intangible assets                            10               353                 320                    330 
 Property, plant and equipment                      10             3,086               2,982                  3,078 
 Investment property                                10                33                  20                     33 
 Right-of-use assets                                               1,842               1,785                  1,885 
 Investments in joint ventures and associates                         20                  18                     17 
 Post-employment benefits                           11               542                 506                    540 
 Deferred tax assets                                                   9                  19                     10 
 Other tax authority asset                          17                64                  64                     64 
 Derivative assets                                  12                 2                   -                      1 
 Other receivables                                                    17                  26                     22 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
                                                                   8,392               8,165                  8,404 
 Current assets 
 Inventories                                                       3,138               2,730                  2,749 
 Trade and other receivables                                         364                 317                    300 
 Derivative assets                                  12                82                  11                     37 
 Current tax assets                                                   37                  23                     33 
 Cash and cash equivalents                                           496               1,535                    823 
 Assets held for sale                                                  5                   6                      6 
                                                                   4,122               4,622                  3,948 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 Total assets                                                     12,514              12,787                 12,352 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 
 Current liabilities 
 Trade and other payables                                        (2,891)             (2,947)                (2,674) 
 Borrowings                                         12              (17)               (111)                   (14) 
 Lease liabilities                                                 (334)               (333)                  (347) 
 Derivative liabilities                             12              (13)                (27)                   (12) 
 Current tax liabilities                                            (19)               (126)                   (46) 
 Provisions                                                         (16)                (35)                   (23) 
                                                                 (3,290)             (3,579)                (3,116) 
 Non-current liabilities 
 Other payables                                                     (10)                (11)                   (10) 
 Borrowings                                         12               (1)                 (2)                    (2) 
 Lease liabilities                                               (1,984)             (1,986)                (2,029) 
 Derivative liabilities                             12                 -                   -                    (1) 
 Deferred tax liabilities                                          (310)               (231)                  (276) 
 Provisions                                                         (12)                (22)                   (10) 
 Post-employment benefits                           11             (136)               (145)                  (130) 
                                                                 (2,453)             (2,397)                (2,458) 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 Total liabilities                                               (5,743)             (5,976)                (5,574) 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 Net assets                                                        6,771               6,811                  6,778 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 
 Equity 
 Share capital                                      13               312                 332                    325 
 Share premium                                                     2,228               2,228                  2,228 
 Own shares held in ESOP trust                                      (29)                (41)                   (46) 
 Retained earnings                                                 3,986               4,008                  4,025 
 Capital redemption reserve                                           63                  43                     50 
 Other reserves                                     14               211                 241                    196 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 Total equity                                                      6,771               6,811                  6,778 
----------------------------------------------  ------  ----------------  ------------------  --------------------- 
 
 

The interim financial report was approved by the Board of Directors on 19 September 2022 and signed on its behalf by:

 
 Thierry Garnier, Chief Executive   Bernard Bot , Chief Financial 
              Officer                          Officer 
 

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED CASH FLOW STATEMENT

 
                                                                  Half year ended   Half year ended         Year ended 
 GBP millions                                             Notes      31 July 2022      31 July 2021    31 January 2022 
-------------------------------------------------------  ------  ----------------  ----------------  ----------------- 
 Operating activities 
 Cash generated by operations                              15                 584             1,161              1,411 
 Income tax paid                                                             (75)              (78)              (169) 
 French tax authority payment                               7                (34)                 -                  - 
 Other tax authority payments                              17                   -              (64)               (64) 
                                                                 ----------------  ----------------  ----------------- 
 Net cash flows from operating activities                                     475             1,019              1,178 
 
 Investing activities 
 Purchase of property, plant and equipment and 
  intangible assets                                                         (184)             (131)              (397) 
 Disposal of property, plant and equipment, investment 
  property, assets held for sale and intangible 
  assets                                                                        1                 7                  9 
 Disposal of businesses, net of cash disposed                                   -                 -                  7 
 Interest received                                                              1                 1                  2 
 Interest element of lease rental receipts                                      1                 1                  1 
 Principal element of lease rental receipts                                     2                 2                  3 
 Advance payments on right-of-use assets                                      (2)               (1)               (11) 
 Advance receipts on right-of-use assets                                        2                 -                  - 
 Dividends received from joint ventures and associates                          1                 1                  1 
-------------------------------------------------------  ------  ----------------  ----------------  ----------------- 
 Net cash flows used in investing activities                                (178)             (120)              (385) 
 
 Financing activities 
 Interest paid                                                                (3)               (5)               (22) 
 Interest element of lease rental payments                                   (62)              (69)              (135) 
 Principal element of lease rental payments                                 (164)             (177)              (341) 
 Repayment of bank loans                                                        -               (3)                (2) 
 Repayment of fixed term debt                                                   -                 -               (95) 
 New shares issued under share schemes                                          2                 2                  5 
 Purchase of own shares for cancellation                                    (218)                 -              (157) 
 Purchase of own shares for ESOP trust                                        (9)              (29)               (29) 
 Ordinary dividends paid to equity shareholders of the 
  Company                                                   9               (172)             (174)              (254) 
-------------------------------------------------------  ------  ----------------  ----------------  ----------------- 
 Net cash flows used in financing activities                                (626)             (455)            (1,030) 
 
 Net (decrease)/increase in cash and cash equivalents 
  and bank overdrafts                                                       (329)               444              (237) 
 Cash and cash equivalents and bank overdrafts at 
  beginning of period                                                         809             1,136              1,136 
 Exchange differences                                                         (1)              (64)               (90) 
-------------------------------------------------------  ------  ----------------  ----------------  ----------------- 
 Cash and cash equivalents and bank overdrafts at end 
  of period                                                                   479             1,516                809 
-------------------------------------------------------  ------  ----------------  ----------------  ----------------- 
 

Kingfisher plc

2022/23 INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   1.         General information 

Kingfisher plc ('the Company'), its subsidiaries, joint ventures and associates (together 'the Group') supply home improvement products and services through a network of retail stores and other channels, located mainly in the United Kingdom and continental Europe.

The Company is incorporated in England and Wales, United Kingdom, and is listed on the London Stock Exchange. The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.

The interim financial report does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Audited statutory accounts for the year ended 31 January 2022 were approved by the Board of Directors on 21 March 2022 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006. The interim financial report has been reviewed, not audited, and was approved by the Board of Directors on 19 September 2022.

   2.         Basis of preparation 

The interim financial report for the six months ended 31 July 2022 ('the half year') has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting', as adopted by the United Kingdom. It should be read in conjunction with the annual financial statements for the year ended 31 January 2022, which have been prepared in accordance with United Kingdom adopted international accounting standards and International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with International Financial Reporting Standards as issued by the IASB. The consolidated income statement and related notes represent results for continuing operations, there being no discontinued operations in the periods presented. Where comparatives are given, '2021/22' refers to the six months ended 31 July 2021.

Going concern

Based on the Group's liquidity position and cash flow projections, including a forward looking remote downside scenario, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and they continue to adopt the going concern basis of accounting in preparing the condensed consolidated financial statements for the period ended 31 July 2022.

Considering whether the Group's condensed consolidated financial statements can be prepared on a going concern basis, the Directors have reviewed the Group's business activities together with factors likely to affect its performance, financial position and access to liquidity (including consideration of financial covenants and credit ratings).

In forming their outlook on the future financial performance, the Directors considered the post-COVID normalisation of store traffic and average spend, the risk of higher business volatility and the potential negative impact of the general economic environment on household and trade spend.

The Directors' review also included a remote scenario that considers the impact of a significant drop in sales over a period of six months followed by a period of recovery lasting two months before trading resumes to the base case expected forecast. The total loss of sales in this scenario is c.GBP1.9bn (22% over the impacted period). The scenario assumes the impact of lost sales is partially offset by a limited set of mitigating actions on variable and discretionary costs, capital expenditure and the suspension of capital returns to shareholders. Even under this remote scenario, which requires drawing on the revolving credit facility (RCF) for a few months, the group retains headroom on its credit facilities. Given current trading and expectations for the business, the Directors believe that this scenario reflects a remote outcome for the Group. Should a more extreme scenario occur than currently forecast by the Directors under this remote scenario, the Group would need to implement additional operational or financial measures.

New and amended accounting standards

New standards, amendments and interpretations are in issue and effective for the Group's financial year ended 31 January

2023, but they do not have a material impact on the interim financial report.

Principal rates of exchange against Sterling

 
                   Half year ended 31     Half year ended 31     Year ended 31 January 
                            July 2022              July 2021                      2022 
                ---------------------  ---------------------  ------------------------ 
                 Average   Period end   Average   Period end      Average     Year end 
                    rate         rate      rate         rate         rate         rate 
--------------  --------  -----------  --------  -----------  -----------  ----------- 
 Euro               1.18         1.19      1.16         1.17         1.17         1.20 
 US Dollar          1.27         1.22      1.39         1.39         1.38         1.34 
 Polish Zloty       5.53         5.64      5.27         5.35         5.34         5.49 
 Romanian Leu       5.85         5.87      5.70         5.76         5.76         5.92 
--------------  --------  -----------  --------  -----------  -----------  ----------- 
 

Risks and uncertainties

The principal risks and uncertainties to which the Group is exposed are set out on pages 42-48 of the Kingfisher plc Annual Report and Accounts for the year ended 31 January 2022. These have been reviewed as part of the Group's half year procedures and are listed in the Financial Review.

Use of non-GAAP measures

In the reporting of financial information, the Group uses certain measures that are not required under IFRS, the generally accepted

accounting principles ('GAAP') under which the Group reports. The Group believes that retail profit, adjusted pre-tax profit, adjusted effective tax rate, and adjusted earnings per share provide additional useful information on performance and trends to shareholders. These and other non-GAAP measures (also known as 'Alternative Performance Measures'), such as net debt, are used by the Group for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'adjusting items', 'adjusted', 'adjusted effective tax rate', 'net cashflow' and 'net debt' are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures.

Retail profit is defined as continuing operating profit before central costs, the Group's share of interest and tax of joint ventures and associates and adjusting items. Central costs principally comprise the costs of the Group's head office before adjusting items.

Adjusting items, which are presented separately within their relevant income statement category, include items which by virtue of their size and/or nature, do not reflect the Group's ongoing trading performance. Adjusting items may include, but are not limited to:

-- non-trading items included in operating profit such as profits and losses on the disposal, closure, exit or impairment of subsidiaries, joint ventures, associates and investments which do not form part of the Group's ongoing trading activities;

   --      the costs of significant restructuring and incremental acquisition integration costs; 

-- profits and losses on the disposal/exit of properties, impairments of goodwill and significant impairments (or impairment reversals) of other non-current assets;

-- prior year tax items (including the impact of changes in tax rates on deferred tax), significant one-off tax settlements and provision charges/releases and the tax effects of other adjusting items;

-- financing fair value remeasurements i.e. changes in the fair value of financing derivatives, excluding interest accruals, offset by fair value adjustments to the carrying amount of borrowings and other hedged items under fair value (or non-designated) hedge relationships. Financing derivatives are those that relate to hedged items of a financing nature.

The term 'adjusted' refers to the relevant measure being reported for continuing operations excluding adjusting items.

The adjusted effective tax rate is calculated as continuing income tax expense excluding prior year tax items (including the impact of changes in tax rates on deferred tax), significant one-off tax settlements and provision charges/releases and the tax effects of other adjusting items, divided by continuing profit before taxation excluding adjusting items. Prior year tax items represent income statement tax relating to underlying items originally arising in prior years, including the impact of changes in tax rates on deferred tax. The exclusion of items relating to prior years, and those not in the ordinary course of business, helps provide a better indication of the Group's ongoing rate of tax.

Net debt comprises lease liabilities, borrowings and financing derivatives (excluding accrued interest) less cash and cash equivalents and short-term deposits, including such balances classified as held for sale.

Refer to the Financial Review for definitions of all of the Group's Alternative Performance Measures, including further information on why they are used and details of where reconciliations to statutory measures can be found where applicable.

   3.         Accounting policies 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 January 2022, as described in note 2 of those financial statements, except where set out below. The critical accounting estimates and judgements are set out in note 3 of the annual financial statements for the year ended 31 January 2022 and remain unchanged.

Taxes on income for interim periods are accrued using the best estimate of the effective tax rate that would be applicable to expected total annual earnings.

   4.         Segmental analysis 

Income statement

 
                                                                         Half year ended 31 July 2022 
                                   ------------------------------------------------------------------ 
 
                                                                                      Other 
 GBP millions                       UK & Ireland   France   Poland   Other    International     Total 
---------------------------------  -------------  -------  -------          ---------------  -------- 
 Sales                                     3,221    2,325      913     350            1,263     6,809 
---------------------------------  -------------  -------  -------  ------  ---------------  -------- 
 Retail profit                               339      129       94     (7)               87       555 
                                                           -------  ------ 
 Central costs                                                                                   (26) 
 Adjusting items                                                                                    2 
---------------------------------  -------------  -------  -------  ------  ---------------  -------- 
 Operating profit                                                                                 531 
 Net finance costs                                                                               (57) 
---------------------------------  -------------  -------  -------  ------  ---------------  -------- 
 Profit before taxation                                                                           474 
---------------------------------  -------------  -------  -------  ------  ---------------  -------- 
 
 
 
                                                                                    Half year ended 31 July 2021 
                                         ----------------------------------------------------------------------- 
 
 
 GBP millions                             UK & Ireland   France   Poland   Other   Other International     Total 
---------------------------------------  -------------  -------  -------          --------------------  -------- 
 Sales                                           3,570    2,437      743     351                 1,094     7,101 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Retail profit                                     579      129       58       1                    59       767 
                                                                 -------  ------ 
 Central costs                                                                                              (27) 
 Share of interest and tax of joint 
  ventures and associates                                                                                    (1) 
 Adjusting items                                                                                               8 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Operating profit                                                                                            747 
 Net finance costs                                                                                          (70) 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Profit before taxation                                                                                      677 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 
 
 
                                                                                      Year ended 31 January 2022 
                                         ----------------------------------------------------------------------- 
 
 
 GBP millions                             UK & Ireland   France   Poland   Other   Other International     Total 
---------------------------------------  -------------  -------  -------          --------------------  -------- 
 Sales                                           6,505    4,498    1,525     655                 2,180    13,183 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Retail profit                                     794      221      135     (2)                   133     1,148 
                                                                 -------  ------ 
 Central costs                                                                                              (60) 
 Share of interest and tax of joint 
  ventures and associates                                                                                    (2) 
 Adjusting items                                                                                              58 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Operating profit                                                                                          1,144 
 Net finance costs                                                                                         (137) 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Profit before taxation                                                                                    1,007 
---------------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 
 

Balance sheet

 
                                                                                           At 31 July 2022 
                                   ----------------------------------------------------------------------- 
 
 
 GBP millions                       UK & Ireland   France   Poland   Other   Other International     Total 
---------------------------------  -------------  -------  -------          --------------------  -------- 
 Segment assets                            3,198    1,753      988     301                 1,289     6,240 
                                                           -------  ------ 
 Central liabilities                                                                                  (45) 
 Goodwill                                                                                            2,424 
 Net debt                                                                                          (1,848) 
---------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Net assets                                                                                          6,771 
---------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 
 
 
 
                                                                                           At 31 July 2021 
                                   ----------------------------------------------------------------------- 
 
 
 GBP millions                       UK & Ireland   France   Poland   Other   Other International     Total 
---------------------------------  -------------  -------  -------          --------------------  -------- 
 Segment assets                            2,595    1,535      918     271                 1,189     5,319 
                                                           -------  ------ 
 Central liabilities                                                                                  (25) 
 Goodwill                                                                                            2,425 
 Net debt                                                                                            (908) 
---------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 Net assets                                                                                          6,811 
---------------------------------  -------------  -------  -------  ------  --------------------  -------- 
 
 
 
                                                                                         At 31 January 2022 
                                   ------------------------------------------------------------------------ 
 
 
 GBP millions                       UK & Ireland   France   Poland   Other   Other International      Total 
---------------------------------  -------------  -------  -------          --------------------  --------- 
 Segment assets                            3,052    1,682      942     332                 1,274      6,008 
                                                           -------  ------ 
 Central liabilities                                                                                   (82) 
 Goodwill                                                                                             2,424 
 Net debt                                                                                           (1,572) 
---------------------------------  -------------  -------  -------  ------  --------------------  --------- 
 Net assets                                                                                           6,778 
---------------------------------  -------------  -------  -------  ------  --------------------  --------- 
 
 

The operating segments disclosed above are based on the information reported internally to the Board of Directors and Group Executive, representing the geographical areas in which the Group operates. The Group only has one reportable business segment, being the supply of home improvement products and services. The majority of the sales in each geographical area are derived from in-store and online sales of products.

The 'Other International' segment consists of Poland, Iberia, Romania, the joint venture Koçta in Turkey, NeedHelp, Screwfix International and results from franchise agreements. Poland has been shown separately due to its significance.

Central costs principally comprise the costs of the Group's head office. Central liabilities comprise unallocated head office and other central items including central assets, pensions, insurance, interest and tax.

The Group's sales, although generally not highly seasonal on a half yearly basis, do increase over the Easter period and during the summer months leading to slightly higher sales usually being recognised in the first half of the year. However, due to the continued uncertainty around the current macro-economic environment, the phasing of sales is less predictable.

   5.         Adjusting items 
 
 
                                                     Half year ended                                        Year ended 
 GBP millions                                           31 July 2022   Half year ended 31 July 2021    31 January 2022 
--------------------------------------------------  ----------------  -----------------------------  ----------------- 
 Included within selling and distribution expenses 
 Release of France and other restructuring 
  provisions                                                       1                              -                  9 
 Net store asset impairment reversals                              -                              -                 33 
                                                                   1                              -                 42 
--------------------------------------------------  ----------------  -----------------------------  ----------------- 
 Included within administrative expenses 
 Release of France uncertain operating tax 
  position                                                         -                              7                  9 
 Commercial operating model restructuring                          -                              -                  4 
                                                                   -                              7                 13 
 Included within other income 
 Profit on exit of properties                                      1                              1                  3 
                                                                   1                              1                  3 
--------------------------------------------------  ----------------  -----------------------------  ----------------- 
 Adjusting items before tax                                        2                              8                 58 
 Prior year and other adjusting tax items                          3                             23                 48 
--------------------------------------------------  ----------------  -----------------------------  ----------------- 
 Adjusting items                                                   5                             31                106 
--------------------------------------------------  ----------------  -----------------------------  ----------------- 
 

Current year adjusting items include a GBP1m credit arising due to savings on costs relating to legacy store closure programmes in France as compared with the original restructuring provisions recognised as adjusting items.

A profit of GBP1m has been recorded on the exit of one property in the UK.

Prior year and other adjusting tax items of GBP3m relates principally to the impact of the enacted future increase in the UK tax rate on deferred tax balances. This credit has been included within the income tax expense for the period. Refer to note 7.

Refer to note 5 of the 2021/22 interim accounts for further details on adjusting items for the half year ended 31 July 2021, and to note 5 of the 2021/22 annual accounts for further details on adjusting items for the year ended 31 January 2022.

   6.         Net finance costs 
 
                                                                            Half year ended 31 July         Year ended 
 GBP millions                               Half year ended 31 July 2022                       2021    31 January 2022 
--------------------------------------  --------------------------------  -------------------------  ----------------- 
 Bank overdrafts and bank loans                                      (3)                        (4)                (7) 
 Fixed term debt                                                       -                        (2)                (3) 
 Lease liabilities                                                  (62)                       (69)              (135) 
 Other interest payable                                                -                        (1)                (3) 
 Finance costs                                                      (65)                       (76)              (148) 
-----------------------------------------------------  -----------------  -------------------------  ----------------- 
 
 Cash and cash equivalents and short-term deposits                     1                          1                  2 
 Net interest income on defined benefit pension 
  schemes                                                              6                          4                  8 
 Finance lease income                                                  1                          1                  1 
 Finance income                                                        8                          6                 11 
-----------------------------------------------------  -----------------  -------------------------  ----------------- 
 
 Net finance costs                                                  (57)                       (70)              (137) 
-----------------------------------------------------  -----------------  -------------------------  ----------------- 
 
 
   7.         Income tax expense 
 
                                                   Half year ended   Half year ended         Year ended 
 GBP millions                                         31 July 2022      31 July 2021    31 January 2022 
------------------------------------------------  ----------------  ----------------  ----------------- 
 UK corporation tax 
 Current tax on profits for the period                        (29)              (78)               (80) 
 Adjustments in respect of prior years                           -                 3                  2 
------------------------------------------------  ----------------  ----------------  ----------------- 
                                                              (29)              (75)               (78) 
------------------------------------------------  ----------------  ----------------  ----------------- 
 Overseas tax 
 Current tax on profits for the period                        (49)              (53)               (87) 
 Adjustments in respect of prior years                           -               (2)                 31 
                                                              (49)              (55)               (56) 
------------------------------------------------  ----------------  ----------------  ----------------- 
 Deferred tax 
 Current period                                               (26)              (16)               (56) 
 Adjustments in respect of prior years                           1                 -                  1 
 Adjustments in respect of changes in tax rates                  2                25                 25 
                                                              (23)                 9               (30) 
------------------------------------------------  ----------------  ----------------  ----------------- 
 
 Income tax expense                                          (101)             (121)              (164) 
------------------------------------------------  ----------------  ----------------  ----------------- 
 

The adjusted effective tax rate on profit before adjusting items is 22% (2021/22: 22%), representing the best estimate of the effective rate for the full financial year. The adjusted effective tax rate on the same basis for the year ended 31 January 2022 was 22%. The adjusted effective tax rate calculation is set out in the Financial Review in part 1 of this announcement.

During the period, a payment of EUR40m (GBP34m) was made to the French tax authorities relating to a historic tax liability. This amount was fully provided for at the prior year end.

   8.         Earnings per share 
 
                                             Half year ended                                         Year ended 
 Pence                                          31 July 2022    Half year ended 31 July 2021    31 January 2022 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 Basic earnings per share                               18.6                            26.4               40.3 
 Effect of dilutive share options                      (0.3)                           (0.2)              (0.5) 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 Diluted earnings per share                             18.3                            26.2               39.8 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 
 Basic earnings per share                               18.6                            26.4               40.3 
 Adjusting items before tax                            (0.1)                           (0.4)              (2.8) 
 Prior year and other adjusting tax items              (0.2)                           (1.1)              (2.3) 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 Adjusted basic earnings per share                      18.3                            24.9               35.2 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 
 Diluted earnings per share                             18.3                            26.2               39.8 
 Adjusting items before tax                            (0.1)                           (0.4)              (2.7) 
 Prior year and other adjusting tax items              (0.2)                           (1.1)              (2.3) 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 Adjusted diluted earnings per share                    18.0                            24.7               34.8 
------------------------------------------  ----------------  ------------------------------  ----------------- 
 
 

The calculation of basic and diluted earnings per share is based on the profit for the period attributable to equity shareholders of the Company. A reconciliation of statutory earnings to adjusted earnings is set out below:

 
 
                                          Half year ended 31 July       Half year ended 31 July           Year ended 
 GBP millions                                                2022                          2021      31 January 2022 
------------------------------------  ---------------------------  ----------------------------  ------------------- 
 Profit for the period                                        373                           556                  843 
 Adjusting items before tax                                   (2)                           (8)                 (58) 
 Prior year and other adjusting tax 
  items                                                       (3)                          (23)                 (48) 
------------------------------------  ---------------------------  ----------------------------  ------------------- 
 Adjusted profit for the period                               368                           525                  737 
------------------------------------  ---------------------------  ----------------------------  ------------------- 
 
 
 

The weighted average number of shares in issue during the period, excluding those held in the Employee Share Ownership Plan Trust ('ESOP trust'), is set out below:

 
 
                                                 Half year ended                                          Year ended 
 Weighted average number of shares (millions)       31 July 2022   Half year ended 31 July 2021      31 January 2022 
----------------------------------------------  ----------------  -----------------------------  ------------------- 
 Basic                                                     2,012                          2,103                2,092 
 Diluted                                                   2,035                          2,125                2,116 
----------------------------------------------  ----------------  -----------------------------  ------------------- 
 
 
 
   9.         Dividends 
 
                                                                   Half year ended   Half year ended        Year ended 
 GBP millions                                                         31 July 2022      31 July 2021   31 January 2022 
----------------------------------------------------------------  ----------------  ----------------  ---------------- 
 Dividends to equity shareholders of the Company 
 Ordinary final dividend for the year ended 31 January 2022 of 
 8.60p per share                                                               172                 -                 - 
 Ordinary interim dividend for the year ended 31 January 2022 of 
  3.80p per share                                                                -                 -                80 
 Ordinary final dividend for the year ended 31 January 2021 of 
  5.50p per share                                                                -               116               116 
 Ordinary interim dividend for the year end 31 January 2021 of 
  2.75p per share                                                                -                58                58 
                                                                               172               174               254 
----------------------------------------------------------------  ----------------  ----------------  ---------------- 
 

The proposed interim ordinary dividend for the period ended 31 July 2022 is 3.80p per share (2021/22: 3.80p per share).

   10.        Property, plant and equipment, investment property and other intangible assets 

Additions to the cost of property, plant and equipment, investment property and other intangible assets are GBP174m (2021/22: GBP125m) and for the year ended 31 January 2022 were GBP412m. Disposals in net book value of property, plant and equipment, investment property, property assets held for sale and other intangible assets are GBP1m (2021/22: GBP6m) and for the year ended 31 January 2022 were GBP9m.

Capital commitments contracted but not provided for at the end of the period are GBP55m (2021/22: GBP64m) and at 31 January 2022 were GBP31m.

   11.        Post-employment benefits 
 
                                                  Half year ended   Half year ended        Year ended 
 GBP millions                                        31 July 2022      31 July 2021   31 January 2022 
 Net surplus in schemes at beginning of period                410               359               359 
 Current service cost                                         (6)               (6)              (14) 
 Administration costs                                         (2)               (2)               (3) 
 Net interest income                                            6                 4                 8 
 Net remeasurement (losses)/gains                            (14)              (12)                21 
 Contributions paid by employer                                13                13                30 
 Exchange differences                                         (1)                 5                 9 
-----------------------------------------------  ----------------  ----------------  ---------------- 
 Net surplus in schemes at end of period                      406               361               410 
-----------------------------------------------  ----------------  ----------------  ---------------- 
 
 
 UK                                           542     506     540 
 Overseas                                   (136)   (145)   (130) 
-----------------------------------------  ------  ------  ------ 
 Net surplus in schemes at end of period      406     361     410 
-----------------------------------------  ------  ------  ------ 
 
 
 Present value of defined benefit obligations    (2,408)   (3,310)   (3,084) 
 Fair value of scheme assets                       2,814     3,671     3,494 
----------------------------------------------  --------  --------  -------- 
 Net surplus in schemes at end of period             406       361       410 
----------------------------------------------  --------  --------  -------- 
 

The assumptions used in calculating the costs and obligations of the Group's defined benefit pension schemes are set by the Directors after consultation with independent professionally qualified actuaries. The assumptions are based on the conditions at the time and changes in these assumptions can lead to significant movements in the estimated obligations, as illustrated in the sensitivity analysis provided in note 28 of the annual financial statements for the year ended 31 January 2022.

A full actuarial valuation of the scheme is carried out every three years by an independent actuary for the Trustee and the last full valuation was carried out as at 31 March 2019 with the next valuation currently ongoing.

A key assumption in valuing the pension obligation is the discount rate. Accounting standards require this to be set based on market yields on high quality corporate bonds at the balance sheet date. The UK scheme discount rate is derived using a single equivalent discount rate approach, based on the yields available on a portfolio of high-quality Sterling corporate bonds with the same duration as that of the scheme liabilities.

The principal financial assumptions for the UK scheme, being the Group's principal defined benefit scheme, are set out below:

 
                              At             At                At 
 Annual % rate      31 July 2022   31 July 2021   31 January 2022 
-----------------  -------------  -------------  ---------------- 
 Discount rate               3.4            1.6               2.2 
 Price inflation             3.3            3.2               3.5 
-----------------  -------------  -------------  ---------------- 
 
   12.        Financial instruments 

The Group holds the following derivative financial instruments at fair value:

 
                                         At             At                At 
 GBP millions                  31 July 2022   31 July 2021   31 January 2022 
----------------------------  -------------  -------------  ---------------- 
 Foreign exchange contracts              84             11                38 
----------------------------  -------------  -------------  ---------------- 
 Derivative assets                       84             11                38 
----------------------------  -------------  -------------  ---------------- 
 
 
                                                 At             At                At 
 GBP millions                          31 July 2022   31 July 2021   31 January 2022 
------------------------------------  -------------  -------------  ---------------- 
 Cross currency interest rate swaps               -            (2)                 - 
 Foreign exchange contracts                    (13)           (25)              (13) 
------------------------------------  -------------  -------------  ---------------- 
 Derivative liabilities                        (13)           (27)              (13) 
------------------------------------  -------------  -------------  ---------------- 
 

The fair values are calculated by discounting future cash flows arising from the instruments and adjusted for credit risk. These fair value measurements are all made using observable market rates of interest, foreign exchange and credit risk. All the derivatives held by the Group at fair value are considered to have fair values determined by level 2 inputs as defined by the fair value hierarchy of IFRS 13, 'Fair value measurement', representing significant observable inputs other than quoted prices in active markets for identical assets or liabilities. There are no non-recurring fair value measurements nor have there been any transfers of assets or liabilities between levels of the fair value hierarchy.

Except as detailed in the following table of borrowings, the carrying amounts of financial instruments (excluding lease liabilities) recorded at amortised cost in the financial statements are approximately equal to their fair values. Where available, market values have been used to determine the fair values of borrowings. Where market values are not available or are not reliable, fair values have been calculated by discounting cash flows at prevailing interest and foreign exchange rates. This has resulted in level 2 inputs for borrowings as defined by the IFRS 13 fair value hierarchy.

 
                                                     Carrying amount 
                               At              At                 At 
 GBP millions        31 July 2022    31 July 2021    31 January 2022 
-----------------  --------------  --------------  ----------------- 
 Bank overdrafts               17              19                 14 
 Bank loans                     1               3                  2 
 Fixed term debt                -              91                  - 
-----------------  --------------  --------------  ----------------- 
 Borrowings                    18             113                 16 
-----------------  --------------  --------------  ----------------- 
 
 
                                                          Fair value 
                   --------------  --------------  ----------------- 
                               At              At                 At 
 GBP millions        31 July 2022    31 July 2021    31 January 2022 
-----------------  --------------  --------------  ----------------- 
 Bank overdrafts               17              19                 14 
 Bank loans                     1               3                  3 
 Fixed term debt                -              93                  - 
-----------------  --------------  --------------  ----------------- 
 Borrowings                    18             115                 17 
-----------------  --------------  --------------  ----------------- 
 

Cash and borrowings balances at 31 July 2022, 31 July 2021 and 31 January 2022 reflect the grossing up of cash and overdraft balances subject to the Group's cash pooling arrangements to ensure the Group's presentation of these balances is in line with the requirements for offsetting in accordance with IAS 32.

As at 31 July 2022, the Group had an undrawn revolving credit facility (RCF) of GBP550m due to expire in May 2025 (2021/22: GBP550m RCF due to expire in May 2024). As at 31 January 2022, the Group had an undrawn RCF of GBP550m due to expire in May 2024.

   13.        Share Capital 
 
                                            Number of ordinary shares   Ordinary share capital 
                                                             millions             GBP millions 
 Allotted, called up and fully paid: 
 At 1 February 2022                                             2,066                      325 
 New shares issued under share schemes                              1                        - 
 Purchase of own shares for cancellation                         (82)                     (13) 
-----------------------------------------  --------------------------  ----------------------- 
 At 31 July 2022                                                1,985                      312 
-----------------------------------------  --------------------------  ----------------------- 
 
 At 1 February 2021                                             2,111                      332 
 At 31 July 2021                                                2,111                      332 
-----------------------------------------  --------------------------  ----------------------- 
 
 At 1 February 2021                                             2,111                      332 
 New shares issued under share schemes                              2                        - 
 Purchase of own shares for cancellation                         (47)                      (7) 
-----------------------------------------  --------------------------  ----------------------- 
 At 31 January 2022                                             2,066                      325 
-----------------------------------------  --------------------------  ----------------------- 
 

Ordinary shares have a par value of 155/(7) pence per share and carry full voting, dividend and capital distribution rights.

During the half-year the Group purchased 82 million of the Company's own shares for cancellation at a cost of GBP218m as part of its capital returns programme.

   14.        Other reserves 
 
                                                                                        Half year ended 31 July 2022 
                                                    ---------------------------------------------------------------- 
                                                                                         Cash flow 
   GBP millions                                      Translation reserve             hedge reserve   Other     Total 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 1 February 2022                                                   10                        27     159       196 
---------------------------------------  -------------------------------  ------------------------  ------  -------- 
 Inventory cash flow hedges - fair 
  value gains                                                          -                       113       -       113 
 Tax on items that will not be reclassified 
  subsequently to profit or loss                                       -                      (28)       -      (28) 
 
   Currency translation differences 
    Group                                                           (22)                         -       -      (22) 
   Joint ventures and associates                                     (1)                         -       -       (1) 
 Other comprehensive (expense)/income for the 
  period                                                            (23)                        85       -        62 
 Inventory cash flow hedges - gains transferred to 
  inventories                                                          -                      (61)       -      (61) 
 Tax on equity items                                                 (1)                        15       -        14 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 31 July 2022                                                    (14)                        66     159       211 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 
 
                                                                                        Half year ended 31 July 2021 
                                                    ---------------------------------------------------------------- 
                                                                                         Cash flow 
   GBP millions                                      Translation reserve             hedge reserve   Other     Total 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 1 February 2021                                                  234                      (32)     159       361 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 Inventory cash flow hedges - fair value gains                         -                         6       -         6 
 Tax on items that will not be reclassified 
  subsequently to profit or loss                                       -                       (2)       -       (2) 
 Currency translation differences 
  Group                                                            (148)                         -       -     (148) 
   Joint ventures and associates                                     (2)                         -       -       (2) 
   Other cash flow hedges 
    Fair value gains                                                   -                         4       -         4 
    Gains transferred to income statement                              -                       (4)       -       (4) 
 Other comprehensive (expense)/income for the 
  period                                                           (150)                         4       -     (146) 
 Inventory cash flow hedges - losses transferred 
  to inventories                                                       -                        34       -        34 
 Tax on equity items                                                   -                       (8)       -       (8) 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 31 July 2021                                                      84                       (2)     159       241 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 
                                                                                          Year ended 31 January 2022 
                                                    ---------------------------------------------------------------- 
 GBP millions                                        Translation reserve   Cash flow hedge reserve   Other     Total 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 1 February 2021                                                  234                      (32)     159       361 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 Inventory cash flow hedges - fair value gains                         -                        59       -        59 
 Tax on items that will not be reclassified 
  subsequently to profit or loss                                       -                      (13)       -      (13) 
   Currency translation differences 
    Group                                                          (218)                         -       -     (218) 
    Joint ventures and associates                                    (7)                         -       -       (7) 
   Other cash flow hedges 
    Fair value gains                                                   -                         1       -         1 
   Gains transferred to income statement                               -                       (1)       -       (1) 
 Other comprehensive (expense)/income for the year                 (225)                        46       -     (179) 
 Inventory cash flow hedges - losses transferred 
  to inventories                                                       -                        16       -        16 
 Tax on equity items                                                   1                       (3)       -       (2) 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 At 31 January 2022                                                   10                        27     159       196 
--------------------------------------------------  --------------------  ------------------------  ------  -------- 
 
 
   15.        Cash generated by operations 
 
                                                                  Half year ended   Half year ended         Year ended 
 GBP millions                                                        31 July 2022      31 July 2021    31 January 2022 
---------------------------------------------------------------  ----------------  ----------------  ----------------- 
 Operating profit                                                             531               747              1,144 
 Share of post-tax results of joint ventures and associates                   (5)               (1)                (5) 
 Depreciation and amortisation                                                282               273                555 
 Net impairment charges/(reversals)                                             -                 2               (31) 
 (Gain)/loss on disposal of property, plant and equipment, 
  investment property, assets held 
  for sale and intangible assets                                                -               (1)                  1 
 Lease gains                                                                  (2)                 -                (1) 
 Share-based compensation charge                                               11                14                 27 
 Increase in inventories                                                    (395)             (303)              (359) 
 Increase in trade and other receivables                                     (59)              (33)               (23) 
 Increase in trade and other payables                                         231               487                158 
 Movement in provisions                                                       (5)              (19)               (42) 
 Movement in post-employment benefits                                         (5)               (5)               (13) 
---------------------------------------------------------------  ----------------  ----------------  ----------------- 
 Cash generated by operations                                                 584             1,161              1,411 
---------------------------------------------------------------  ----------------  ----------------  ----------------- 
 
   16.        Net debt 
 
                                                                               At                At                 At 
 GBP millions                                                        31 July 2022      31 July 2021    31 January 2022 
-----------------------------------------------------------------  --------------  ----------------  ----------------- 
 Cash and cash equivalents                                                    496             1,535                823 
 Bank overdrafts                                                             (17)              (19)               (14) 
-----------------------------------------------------------------  --------------  ----------------  ----------------- 
 Cash and cash equivalents and bank overdrafts                                479             1,516                809 
 Bank loans                                                                   (1)               (3)                (2) 
 Fixed term debt                                                                -              (91)                  - 
 Lease liabilities                                                        (2,318)           (2,319)            (2,376) 
 Net financing derivatives                                                    (8)              (11)                (3) 
-----------------------------------------------------------------  --------------  ----------------  ----------------- 
 Net debt                                                                 (1,848)             (908)            (1,572) 
-----------------------------------------------------------------  --------------  ----------------  ----------------- 
 
                                                                  Half year ended   Half year ended         Year ended 
 GBP millions                                                        31 July 2022      31 July 2021    31 January 2022 
-------------------------------------------------------------  ------------------  ----------------  ----------------- 
 Net debt at beginning of period                                          (1,572)           (1,394)            (1,394) 
-------------------------------------------------------------  ------------------  ----------------  ----------------- 
 Net (decrease)/increase in cash and cash equivalents and 
  bank overdrafts                                                           (329)               444              (237) 
 Repayment of bank loans                                                        -                 3                  2 
 Repayment of fixed term debt                                                   -                 -                 95 
 Net cash flow                                                              (329)               447              (140) 
 Movements in lease liabilities                                                57                78                  7 
 Exchange differences and other non-cash movements                            (4)              (39)               (45) 
-------------------------------------------------------------  ------------------  ----------------  ----------------- 
 Net debt at end of period                                                (1,848)             (908)            (1,572) 
-------------------------------------------------------------  ------------------  ----------------  ----------------- 
 
 
   17.        Contingent liabilities 

The Group is subject to claims and litigation arising in the ordinary course of business and provision is made where liabilities are considered likely to arise on the basis of current information and legal advice.

The Group files tax returns in many jurisdictions around the world and at any one time is subject to periodic tax audits in the ordinary course of its business. Applicable tax laws and regulations are subject to differing interpretations and the resolution of a final tax position can take several years to complete. Where it is considered that future tax liabilities are more likely than not to arise, an appropriate provision is recognised in the financial statements.

In October 2017, the European Commission opened a state aid investigation into the Group Financing Exemption section of the UK controlled foreign company rules. While the Group has complied with the requirements of UK tax law in force at the time, in April 2019 the European Commission concluded that aspects of the UK controlled foreign company regime partially constitute illegal state aid. In January 2021, the Group received a charging notice from HM Revenue & Customs for GBP57m, which was paid in February 2021, with a further GBP7m interest paid in April 2021.

The UK Government and the Group, along with other UK-based multinational groups, appealed the European Commission decision to the European Courts. On 8 June 2022, the General Court of the European Union dismissed several of those appeals, including the UK Government's. It is expected that this decision will be appealed to the European Court of Justice.

The final impact on the Group remains uncertain but, based upon advice taken, the Group continues to consider that the amount paid of GBP64m, which is included in non-current assets, will ultimately be recovered.

Whilst the procedures that must be followed to resolve these types of tax issues make it likely that it will be some years before the eventual outcome is known, the Group does not currently expect the outcome of these contingent liabilities to have a material effect on the Group's financial position.

   18.        Related party transactions 

The Group's significant related parties are its joint venture, associate and pension schemes as disclosed in note 38 of the annual financial statements for the year ended 31 January 2022. There have been no significant changes in related parties or related party transactions in the period.

   19.        Post balance sheet events 

During the period since the balance sheet date, the Group purchased 25 million of the Company's own shares for cancellation at a cost of GBP60m. This amount was deducted from equity in the half-year to 31 July 2022 as a result of an irrevocable buyback agreement which was in place at 31 July 2022.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors confirm that the condensed interim financial statements have been prepared in accordance with United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting", and that the Interim Results includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-- an indication of important events that have occurred during the period and their impact on the interim condensed financial statements, and a description of the principal risks and uncertainties for the remainder of the financial year; and

-- material related party transactions in the period and any material changes in the related party transactions described in the last annual report.

The Directors of Kingfisher plc were listed in the Group's 2021/22 Annual Report and Accounts. Bill Lennie joined the Board as a non-executive Director on 1 May 2022. A list of current Directors is maintained on the Kingfisher plc website which can be found at www.kingfisher.com .

By order of the Board

   Thierry Garnier                                                                     Bernard Bot 

Chief Executive Officer Chief Financial Officer

   19 September 2022                                                            19 September 2022 

INDEPENDENT REVIEW REPORT TO KINGFISHER PLC

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2022 which comprises the condensed income statement, the condensed statement of comprehensive income, the condensed statement of changes in equity, the condensed balance sheet, the condensed cash flow statement and related notes 1 to 19.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2022 is not prepared, in all material respects, in accordance with United Kingdom adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with United Kingdom adopted international accounting standards and International Financial Reporting Standards as issued by the IASB. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusion Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This Conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410; however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly financial report, we are responsible for expressing to the company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Deloitte LLP

Statutory Auditor

London, United Kingdom

19 September 2022

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September 20, 2022 02:00 ET (06:00 GMT)

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Kingfisher (LSE:KGF)
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De Mar 2023 a Mar 2024 Haga Click aquí para más Gráficas Kingfisher.