Consolidated income statement
Year ended  31 January 2015
				2014/15	2013/14 (restated - note 2)
		Before	Exceptional		Before	Exceptional
		exceptional	items		exceptional	items
£ millions	Notes	Items	(note 4)	Total	items	(note 4)	Total
Sales	3	10,966	-	10,966	11,125	-	11,125
Cost of sales		(6,918)	-	(6,918)	(7,005)	-	(7,005)
Gross profit		4,048	-	4,048	4,120	-	4,120
Selling and distribution expenses		(2,835)	(32)	(2,867)	(2,883)	2	(2,881)
Administrative expenses		(571)	-	(571)	(550)	-	(550)
Other income		40	(3)	37	37	2	39
Share of post-tax results of joint ventures and associates		5	-	5	22	(14)	8
Operating profit		687	(35)	652	746	(10)	736
Analysed as:
Retail profit	3	733	(35)	698	779	4	783
Central costs		(40)	-	(40)	(42)	-	(42)
Share of interest and tax of joint ventures and associates		(6)	-	(6)	(5)	-	(5)
Share of Hornbach operating profit		-	-	-	26	(14)	12
Share of Hornbach interest and tax		-	-	-	(12)	-	(12)
Finance costs		(13)	-	(13)	(12)	-	(12)
Finance income		5	-	5	8	27	35
Net finance (costs)/income	5	(8)	-	(8)	(4)	27	23
Profit before taxation		679	(35)	644	742	17	759
Income tax expense	6	(177)	106	(71)	(163)	114	(49)
Profit for the year		502	71	573	579	131	710
Attributable to:
Equity shareholders of the Company				573			709
Non-controlling interests				-			1
				573			710
Earnings per share	7
Basic				24.3p			30.0p
Diluted				24.2p			29.7p
Adjusted basic				20.9p			22.8p
Adjusted diluted				20.8p			22.6p

 

 

The proposed final dividend for the year ended 31 January 2015, subject to approval by shareholders at the Annual General Meeting, is 6.85p per share.

 

Consolidated statement of comprehensive income Year ended  31 January 2015
£ millions	Notes	2014/15	2013/14
Profit for the year		573	710
Actuarial gains/(losses) on post-employment benefits	9	175	(127)
Tax on items that will not be reclassified		(85)	65
Total items that will not be reclassified subsequently to profit or loss		90	(62)
Currency translation differences
Group		(308)	(210)
Joint ventures and associates		(2)	(25)
Transferred to income statement (note 4)		-	(31)
Cash flow hedges
Fair value gains/(losses)		70	(4)
(Gains)/losses transferred to inventories		(5)	9
Tax on items that may be reclassified		(14)	2
Total items that may be reclassified subsequently to profit or loss		(259)	(259)
Other comprehensive income for the year		(169)	(321)
Total comprehensive income for the year		404	389
Attributable to:
Equity shareholders of the Company		403	388
Non-controlling interests		1	1
		404	389

 

Consolidated statement of changes in equity Year ended  31 January 2015
	Attributable to equity shareholders of the Company
£ millions		Share capital	Share premium	Own shares held	Retained earnings	Other reserves	Total	Non-controlling interests	Total equity
At 2 February 2014		373	2,209	(35)	3,495	266	6,308	9	6,317
Profit for the year		-	-	-	573	-	573	-	573
Other comprehensive income for the year		-	-	-	90	(260)	(170)	1	(169)
Total comprehensive income for the year		-	-	-	663	(260)	403	1	404
Share-based compensation		-	-	-	11	-	11	-	11
New shares issued under share schemes		1	5	-	-	-	6	-	6
Own shares issued under share schemes		-	-	26	(24)	-	2	-	2
Purchase of own shares for cancellation		(5)	-	-	(150)	5	(150)	-	(150)
Purchase of own shares for ESOP trust		-	-	(17)	-	-	(17)	-	(17)
Dividends		-	-	-	(334)	-	(334)	-	(334)
At 31 January 2015		369	2,214	(26)	3,661	11	6,229	10	6,239
At 3 February 2013		373	2,204	(60)	3,106	525	6,148	8	6,156
Profit for the year		-	-	-	709	-	709	1	710
Other comprehensive income for the year		-	-	-	(62)	(259)	(321)	-	(321)
Total comprehensive income for the year		-	-	-	647	(259)	388	1	389
Share-based compensation		-	-	-	7	-	7	-	7
New shares issued under share schemes		-	5	-	-	-	5	-	5
Own shares issued under share schemes		-	-	49	(41)	-	8	-	8
Purchase of own shares for ESOP trust		-	-	(24)	-	-	(24)	-	(24)
Dividends		-	-	-	(224)	-	(224)	-	(224)
At 1 February 2014		373	2,209	(35)	3,495	266	6,308	9	6,317

 

Consolidated balance sheet
At 31 January 2015
£ millions	Notes	2014/15	2013/14
Non-current assets
Goodwill		2,414	2,417
Other intangible assets		258	222
Property, plant and equipment		3,203	3,625
Investment property		30	50
Investments in joint ventures and associates		28	32
Post-employment benefits	9	194	-
Deferred tax assets		10	12
Derivative assets		52	40
Other receivables		7	15
		6,196	6,413
Current assets
Inventories		2,021	2,054
Trade and other receivables		537	590
Derivative assets		70	5
Current tax assets		6	15
Short-term deposits		48	-
Cash and cash equivalents		561	535
Assets held for sale		274	208
		3,517	3,407
Total assets		9,713	9,820
Current liabilities
Trade and other payables		(2,323)	(2,486)
Borrowings		(105)	(94)
Derivative liabilities		(10)	(27)
Current tax liabilities		(87)	(175)
Provisions		(13)	(8)
Liabilities held for sale		(195)	-
		(2,733)	(2,790)
Non-current liabilities
Other payables		(64)	(86)
Borrowings		(232)	(230)
Deferred tax liabilities		(329)	(251)
Provisions		(34)	(46)
Post-employment benefits	9	(82)	(100)
		(741)	(713)
Total liabilities		(3,474)	(3,503)
Net assets		6,239	6,317
Equity
Share capital		369	373
Share premium		2,214	2,209
Own shares held in ESOP trust		(26)	(35)
Retained earnings		3,661	3,495
Other reserves		11	266
Total attributable to equity shareholders of the Company		6,229	6,308
Non-controlling interests		10	9
Total equity		6,239	6,317

 

The financial statements were approved by the Board of Directors on 30 March 2015 and signed on its behalf by:

 

 

 

Véronique Laury                                                                 Karen Witts

Chief Executive Officer                                                        Chief Financial Officer

 

Consolidated cash flow statement
Year ended 31 January 2015
£ millions	Notes	2014/15	2013/14
Operating activities
Cash generated by operations	10	806	976
Income tax paid		(146)	(142)
Net cash flows from operating activities		660	834
Investing activities
Purchase of businesses, net of cash acquired		-	(28)
Disposal of Hornbach		198	-
Disposal of China (deposit received)		12	-
Purchase of property, plant and equipment, investment property and intangible assets		(275)	(304)
Disposal of property, plant and equipment, investment property and intangible assets		50	12
Increase in short-term deposits		(48)	-
Interest received		5	8
Dividends received from joint ventures and associates		7	11
Net cash flows from investing activities		(51)	(301)
Financing activities
Interest paid		(10)	(12)
Interest element of finance lease rental payments		(3)	(4)
Repayment of bank loans		(2)	(89)
Repayment of Medium Term Notes and other fixed term debt		(73)	(33)
(Payment)/receipt on financing derivatives		(9)	6
Capital element of finance lease rental payments		(14)	(13)
New shares issued under share schemes		6	5
Own shares issued under share schemes		2	8
Purchase of own shares for ESOP trust		(17)	(24)
Purchase of own shares for cancellation		(100)	-
Special dividends paid to equity shareholders of the Company		(100)	-
Ordinary dividends paid to equity shareholders of the Company		(234)	(224)
Net cash flows from financing activities		(554)	(380)
Net increase in cash and cash equivalents and bank overdrafts		55	153
Cash and cash equivalents and bank overdrafts at beginning of year		534	398
Exchange differences		(62)	(17)
Cash and cash equivalents and bank overdrafts, including amounts classified as held for sale, at end of year		527	534
Cash and cash equivalents classified as held for sale (China)		(57)	-
Cash and cash equivalents and bank overdrafts at end of year	11	470	534

Notes

 

1          General information

 

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

 

The Company is incorporated in the United Kingdom. The address of its registered office is 3 Sheldon Square, Paddington, London W2 6PX.

 

The Company is listed on the London Stock Exchange.

 

2          Basis of preparation

 

The consolidated financial statements of the Company, its subsidiaries, joint ventures and associates are made up to the nearest Saturday to 31 January each year.  The current financial year is the 52 weeks ended 31 January 2015 ('the year' or '2014/15').  The comparative financial year is the 52 weeks ended 1 February 2014 ('the prior year' or '2013/14').

 

The directors of Kingfisher plc, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 January 2015.

 

The condensed financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated balance sheet, consolidated cash flow statement and related notes do not constitute statutory financial statements for the 52 weeks ended 31 January 2015, but are derived from those statements. Statutory financial statements for 2013/14 have been filed with the Registrar of Companies and those for 2014/15 will be filed in due course. The Group's auditors have reported on both years' accounts; their reports were unqualified and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006. 

 

The condensed financial information has been abridged from the 2014/15 statutory financial statements, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS') and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and therefore the consolidated financial statements comply with Article 4 of the EU IAS legislation. The consolidated income statement and related notes represent results for continuing operations, there being no discontinued operations in the periods presented. The condensed financial information has been prepared under the historical cost convention, as modified by the use of valuations for certain financial instruments, share-based payments and post-employment benefits.

 

Accounting policies

 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 1 February 2014, as described in note 2 of those financial statements.

 

There are no standards, amendments to standards or interpretations that are both mandatory for the first time for the financial year ending 31 January 2015 and which have a material impact on the Group's results.

Principal rates of exchange

 

		2014/15		2013/14
	Average rate	Year end rate	Average rate	Year end rate
Euro	1.25	1.33	1.18	1.22
US Dollar	1.64	1.50	1.57	1.64
Polish Zloty	5.23	5.57	4.95	5.17
Russian Rouble	66.70	105.58	50.49	57.81
Chinese Renminbi	10.11	9.39	9.62	9.97

 

Use of non-GAAP measures

 

In the reporting of financial information, the Group uses certain measures that are not required under IFRS, the generally accepted accounting principles (GAAP) under which the Group reports. Kingfisher believes that retail profit, adjusted pre-tax profit, effective tax rate, adjusted earnings and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These and other non-GAAP measures such as net debt/cash are used by Kingfisher for internal performance analysis and incentive compensation arrangements for employees. The terms 'retail profit', 'exceptional items', 'adjusted', 'effective tax rate' and 'net debt/cash' are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures.

 

Retail profit is defined as continuing operating profit before central costs (principally the costs of the Group's head office), exceptional items, amortisation of acquisition intangibles and the Group's share of interest and tax of joint ventures and associates. 2013/14 comparatives have been restated to exclude the share of Hornbach operating profit.

 

The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group's underlying business performance. The principal items which are included as exceptional items are:

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

·      profits and losses on the disposal of properties and impairment losses on non-operational assets; and

·      the costs of significant restructuring and incremental acquisition integration costs.

 

The term 'adjusted' refers to the relevant measure being reported for continuing operations excluding exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and prior year tax items (including the impact of changes in tax rates on deferred tax). 2013/14 comparatives have been restated to exclude the share of Hornbach results. Financing fair value remeasurements represent changes in the fair value of financing derivatives, excluding interest accruals, offset by fair value adjustments to the carrying amount of borrowings and other hedged items under fair value hedge relationships. Financing derivatives are those that relate to underlying items of a financing nature.

 

The effective tax rate represents the effective income tax expense as a percentage of continuing profit before taxation excluding exceptional items. Effective income tax expense is the continuing income tax expense excluding tax on exceptional items and tax adjustments in respect of prior years and the impact of changes in tax rates on deferred tax.

 

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

 

Prior year restatement

 

The following non-GAAP measures have been restated in the comparatives to exclude the contribution of Hornbach, in order to improve comparability following its disposal in the current year:

 

					2013/14
£ millions				Before restatement		Restatement	After restatement
Retail profit - Group				805		(26)	779
Retail profit - Other International				171		(26)	145
Adjusted pre-tax profit				744		(14)	730
Adjusted earnings				552		(14)	538
Adjusted basic earnings per share				23.4p		(0.6)p	22.8p
Adjusted diluted earnings per share				23.2p		(0.6)p	22.6p

 

There was no contribution from Hornbach to the current year adjusted (non-GAAP) results. Statutory (GAAP) measures have not been restated.

 

 

3          Segmental analysis

 

Income statement

	2014/15
£ millions	UK & Ireland	France	Other International		Total
			Poland	Other
Sales	4,600	4,132	1,055	1,179	10,966
Retail profit	276	349	118	(10)	733
Central costs					(40)
Share of interest and tax of joint ventures and associates					(6)
Exceptional items					(35)
Operating profit					652
Net finance costs					(8)
Profit before taxation					644

 

	2013/14 (restated - note 2)
£ millions	UK & Ireland	France	Other International		Total
			Poland	Other
Sales	4,363	4,423	1,109	1,230	11,125
Retail profit	238	396	123	22	779
Central costs					(42)
Share of interest and tax of joint ventures and associates					(5)
Share of Hornbach operating profit					26
Share of Hornbach interest and tax					(12)
Exceptional items					(10)
Operating profit					736
Net finance income (including £27m exceptional credit)					23
Profit before taxation					759

 

The operating segments disclosed above are based on the information reported internally to the Board of Directors and Group Executive. This information is predominantly based on the geographical areas in which the Group operates and which are managed separately. The Group only has one business segment being the supply of home improvement products and services.

 

The 'Other International' segment consists of Poland, China, Germany, Portugal, Romania, Russia, Spain and the joint venture Koçtas in Turkey. Poland has been shown separately due to its significance.

 

Central costs principally comprise the costs of the Group's head office.

 

4        Exceptional items

 

£ millions	2014/15	2013/14
Included within selling and distribution expenses
UK & Ireland restructuring	(17)	7
Transaction costs	(15)	(5)
	(32)	2
Included within other income
Disposal of properties and non-operational asset losses	(3)	2
	(3)	2
Included within share of post-tax results of joint ventures and associates
Net impairment of investment in Hornbach	-	(14)
	-	(14)
Included within finance income
Kesa demerger French tax case - repayment supplement income	-	27
	-	27
Exceptional items before tax	(35)	17
Exceptional tax items	106	114
Exceptional items	71	131

 

Current year exceptional items include a £17m restructuring charge in the UK relating to the transformation of B&Q, driven by productivity initiatives aimed at delivering a simpler, more efficient business with a lower cost operating model.

 

The prior year exceptional credit of £7m reflected the release of provisions that had been recorded in January 2013 when B&Q Ireland entered into an Examinership process, which it successfully exited in May 2013 with the closure of only one store.

 

Current year transaction costs of £15m have been incurred, including costs relating to Mr Bricolage and the agreement to sell a controlling stake in the B&Q China business (2013/14: £5m principally related to Bricostore Romania).

 

There is a net charge of £3m relating to the disposal of properties and impairment of non-operational assets (2013/14: £2m profit).

 

A net impairment loss of £14m was recognised in the prior year on the Group's investment in Hornbach. This comprised a loss of £45m on remeasurement of the investment to fair value, offset by a £31m gain on the transfer from reserves of cumulative foreign exchange gains since transition to IFRS.

 

The current year exceptional tax credit of £106m includes the tax impact on exceptional items and the release of prior year provisions, which have either been agreed with the tax authorities, reassessed, or time expired.

 

In the prior year there was an exceptional tax credit of £114m, which included £118m taxation provision releases related to the successful resolution of the Kesa demerger French tax case. A £27m repayment supplement provision release was also recognised in relation to this case.

 

 

5        Net finance (costs)/income

 

£ millions	2014/15	2013/14
Bank overdrafts and bank loans	(7)	(3)
Medium Term Notes and other fixed term debt	(3)	(3)
Finance leases	(3)	(4)
Financing fair value remeasurements	4	(2)
Unwinding of discount on provisions	(1)	-
Net interest expense on defined benefit pension schemes	(3)	-
Finance costs	(13)	(12)
Cash and cash equivalents and short-term deposits	5	6
Net interest income on defined benefit pension schemes	-	2
Kesa demerger French tax case - repayment supplement income (note 4)	-	27
Finance income	5	35
Net finance (costs)/income	(8)	23

 

6        Income tax expense

 

£ millions	2014/15	2013/14
Current tax
Current tax on profits for the year	184	178
Other adjustments in respect of prior years	(102)	(136)
	82	42
Deferred tax
Current year	(12)	16
Adjustments in respect of changes in tax rates	1	(9)
	(11)	7
Income tax expense	71	49

 

The effective rate of tax on profit before exceptional items and excluding prior year tax adjustments and the impact of changes in tax rates on deferred tax is 27% (2013/14: 26%). Exceptional tax items for the year amount to a credit of £106m, £95m of which relates to prior year items. In 2013/14 exceptional tax items amounted to a credit of £114m, with £118m relating to prior year items.

7          Earnings per share

 

		2014/15			2013/14 (restated - note 2)
	Earnings	Weighted average number of shares	Earnings per share	Earnings	Weighted average number of shares	Earnings per share
	£ millions	millions	pence	£ millions	millions	pence
Basic earnings per share	573	2,358	24.3	709	2,363	30.0
Effect of dilutive share options		11	(0.1)		19	(0.3)
Diluted earnings per share	573	2,369	24.2	709	2,382	29.7
Basic earnings per share	573	2,358	24.3	709	2,363	30.0
Share of Hornbach post-tax results	-		-	(14)		(0.6)
Exceptional items before tax	35		1.5	(17)		(0.7)
Tax on exceptional and prior year items	(112)		(4.8)	(141)		(6.0)
Financing fair value remeasurements	(4)		(0.2)	2		0.1
Tax on financing fair value remeasurements	1		0.1	(1)		-
Adjusted basic earnings per share	493	2,358	20.9	538	2,363	22.8
Diluted earnings per share	573	2,369	24.2	709	2,382	29.7
Share of Hornbach post-tax results	-		-	(14)		(0.6)
Exceptional items before tax	35		1.5	(17)		(0.7)
Tax on exceptional and prior year items	(112)		(4.8)	(141)		(5.9)
Financing fair value remeasurements	(4)		(0.2)	2		0.1
Tax on financing fair value remeasurements	1		0.1	(1)		-
Adjusted diluted earnings per share	493	2,369	20.8	538	2,382	22.6

 

Basic earnings per share is calculated by dividing the profit for the year attributable to equity shareholders of the Company by the weighted average number of shares in issue during the year, excluding those held in the Employee Share Ownership Plan Trust ('ESOP') which for the purpose of this calculation are treated as cancelled.

 

For diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of all dilutive potential ordinary shares. These represent share options granted to employees where both the exercise price is less than the average market price of the Company's shares during the year and any related performance conditions have been met.

 

8          Dividends

 

£ millions	2014/15	2013/14
Dividends to equity shareholders of the Company
Special interim dividend of 4.2p per share paid 25 July 2014	100	-
Ordinary interim dividend for the year ended 31 January 2015 of 3.15p per share (1 February 2014: 3.12p per share)	75	74
Ordinary final dividend for the year ended 1 February 2014 of 6.78p per share (2 February 2013: 6.37p per share)	159	150
	334	224

 

The proposed final dividend for the year ended 31 January 2015 of 6.85p per share is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability.

 9            Post-employment benefits

 

	2014/15			2013/14
£ millions	UK	Overseas	Total	UK	Overseas	Total
Net (deficit)/surplus in schemes at beginning of year	(29)	(71)	(100)	71	(71)	-
Current service cost	(2)	(7)	(9)	(2)	(7)	(9)
Administration costs	(3)	-	(3)	(3)	-	(3)
Curtailment gain	-	9	9	-	-	-
Net interest (expense)/income	(1)	(2)	(3)	4	(2)	2
Net actuarial gains /(losses)	194	(19)	175	(131)	4	(127)
Contributions paid by employer	35	1	36	32	1	33
Exchange differences	-	7	7	-	4	4
Net surplus/(deficit) in schemes at end of year	194	(82)	112	(29)	(71)	(100)
Present value of defined benefit obligations	(2,606)	(97)	(2,703)	(2,135)	(92)	(2,227)
Fair value of scheme assets	2,800	15	2,815	2,106	21	2,127
Net surplus/(deficit) in schemes	194	(82)	112	(29)	(71)	(100)

 

The assumptions used in calculating the costs and obligations of the Group's defined benefit pension schemes are set by the Directors after consultation with independent professionally qualified actuaries. The assumptions are based on the conditions at the time and changes in these assumptions can lead to significant movements in the estimated obligations, as illustrated in the sensitivity analysis.

 

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

 

Annual % rate	2014/15	2013/14
Discount rate	3.0	4.4
Price inflation	2.8	3.3
Rate of pension increases	2.7	3.1

 

For the UK scheme, the mortality assumptions used in the actuarial valuations have been selected with regard to the characteristics and experience of the membership of the scheme from 2010 to 2013. The assumptions for life expectancy of UK scheme members are as follows:

 

Years			2014/15	2013/14
Age to which current pensioners are expected to live (60 now)
- Male			86.7	86.7
- Female			87.3	87.3
Age to which future pensioners are expected to live (60 in 15 years' time)
- Male			87.4	87.4
- Female			88.6	88.6

 

The following sensitivity analysis for the UK scheme shows the estimated impact on the obligation resulting from changes to key actuarial assumptions, whilst holding all other assumptions constant.

 

Assumption	Change in assumption	Impact on defined benefit obligation
Discount rate	Increase/decrease by 0.1%	Decrease/increase by £53m
Price inflation	Increase/decrease by 0.1%	Increase/decrease by £46m
Rate of pension increases	Increase/decrease by 0.1%	Increase/decrease by £47m
Mortality	Increase in life expectancy by one year	Increase by £94m

 

10       Cash generated by operations

 

£ millions	2014/15	2013/14
Operating profit	652	736
Share of post-tax results of joint ventures and associates	(5)	(8)
Depreciation and amortisation	262	261
Impairment losses	30	2
(Profit)/loss on disposal of property, plant and equipment, investment property and intangible assets	(20)	1
Share-based compensation charge	11	7
Increase in inventories	(150)	(31)
Decrease/(increase) in trade and other receivables	12	(60)
Increase in trade and other payables	53	118
Movement in provisions	(6)	(29)
Movement in post employment benefits	(33)	(21)
Cash generated by operations	806	976

 

11        Net cash

 

£ millions	2014/15	2013/14
Cash and cash equivalents	561	535
Bank overdrafts	(91)	(1)
Cash and cash equivalents and bank overdrafts	470	534
Short-term deposits	48	-
Bank loans	(11)	(14)
Medium Term Notes and other fixed term debt	(183)	(247)
Financing derivatives	57	27
Finance leases	(52)	(62)
Net cash	329	238
£ millions	2014/15	2013/14
Net cash at beginning of year	238	38
Net increase in cash and cash equivalents and bank overdrafts	55	153
Increase in short-term deposits	48	-
Repayment of bank loans	2	89
Repayment of Medium Term Notes and other fixed term debt	73	33
Payment/(receipt) on financing derivatives	9	(6)
Capital element of finance lease rental payments	14	13
Cash flow movement in net cash	201	282
Borrowings acquired	-	(35)
Transfers to assets held for sale (China)	(57)	-
Exchange differences and other non-cash movements	(53)	(47)
Net cash at end of year	329	238

 

12        Acquisitions and disposals

 

On 23 July 2014 Kingfisher entered into a binding agreement with the principal shareholders of Mr Bricolage to acquire their shareholdings subject to satisfactory French anti-trust clearance. This agreement made provision that it would lapse if the anti-trust clearance was not obtained by 31 March 2015 and an extension was not agreed by all parties. Subsequent to the balance sheet date, it has become clear that the anti-trust clearance will not be obtained by 31 March 2015 and therefore the July 2014 agreement will lapse on that date. Consequently the transaction will not proceed.

 

In the prior year, the Group acquired 100% of the share capital of the Bricostore Romania companies for cash consideration of £35m (along with a non-cash element of £16m) and acquired cash of £7m and borrowings of £35m.

 

The Group received proceeds of €236m (£198m) following the disposal of its 21% stake in Hornbach in March 2014.

 

On 22 December 2014, Kingfisher announced a binding agreement to sell a controlling 70% stake in its B&Q China business to Wumei Holdings Inc for a total cash consideration of £140 million. The agreement followed Kingfisher's previous announcement of its plans to look for a strategic partner to help develop its B&Q business in China. The transaction is conditional on MOFCOM (Chinese Ministry of Commerce) approval and, if approved, is expected to close during the first half of Kingfisher's 2015/16 financial year. On completion, a £12m deposit received in the current year would be repaid. As part of the terms of the transaction, Kingfisher would have the option following the second anniversary of the completion of the transaction, or sooner where agreed by both parties, to sell the remaining 30% economic interest to Wumei Holdings Inc for a fixed price of the Sterling equivalent of RMB 582m (£62m at year end exchange rate).

 

Following the announcement the B&Q China business' assets and liabilities were classified as a disposal group held for sale.