Kingfisher 2012 half yearly results - dividend boosted 25%

Kingfisher reports half year sales down 3.3%, up 1% in constant currencies, adjusted pre-tax profits down 15.5% to £371 million

Note: Joint Venture (Koçtaş JV) and Associate (Hornbach) sales are not consolidated. Retail profit is operating profit stated before central costs, exceptional items, amortisation of acquisition intangibles and the Group's share of interest and tax of JVs and associates. Adjusted measures are before exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and tax on prior year items. A reconciliation to statutory amounts is set out in the Financial Review (Section 5).

Highlights:

Results significantly impacted by

• £25 million adverse foreign exchange movements when translating euro and zloty overseas profits into sterling for reporting purposes
• Over £30 million less profit from record wet weather in the UK and Northern Europe, significantly impacting footfall. Seasonal product sales were down 7% resulting in higher seasonal markdowns to clear excess seasonal stocks and additional marketing to drive footfall and share
• Around £10 million cost of accelerating the national roll out of new common own brands in the UK
• On-going self-help initiatives, including higher direct sourcing, helped limit the overall profit decline 
• Free cash flow generation up year on year, ending H1 with £29 million net cash
• 'Creating the Leader' programme well underway, 2012/13 milestone delivery on track
• £5 million net exceptional charge post tax, primarily relating to streamlining support offices offset by the closure of the final salary pension scheme to future accrual in the UK
• Interim dividend up 25.1%, calculated automatically as 35% of the prior year's total dividend in line with stated policy

Note: A reconciliation to adjusted measures above is set out in the Financial Review (Section 5).

Ian Cheshire, Group Chief Executive, said:

"This has been a tough first half with unprecedented wet weather throughout the key spring and summer seasons in Northern Europe. This affected footfall and demand for outdoor maintenance, gardening and leisure products, which normally account for a significant proportion of our first half sales.

"However, we took action to clear excess seasonal stocks, drive indoor product sales and tightly manage cash, as well as accelerating our self-help initiatives. Whilst we were unable to offset fully the adverse weather impacts, our efforts meant we exited the first half in as good shape as possible and with net cash on the balance sheet. Our new medium term self-help plan, 'Creating the Leader', is now well underway and we are on track to deliver our key milestones for 2012/13.

"Whilst an uncertain economic backdrop has been a feature of our markets for some time, we recognise that this is unlikely to improve for a while. In the short term we will continue to focus on trading effectively, whatever the market conditions, whilst accelerating our self-help initiatives where practical and remaining agile in order to capitalise on opportunities as they arise. Having got off to a good start with our new 'Creating the Leader' programme, I am very confident that we can create a world class home improvement retailer and unlock the full potential of our international talent and scale."