Kingfisher reports full year adjusted* pre-tax profits up 4.1% to £744 million.

Full year dividend up 5% and

announcing a multi-year capital return programme in 2014/15.

Group Financial Summary			% Total Change		% Total Change	% LFL* Change
	2013/14	2012/13	Reported	Constant currency		Constant currency
Sales*	£11,125m	£10,573m	+5.2%		+3.5%⁽¹⁾	+0.7%
Retail profit*⁽²⁾	£805m	£778m	+3.5%		+0.7%⁽¹⁾
Adjusted* pre-tax profit	£744m	£715m	+4.1%
Adjusted basic EPS	23.4p	22.3p	+4.9%
Interim dividend	3.12p	3.09p	+1.0%
Final dividend	6.78p	6.37p	+6.4%
Full year dividend	9.9p	9.46p	+4.7%
Net cash*	£238m	£38m	n/a

hroughout this release '*' indicates first instance of a term defined or explained in the glossary in Section 5 of this release.

(1) On a 52 week basis*

(2) 2012/13 comparatives restated by £3m in the UK & Ireland division to reflect reclassification of pension administrative expenses from finance costs to retail profit, as per the amended IAS 19

2013/14 Highlights

· Good progress in tough environment

o Extremely challenging Q1, remainder of year more encouraging, except for persistent weak economic backdrop in France*

o Reported adjusted PBT up 4.1% and stronger underlying progress

· Market share growth in France, UK and Poland

· Grown Economic Profit (KEP*) to £74m

· Strong free cash flow* generation of £559m after capital expenditure

· Exceptional accounting gain of £131m principally relating to the successful resolution of the Kesa demerger French tax case

· 'Creating the Leader' programme continues to progress, on-going self-help initiatives supporting short-term performance whilst positioning the business for future growth

· B&Q UK & Ireland's accelerated evolution now underway, led by strengthened team

2014/15 New Developments

· A multi-year programme of additional capital returns to shareholders, starting with around £200m during the financial year 2014/15

· Two new country entries planned. Two Brico Dépôt stores to open in Portugal and four Screwfix outlets to open in Germany with full next day national delivery

o Combined investment impact on 2014/15 profit will be a net charge of around £10m

· Disposal agreed on 24 March 2014 of the entire 21.2% stake in Hornbach for approximately £195m following a review of this strategic investment

· Intention to look for a strategic partner for B&Q China (to replicate the successful partner approach in Turkey)

Statutory reporting	2013/14	2012/13	Reported Change
Profit before taxation	£759m	£691m	+9.8%
Profit for the year	£710m	£564m	+25.9%
Basic EPS	30.0p	24.1p	+24.5%

Note: A reconciliation to adjusted measures above is set out in the Financial Review (Section 4).

Kingfisher's Group Chief Executive, Sir Ian Cheshire, said;

"We finish a challenging year in good shape, with our self-help programme meaning we have grown profit and economic return, improved our balance sheet strength whilst also investing in lower prices for our customers and improved convenience. The economic backdrop was generally soft across Europe for much of the year, particularly in France, our most significant market.

"Looking ahead we are well placed to benefit from a pick-up in consumer spending as Europe's economies return to growth. Our prospects remain bright, giving us confidence to invest in the business and actively manage our portfolio, including expanding into new markets, whilst also commencing a programme of returning surplus capital to our shareholders, alongside the healthy annual dividend."

Enquiries:

Ian Harding, Group Communications Director	020 7644 1029

Sarah Levy, Director of Investor Relations	020 7644 1032

Nigel Cope, Head of Media Relations	020 7644 1030

Matt Duffy, Investor Relations Manager	020 7644 1082

Clare Feast, Media Relations Manager	020 7644 1286

Brunswick	020 7404 5959

Further copies of this announcement can be downloaded from www.kingfisher.com or

viewed on the Kingfisher IR iPad App available for free at the Apple App store. Video

interviews with Sir Ian Cheshire (Group Chief Executive) and Karen Witts (Group Finance

Director) are also available on the website and we can be followed on twitter

@kingfisherplc.

Kingfisher American Depository Receipts are traded in the US on the OTCQX platform:

(OTCQX: KGFHY)

http://www.otcmarkets.com/stock/KGFHY/quote

Company Profile

Kingfisher plc is Europe's leading home improvement retail group and the third largest in

the world, with 1,124 stores in nine countries in Europe and Asia. Its main retail brands are

B&Q, Castorama, Brico Dépôt and Screwfix. Kingfisher also operates the Koçtaş brand, a

50% joint venture in Turkey with the Koç Group.

The remainder of this release is broken down into five main sections:

1) 'Creating the Leader' update

2) Trading review by major geography

3) 2013/14 Summary data by geography

4) Financial Review and, in part 2 of this release, the preliminary Financial Statements

5) Glossary

Section 1: 'CREATING THE LEADER' UPDATE

Our unique contribution as a business to our customers is that we can harness our home improvement experience, our heritage as a leader in sustainability and our international scale to bring new, more sustainable and more affordable products to market. By also providing our customers with project advice and new shopping channels to complement our stores we will make it easier for them to adapt their homes to their evolving lifestyles. Our shorthand for describing this purpose is "Better Homes, Better Lives" and the programme of self-help initiatives to achieve this purpose is called 'Creating the Leader'.

'Creating the Leader' 2013/14 progress and key priorities for 2014/15

In March 2012, we set out four areas (Easier, Common, Expand and One Team) with eight specific steps that make up 'Creating the Leader' along with their associated key success measures and short-term annual milestones. Today we update on the progress we have made towards each of the 2013/14 milestones set last year. Going forward from 2014/15, we are replacing the longer list of detailed milestones in favour of a summarised version that better highlights the key wider Group priorities, within the 'Creating the Leader' framework:

Progress against 2013/14 milestones:

EASIER

Emphasise our affordability credentials

· Launched 'handy prices' marketing campaign in B&Q

· Invested in pricing in Castorama France & Poland

· Rolled out Brico Dépôt 'back to basics' marketing campaign

· Extended Brico Dépôt France & Spain programme of 'arrivages' (one off special buys) to Turkey & Poland

· Launched UK Enterprise Finance Guarantee scheme for tradesmen

Extend our omnichannel* offer

· Upgraded B&Q on-line offer (www.diy.com), including 20,000 extra products for home delivery (using Screwfix omnichannel infrastructure)

· Work to extend TradePoint* website to main shop floor categories e.g. kitchens, continues

· Launched upgraded websites in Turkey, China, Brico Dépôt France & Spain (work to extend Poland website continues)

· Trialled 'click & collect' in Castorama France & Turkey

COMMON

Product:

· Launched new energy-efficiency 'iQE' Group brand

· Extended common* paint ranges

o Rolled out 'Colours' Group own-brand paint into Russia & Spain

o Commenced roll out of new 'Colours' own-brand emulsion paint range across B&Q UK (in 120 stores) & Castorama France (completed)

o Launched exclusive 'Valspar' paint mixing desk into B&Q UK & Ireland (now in 120 stores) & China

· Launch of 'Site' work wear into Brico Dépôt now planned during 2014/15 following 'arrivage' (one-off special buys) trial during 2013/14

· Held inaugural European product show, attended by 6,000 store & buying colleagues from the UK & France

· Achieved 9% common (up from 8% last year) and 20% direct sourcing (up from 19% last year) reflecting a re-emphasis of quality over quantity

· Extended French common supplier contracts to the wider Castorama & Brico Dépôt brands division

Efficiency:

· Upweighted distribution and cross docking capability in Poland, Spain & Turkey

· SG&A (selling, general & administrative expenses) optimisation from media buying programmes across the UK & France. Achieved c. £40m total savings from Group SG&A initiatives since the start of 'Creating the Leader'

· Extended Brico Dépôt shelf-ready packaging. Now at 32%, up from 20% in 2012/13

· Rolled out France & Spain all-staff bonus programmes to Poland (linked to individual store sales & profit growth)

· Undertook IT process mapping analysis at Castorama France in readiness for Group-wide IT programme

EXPAND

· Opened 84 net new stores: UK 62 (principally Screwfix outlets), France 7, Poland 2, Russia 1, Spain 4, Turkey 8 (including 4 'Koçtaş Fix' outlets), representing 3% space growth

· Bought 15 stores in Romania which contributed an additional 2% space growth. In total, Group space growth was 5%

· Revamped and extended 4 Castorama France stores

· Evaluated Screwfix international opportunities, announcing a 4 store pilot in Germany in Summer 2014 and launch of country-wide website with next day delivery

· B&Q UK store rightsizing update

o First freehold store deal completed with a grocer last year

§ Store reduced in size by 50%; sales density improvement of 75%

§ Non-operational space sold to grocer in February 2014 at a good return for £32 million

o Additional store has received planning permission and seeking planning permission for another 16

ONE TEAM

2013/14 progress

· Continued to extend the Kingfisher One Academy

· Published first 'Net Positive' report and appointed Richard Gillies from M&S as Group Sustainability Director, to lead 'Net Positive' agenda

· Over 1,400 Kingfisher employees shared an estimated gain of £10 million following the maturity of the Sharesave scheme in December 2013

Key priorities for 2014/15:

EASIER

· Extend omnichannel capabilities across the Group

COMMON

· Extend sourcing programmes (e.g. new cross-Group MacAllister power and hand tools and Blooma BBQs)

· Start four year Group-wide IT programme, consistent with our on-going capital expenditure plans

EXPAND

· Organic space growth of 2% (71 net new stores, of which 54 are Screwfix outlets) including

o 2 store new country entry into Portugal with Brico Dépôt

o Launch of Screwfix pilot in Germany incorporating 4 outlets and a website for country-wide next day delivery

o Combined investment impact of these new country entries on 2014/15 profit will be a net charge of £10 million

· Actively managing the portfolio

o Complete the disposal of Hornbach

o Look for strategic partner for B&Q China now that the business is stable with core business broadly break even

· Continue to capitalise on consolidation opportunities (as we did in Romania)

o Continue with rebranding of recently acquired Bricostore Romania stores under the Brico Dépôt banner

ONE TEAM

· People

o Increased focus on talent management

o Continue to develop Kingfisher One Academy with new programmes

· Net Positive

o Establish processes to accelerate Net Positive innovation and to apply what we learn across the Group

o Further integrate Net Positive into our Operating Company business plans

Section 2: TRADING REVIEW BY MAJOR GEOGRAPHY

FRANCE

Sales £m

2013/14

2012/13

% Total Change

Reported

% Total

Change

Constant currency

% LFL

Change

France

4,423

4,194

+5.5%

+0.8%

(1.2)%

Retail profit £m

2013/14

2012/13

% Change

Reported

% Change Constant currency

France

396

397

(0.4)%

(4.7)%

All trading commentary below is in constant currencies

Kingfisher France

Kingfisher France sales grew by 0.8% (-1.2% LFL) to £4,423 million in soft markets impacted by weak consumer confidence. Across the two businesses, seven net new stores were opened and four were revamped, adding around 4% new space.

Gross margins were down 30 basis points, with on-going self-help initiatives offset by higher price promotional activity across both businesses. Continued focus on cost control, including lower levels of variable pay, resulted in retail profit down 4.7% compared to last year.

Castorama total sales grew by 2.3% (+0.5% LFL) to £2,469 million. According to Banque de France data^*, sales for the home improvement market were down 1.%. Castorama benefited from its innovative 'Do-it-Smart' approach aimed at making home improvement projects easier for customers. LFL sales of indoor products were up around 1% with sales of new kitchen, bathroom and storage ranges performing particularly well. Sales of outdoor seasonal products were down around 1%.

Brico Dépôt total sales declined by 1.0% (-3.0% LFL) to £1,954 million. According to Kingfisher estimates, sales for the comparable market^*, which more specifically targets trade professionals and heavy DIYers, were down around 2%. Brico Dépôt benefited from self-help initiatives which continued to progress well. These included new ranges introduced last year (e.g. kitchen, bathroom and power tool ranges) and more 'arrivages' (rolling one-off special buys), reinforcing Brico Dépôt's value credentials.

UK & IRELAND*

Sales £m

2013/14

2012/13

% Total Change

Reported

% Total Change

Constant currency

52 week basis

% LFL

Change

UK & Ireland

4,363

4,316

+1.0%

+2.7%

+1.1%

Retail profit £m

2013/14

2012/13

% Change

Reported

% Change Constant currency

UK & Ireland

238

231

+3.3%

+3.4%

All trading commentary below is in constant currencies and % movements on a 52 week basis.

Note: 2012/13 retail profit comparatives restated by £3m to reflect reclassification of pension administrative expenses from finance costs to retail profit, as per the amended IAS 19.

Kingfisher UK & Ireland

Kingfisher UK & Ireland total sales were up 2.7% (+1.1% LFL) to £4,363 million supported by a strong performance from Screwfix and encouraging early signs in the smaller tradesman market, offset by a slower underlying retail market.

Kingfisher UK & Ireland delivered retail profit growth of 3.4% to £238 million. Gross margins were up 10 basis points with the benefits from on-going self-help initiatives offset by investment in pricing across both businesses. A strong focus on operating cost efficiencies continued.

B&Q UK & Ireland'stotal sales were up 0.4% (+0.1% LFL) to £3,698 million. Sales of outdoor products were up around 2%. Sales of indoor products were down around 1%. TradePoint continues to progress with sales up around 7% compared to last year.

In Ireland, following the conclusion of the Examinership process in May 2013, one store was closed and significant rent reductions achieved across the remaining stores. The business returned to break even in H2.

The market for the UK's leading home improvement retailers* was up 3.8%, including seasonal ranges up 5.0%, following record adverse weather last year. On a comparable basis, B&Q UK & Ireland sales were up 1.7% and including Screwfix, up 4.1%.

Strengthened management team

B&Q is a strong brand with the market leading position in the attractive UK home improvement market. Despite a very challenging housing and economic backdrop for the last six years, during which its market declined around 12%⁽¹⁾, Kingfisher UK & Ireland delivered broadly flat sales and achieved profit growth of 50% by exploiting the UK trade market opportunity, delivering a number of self-help initiatives whilst continuing to invest in B&Q's stores and infrastructure. Looking ahead, its customers and market are evolving very quickly and B&Q UK & Ireland has set about redoubling its efforts to achieve future growth and continued success.

In October 2013, Kevin O'Byrne, an executive director of Kingfisher plc, assumed direct leadership of B&Q UK & Ireland. He subsequently further strengthened the B&Q UK & Ireland board with the appointment of three executives from the fast growing, highly successful Screwfix business (Steve Willett, previously Screwfix CEO; David Lowther, Supply Chain; and Guy Eccles, HR) and the appointment of two senior executives from outside Kingfisher (Chris Moss as Marketing Director, formerly Virgin, Orange and 118 118; and more recently Darren Blackhurst as Commercial Director, formerly Tesco, Asda and Matalan).

This significantly strengthened management team has made an encouraging early start, working towards two key aims:

1. Re-energising the business. Examples of priorities include improving store navigation and customer communication, and driving footfall with better targeted marketing.

2. Simplifying the business and growing sales and economic profit to make it more agile in the market place and more efficient. Examples of priorities include delivering a seamless and efficient omnichannel experience for customers, optimising the store footprint, reducing complexity in the end to end supply chain thereby reducing costs to support lower prices, and undertaking a detailed review of all the 19 categories across our stores focusing on customer needs and business models.

Screwfix grew total sales by 17.6% (+7.3% LFL) to £665 million, benefiting from a strong promotional programme, extended opening hours, the continued roll out of new outlets and the successful introduction of a mobile 'Click, Pay & Collect' offer last year. Sixty outlets were opened, taking the total to 335.

The market for the smaller tradesmen* was up around 2%.

(1) As per Kingfisher estimates - BCG commissioned report

OTHER INTERNATIONAL*

Sales £m

2013/14

2012/13

% Total Change

Reported

% Total

Change

Constant currency

% LFL

Change

Other International

2,339

2,063

+13.3%

+10.5%

+3.4%

Retail profit £m

2013/14

2012/13

% Change

Reported

% Change Constant currency

Other International

171

150

+14.2%

+11.4%

All trading commentary below is in constant currencies

Other International total sales increased by 10.5% (+3.4% LFL) to £2,339 million driven by the acquisition of Romania, LFL growth in Poland, Russia and China and new store openings. Retail profit increased by 11.4% to £171 million primarily driven by Poland.

During the year 15 net new stores were opened, two in Poland, one in Russia, four in Spain and eight in Turkey⁽¹⁾. Including the acquisition of 15 additional stores in Romania in Q2, 17% net new space was added compared to last year.

Sales in Poland were up 3.9% (+1.2% LFL) to £1,109 million reflecting new store openings. Gross margins were up 60 basis points with self-help initiatives more than offsetting investment in pricing which annualised during Q2. Productivity initiatives largely offset cost inflation resulting in a 10.9% increase in retail profit to £123 million.

In Russia sales grew by 9.2% (+8.0% LFL) to £453 million benefiting from new store openings. LFL sales were up 10.5% in H1 though slower in H2 (+5.8% LFL). Retail profit was £15 million (2012/13: £16 million reported retail profit) reflecting higher pre-opening and advertising costs compared to last year. In Turkey, Kingfisher's 50% JV, Koçtaş, grew sales by 8.0% (+5.0% LFL) to £332 million reflecting new store openings. Retail profit contribution was up 24.4% to £11 million.

Brico Dépôt Spain sales grew by 16.4% (-3.1% LFL) to £284 million reflecting new store openings offset by a difficult market. Retail profit was £1 million (2012/13: £1 million reported retail profit). Bricostore Romania, acquired in Q2, contributed sales of £72 million and retail profit of £1 million.

Hornbach, in which Kingfisher had a 21% economic interest⁽²⁾, contributed £26 million to retail profit (2012/13: £26 million reported retail profit).

B&Q China sales increased by 8.0% (+8.7% LFL) to £421 million benefiting from additional promotional activity. The retail loss was £6 million (2012/13: £9 million reported loss) largely relating to costs on the new format store trial which opened in March 2013.

(1) Including four Koçtaş 'Fix' outlets

(2) Following the disposal of the Group's unlisted shares in Hornbach, going forward the Group will no longer record its share of Hornbach's results within retail profit

Section 3: SUMMARY DATA BY GEOGRAPHY

As at 1 February 2014	Store numbers	Selling space (000s m2)	Employees (FTE)
Castorama	105	1,118	11,322
Brico Dépôt	109	608	6,875
France	214	1,726	18,197
B&Q UK & Ireland	360	2,570	21,146
Screwfix	335	23	4,375
UK & Ireland	695	2,593	25,521
Poland	72	529	10,197
China	39	319	3,997
Romania	15	156	1,037
Russia	20	185	2,648
Spain	24	142	1,371
Turkey JV	45	216	3,333
Other International	215	1,547	22,583
Total Group	1,124	5,866	66,301

Full year 2013/14	Sales	% Total Change	% Total Change	% LFL Change
	£m 2013/14	Reported	Constant currency 52 week basis	Constant currency

Castorama	2,469	+7.0%	+2.3%	+0.5%
Brico Dépôt	1,954	+3.6%	(1.0)%	(3.0)%
France	4,423	+5.5%	+0.8%	(1.2)%
B&Q UK & Ireland	3,698	(1.1)%	+0.4%	+0.1%
Screwfix	665	+15.2%	+17.6%	+7.3%
UK & Ireland	4,363	+1.1%	+2.7%	+1.1%
Poland	1,109	+7.7%	+3.9%	+1.2%
China	421	+12.4%	+8.0%	+8.7%
Russia	453	+6.3%	+9.2%	+8.0%
Romania⁽¹⁾	72	n/a	n/a	n/a
Spain	284	+21.7%	+16.4%	(3.1)%
Other International	2,339	+13.3%	+10.5%	+3.4%
Total Group	11,125	+5.2%	+3.5%	+0.7%

⁽¹⁾Represents seven months trading since acquisition

Full year 2013/14	Retail Profit	% Total Change	% Total Change	Operating Margin %	Operating Margin %
	£m 2013/14	Reported	Constant Currency	2013/14	2012/13
France	396	(0.4)%	(4.7)%	8.9%	9.5%
UK & Ireland⁽¹⁾	238	+3.3%	+3.4%	5.5%	5.3%
Poland	123	+15.0%	+10.9%	11.1%	10.4%
China	(6)	+40.1%	+42.4%	(1.3)%	(2.4)%
Hornbach	26	+0.9%	(3.6)%	n/a⁽²⁾	n/a⁽²⁾
Romania⁽³⁾	1	n/a	n/a	0.9%	n/a
Russia	15	(9.2)%	(6.7)%	3.3%	3.8%
Spain	1	+91.0%	+82.6%	0.5%	0.4%
Turkey JV	11	+16.0%	+24.4%	n/a⁽²⁾	n/a⁽²⁾
Other International	171	+14.2%	+11.4%	7.3%	7.3%
Total Group⁽¹⁾	805	+3.5%	+0.7%	7.2%	7.4%

⁽¹⁾2012/13 retail profit comparatives restated by £3m to reflect reclassification of pension administrative expenses from finance costs to retail profit, as per the amended IAS 19.

⁽²⁾Joint Venture (Koçtaş JV) and Associate (Hornbach) sales are not consolidated therefore not applicable.

⁽³⁾Represents seven months trading since acquisition

Year to date average FX rates vs £ Sterling
	2013/14	2012/13
Euro	1.18	1.23
Polish Zloty	4.95	5.13
Chinese Renminbi	9.62	10.01
Romanian Leu	5.27	n/a
Russian Rouble	50.49	49.17
Turkish Lira	3.05	2.85

FOURTH QUARTER BY MAJOR GEOGRAPHY - 13 weeks ended 1 February 2014

	Sales	% Total Change	% Total Change	% LFL Change	Retail Profit	% Total Change	% Total Change
	2013/14 £m	Reported	Constant currency 13 week basis^*	Constant currency	2013/14 £m	Reported	Constant currency

France	944	+4.1%	+2.4%	+0.3%	65	(1.9)%	(2.3)%
UK & Ireland	998	+0.1%	+7.9%	+5.3%	34	+17.5%	+17.5%
Other International	546	+12.1%	+13.9%	+5.3%	41	+64.3%	+69.0%
Total Group	2,488	+4.1%	+7.0%	+3.3%	140	+16.8%	+17.2%

Data tables for the full year are available for download in excel format at http://www.kingfisher.com/index.asp?pageide=59.

Section 4: FINANCIAL REVIEW

A summary of the reported financial results for the year ended 1 February 2014 is set out below:

	2013/14	2012/13	Increase

Sales	£11,125m	£10,573m	+5.2%

Adjusted pre-tax profit	£744m	£715m	+4.1%

Profit before taxation after exceptional items	£759m	£691m	+9.8%

Adjusted basic earnings per share	23.4p	22.3p	+4.9%

Dividends	9.9p	9.46p	+4.7%

A reconciliation of statutory profit to adjusted profit is set out below:

	2013/14 £m	2012/13 £m	Increase

Profit before taxation	759	691	+9.8%
Exceptional items	(17)	26
Profit before exceptional items and taxation	742	717	+3.5%
Financing fair value remeasurements (FFVR*)	2	(2)
Adjusted pre-tax profit	744	715	+4.1%

Profit and EPS including all exceptional items for the year ended 1 February 2014 are set out below:

	2013/14	2012/13	Increase
			2
Profit after tax	£710m	£564m	+25.9%

Basic EPS	30.0p	24.1p	+24.5%

Overview

Statutory profit after tax increased by 25.9% in the year to £710 million. The statutory results for the year have benefited significantly from exceptional items which add £17 million to profit before tax, £131 million to profit after tax and 5.5p to basic earnings per share. For comparative purposes adjusted measures are therefore presented. The exceptional items are detailed further below.

The Group's financial reporting year ends on the nearest Saturday to 31 January. The current year is for the 52 weeks ended 1 February 2014 with the comparative financial year being for the 53 weeks ended 2 February 2013. This only impacts the UK & Ireland businesses with all of the other businesses reporting on a calendar basis as a result of local requirements. The effect of the 53^rd week on the prior year results of the Group is the inclusion of an additional £72 million sales and an immaterial benefit to retail profit.

Total sales grew by 3.5% on a constant currency 52 week basis and increased by 5.2% to £11.1 billion (2012/13: £10.6 billion) on a reported rate basis. On a like-for-like basis, Group sales were up 0.7%. During the year, a net additional 91 new stores were opened, including 60 Screwfix outlets and 15 acquired stores in Romania, taking the store network to 1,079 stores (excluding 45 Turkey JV stores).

Retail profit before exceptional items increased by £27 million to £805 million (2012/13 restated: £778 million), including a £24 million favourable foreign exchange movement representing a 0.7% increase on a constant currency basis.

The net interest income for the year was £23 million, compared with a restated prior year charge of £1 million. A breakdown of this is shown below.

	2013/14 £m	2012/13 (restated) £m
Underlying net interest	(2)	(3)
FFVR	(2)	2
Exceptional items	27	-
Statutory net interest	23	(1)

The principal movement in net interest is driven by the release of a £27 million exceptional repayment supplement provision on the Kesa demerger French tax case (see exceptional items below).

Profit before tax increased by 9.8% to £759 million. After removing the impact of exceptional items and fair value remeasurements, adjusted pre-tax profit grew by 4.1% to £744 million. Profit after tax for the period was £710 million (2012/13: £564 million). This resulted in the Group recording a basic EPS of 30.0p in the year (2012/13: 24.1p).

Taxation

The effective corporation tax rate, excluding exceptional and prior year items is 26% this year compared with 27% in 2012/13. The overall rate of tax includes the impact of exceptional items and prior year adjustments. The impact of such items reduced the rate from 26% to 6% (2012/13: 18%) reflecting the positive decision in the Kesa demerger French tax case (see exceptional items below), the impact on deferred taxes of the further 3% fall in the UK rate and the release of prior year provisions either reassessed or time expired.

Kingfisher's effective tax rate is sensitive to the blend of tax rates and profits in the Group's various jurisdictions. The adjusted effective rate of tax, calculated on profit before exceptional items, prior year tax adjustments and the impact of rate changes is 26% (2012/13: 27%). This is higher than the UK statutory rate because of the amount of Group profit that is earned in higher tax jurisdictions and because no future benefit is assumed for losses incurred in overseas jurisdictions such as China.

Effective tax rate calculation	Profit £m	Tax £m	2013/14 %	2012/13 %
Profit before tax and tax thereon	759	49	6	18
Exceptional items	(17)	114
Prior year items and rate changes	-	27
Total - adjusted	742	190	26	27

The effective rate of tax is lower than in 2012/13 as a result of the mix of profits and tax rate changes in some of the countries in which we operate. The most significant rate changes in 2013/14 were the UK statutory tax rate falling from 24% to 23% regarding current year profits and from 23% to 20% regarding deferred tax, offset by an increase in the French tax rate from 36% to 38%.

The tax rates for this financial year and the expected rates for next year are as follows:

Jurisdiction	Statutory tax rate 2014/15	Statutory tax rate 2013/14
UK	21%	23%
France	34.4% - 38.0%	34.4% - 38.0%
Poland	19%	19%
Rest of Europe	0% - 34%	0% - 34%
Asia	16.5% - 25%	16.5% - 25%

Tax contribution

Kingfisher makes a significant economic contribution to the countries in which it operates. In 2013/14 it contributed £1.71 billion in taxes it both pays and collects for these Governments. The Group pays tax on its profits, its properties, in employing 79,000 people, in environmental levies, in customs duties and levies as well as other local taxes. The most significant taxes it collects for governments are the sales taxes charged to its customers on their purchases (VAT) and employee payroll related taxes. Taxes paid and collected together represent Kingfisher's total tax contribution which is shown below:

Total taxes paid as a result of Group operations	2013/14 £bn	2012/13 £bn
Taxes borne	0.74	0.70
Taxes collected	0.97	0.90
Total tax contribution	1.71	1.60

Kingfisher participates in the Total Tax Contribution survey that PwC perform for the Hundred Group of Finance Directors. The 2013 survey ranked Kingfisher 31^st for its Total Tax Contribution in the UK. In 2013, 101 companies contributed to the survey.

Exceptional items

	2013/14 £m Gain/(charge)	2012/13 £m (Charge)/gain
Kesa demerger French tax case - repayment supplement Net impairment of investment in Hornbach Acquisition and integration costs Ireland restructuring	27 (14) (5) 7	- - - (21)
UK restructuring	-	(16)
Net pension gain	-	11
Gain on disposal of properties	2	-
	17	(26)
Tax on exceptional items	(4)	1
Kesa demerger French tax case	118	-
Net exceptional items	131	(25)

In the year the Group booked net post-tax exceptional income of £131 million (2012/13: £25 million charge).

Kingfisher paid €138 million tax to the French tax authorities in the year ended 31 January 2004 as a consequence of the Kesa Electricals demerger and recorded this as an exceptional tax charge. Following a successful appeal Kingfisher received a refund totalling €169 million from the French tax authorities in September 2009. The French tax authorities appealed this decision with the final level of court finding in Kingfisher's favour in July 2013. This decision removed any uncertainty over the position and resulted in an exceptional credit of £145 million (€169 million), of which £27 million has been recognised in interest and £118 million in taxation.

In 2013/14 Kingfisher acquired Bricostore in Romania and announced its intention to pilot four Screwfix outlets in Germany in 2014. At the same time Kingfisher undertook a review of its strategic investment in Hornbach, which has operations in both of these markets. On 31 January 2014 the Group decided to divest its equity stake in Hornbach and also waive its right to appoint directors to the Hornbach board.

This decision has impacted the 2013/14 financial statements by changing the basis on which the Group accounts for its shareholding, resulting in a net £14 million exceptional loss with the investment being impaired to its market value of £198 million and reclassified as an asset held for sale. In 2013/14 the Group recorded a £14 million pre-exceptional profit in relation to its share of Hornbach's results, comprising £26 million of retail profit less £12 million share of interest and tax.

Following the end of the 2013/14 financial year, on 24 March 2014 Kingfisher agreed to sell all the shares it holds in Hornbach Holding AG and Hornbach-Baumarkt AG which together formed its 21.2% stake in Hornbach, for approximately £195 million. The stakes in the listed Hornbach Holding preference shares and Hornbach Baumarkt have been sold to international institutional investors in an 'accelerated bookbuilding' by Berenberg Bank. The Hornbach family have agreed to buy the non-listed ordinary shares in Hornbach Holding AG.

Acquisition and integration costs of £5 million principally comprise costs of acquiring and integrating the Bricostore Romania business.

The current year also includes an exceptional credit of £7 million for Ireland restructuring, reflecting the release of provisions recorded in January 2013 when B&Q Ireland entered into an Examinership process. Following the conclusion of this process in May 2013, only one store was closed rather than the potential of five, with over 600 jobs saved.

Earnings per share

Basic earnings per share (EPS) have increased by 24.5% to 30.0p (2012/13: 24.1p). On a more comparable basis, removing the impact of exceptional items, financing fair value remeasurements and the effect of prior year tax adjustments, adjusted basic earnings per share increased by 4.9% to 23.4p (2012/13: 22.3p).

	Earnings £m	2013/14	Earnings £m	2012/13
Basic earnings per share	709	30.0p	564	24.1p
Net exceptional items	(131)	(5.5)p	25	1.1p
Prior year tax items and rate changes	(27)	(1.1)p	(66)	(2.8)p
FFVR (net of tax)	1	-	(1)	(0.1)p
Adjusted earnings per share	552	23.4p	522	22.3p

Dividends

The Board has proposed a final dividend of 6.78p which results in a full year dividend of 9.9p, an increase of 4.7% (2012/13: 9.46p). The final dividend maintains full year dividend cover on adjusted earnings to 2.4 times (2012/13: 2.4 times).

Going forward, the Group continues to aim to move towards a medium term annual dividend cover of around 2.5 times. At this level, the Board believes the dividend will continue to be prudently covered by earnings and free cash flow and remain consistent with the capital needs of the business.

The final dividend for the year ended 1 February 2014 will be paid on 16 June 2014 to shareholders on the register at close of business on 16 May 2014, subject to approval of shareholders at the Annual General Meeting, to be held on 12 June 2014. A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to invest their dividends in the shares of the Company. The shares will go ex-dividend on 14 May 2014. For those shareholders electing to receive the DRIP the last date for receipt of electing is 23 May 2014.

Economic returns

Management are focused on Kingfisher Economic Profit (KEP) as a main measure of return on capital. It is used in the capital investment process, to assess performance and drive returns in strategic plans. KEP is derived from the concept of Economic Value Added representing earnings after a charge for the annual cost of capital employed in the business. Earnings are defined as adjusted post-tax profit, excluding interest, property lease costs and exceptional items. A charge is then deducted by applying the weighted average cost of capital (WACC) to capital employed. For the purposes of consistency both WACC and capital employed are lease adjusted. Leases are capitalised based on an estimate of their long-term property yields. In order to focus on controllable factors both WACC and long term property yields are based on those in place when KEP was introduced.

2013/14

£m

2012/13

£m

Increase

£m

Kingfisher Economic Profit (KEP)

Geographic divisional return

Kingfisher's underlying KEP by geographic division is set out below. The divisional invested capital excludes central goodwill of £2.4 billion.

	Sales £bn	Proportion of Group sales %	Invested Capital (IC) £bn	Proportion of Group IC %	Returns £m KEP
	Sales £bn	Proportion of Group sales %	Invested Capital (IC) £bn	Proportion of Group IC %	2013/14	2012/13
UK	4.4	40%	5.9	48%	17	(5)
France	4.4	40%	2.4	20%	137	150
Other International	2.3	20%	1.5	12%	46	37
Goodwill & Central			2.4	20%	(126)	(138)
Total	11.1		12.2		74	44

Free cash flow

A reconciliation of free cash flow and cash flow movement in net cash is set out below:

	2013/14 £m	2012/13 £m (restated)
Operating profit (before exceptional items)	746	718
Other non-cash items⁽¹⁾	265	264
Change in working capital	27	(178)
Pensions and provisions (before exceptional items)	(37)	(42)
Operating cash flow	1,001	762
Net interest paid	(8)	(4)
Tax paid	(142)	(129)
Gross capital expenditure	(304)	(316)
Disposal of assets	12	17
Free cash flow	559	330
Dividends paid	(224)	(221)
Acquisition of Bricostore Romania (including debt)	(63)	-
Other⁽²⁾	(1)	(10)
Share purchase for employee incentive schemes	(24)	-
Cash flow movement in net cash	247	99
Opening net cash/(debt)	38	(88)
Other movement including foreign exchange	(47)	27
Closing net cash	238	38

(1) Other non-cash items includes depreciation and amortisation, impairment losses, share-based compensation charge, share of post-tax results of JVs and associates, pension operating cost and profit/loss on retail disposals.

(2) Includes dividends received from JVs and associates, issue of shares and exceptional items (excluding property disposals).

Net cash at the end of the year was £238 million (2012/13: £38 million net cash).

Free cash flow of £559 million was generated in the year, an increase of £229 million year on year primarily due to the movement in working capital. This is a combination of LME* and week 53 impacts in the prior year, the reversal of a higher stock position last year ahead of an early Easter and Chinese New Year and a higher level of showroom deposits at the year end, following a solid kitchens, bedrooms & bathrooms trading strategy for B&Q UK in Q4.

During the year free cash flow generated was utilised by the dividend being increased to £224 million, the acquisition of Bricostore Romania and an additional £24 million to acquire 6 million shares to cover existing share incentive schemes, thereby avoiding dilution of current shareholders.

Capital expenditure

Gross capital expenditure for the year was £304 million (2012/13: £316 million) with a further £63 million invested on Bricostore Romania. A total of £12 million of proceeds from disposals were received during the year (2012/13: £17 million).

The Group has a rigorous approach to capital allocation and authorisation. The process includes:

· An annual strategic planning process based on detailed medium term plans for all businesses for the next three years. This process drives the key strategic capital allocation decisions and the output is reviewed by the Board;

· A capital approval process through a capital expenditure committee, attended by the Group Chief Executive, Group Finance Director, CEO Group Productivity and Development, Group Property Director and Group General Counsel. The committee is delegated to review all projects above £0.75 million and to sign-off the projects between £0.75 million and £15.0 million (including the capitalised value of lease commitments);

· Projects above £15.0 million are required to be approved by the Board. All projects above £0.75 million are notified to the Board;

· Clear investment criteria including KEP and NPV (Net Present Value) and challenging hurdle rates for IRR (Internal Rate of Return) and DPB (Discounted PayBack);

· An annual post-investment review process to undertake a full assessment of all projects above £0.75 million which were completed in the last 2 to 4 years. The findings of this exercise are considered by both the capital expenditure committee and the Board and used to inform the assumptions for similar project proposals going forward;

· An annual review of KEP by store is performed which drives plans to improve the returns of weaker stores, and develop lessons from higher returning stores.

Management of balance sheet and liquidity risk and financing

The Group finished the year with £238 million of net cash on the balance sheet. However, the Group's overall leverage is more significant when including capitalised lease debt that in accordance with accounting standards does not appear on the balance sheet. The ratio of the Group's lease adjusted net debt (capitalising leases at 8 times annual rent) to EBITDAR is 2.3 times as at the year end. At this level the Group has financial flexibility whilst retaining an efficient cost of capital.

A reconciliation of lease adjusted net debt to EBITDAR is set out below:

	2013/14 £m	2012/13 (restated) £m
EBITDA*	1,024	984
Property operating lease rentals	440	435
EBITDAR*	1,464	1,419
Financial (net cash)	(238)	(38)
Pension position	100	-
Property operating lease rentals (8x)⁽¹⁾	3,520	3,480
Lease adjusted net debt	3,382	3,442
Lease adjusted net debt to EBITDAR	2.3x	2.4x

⁽¹⁾Kingfisher believes 8x is a reasonable industry standard for estimating the economic value of its leased assets

Kingfisher aims to maintain its solid investment grade credit rating whilst investing in the business where economic returns are attractive and paying a healthy annual dividend to shareholders. After satisfying these key aims and taking into account the economic and trading outlook, any surplus capital would be returned to shareholders.

Taking all these factors into account, in addition to increasing the annual dividend by 5% (to an estimated £234 million) the Board has approved a multi-year programme of additional capital returns to shareholders, starting with around £200 million during the financial year 2014/15. At this level we will retain flexibility to continue reinvesting in the business, paying a healthy dividend and capitalising on value enhancing consolidation opportunities (as we did in Romania).

The timing and mechanism for this capital return will be kept under review to ensure we maximise value creation for our shareholders. Updates will be given with our interim and full year results.

Kingfisher regularly reviews the level of cash and debt facilities required to fund its activities. This involves preparing a prudent cash flow forecast for the next three years, determining the level of debt facilities required to fund the business, planning for repayments of debt at its maturity and identifying an appropriate amount of headroom to provide a reserve against unexpected outflows.

Kingfisher has a £200 million committed bank facility maturing in August 2016, which remained undrawn at the year end.

The terms of the US Private Placement note agreement and the committed bank facility require only that the ratio of Group operating profit, excluding exceptional items, to net interest payable must be no less than 3:1 for the preceding 12 months at half year and full year ends. At the year end the Group's ratio was significantly higher than this requirement.

The maturity profile of Kingfisher's debt is illustrated at: www.kingfisher.com/index.asp?pageid=76

Kingfisher deposits surplus cash with a number of banks with the strongest short-term credit ratings and with money market funds which have the strongest, AAA, credit rating and offer same day liquidity. A credit limit for each bank or fund is agreed by the Board covering the full value of deposits and the fair value of derivative contracts. The credit risk is reduced further by spreading the investments and derivative contracts across several counterparties. At the year end, the Group had a total of around £500 million of cash deposited with banks and in money market funds. The highest cash deposit with a single counterparty was £50 million.

The Group has entered into interest rate derivative contracts to convert the fixed rate payable on its bonds and US Private Placement notes to a floating rate of interest. The floating interest rates paid by the Group under its financing arrangements are based on LIBOR and EURIBOR plus a margin. The margins were not changed during the year.

Acquisitions

On 31 May 2013, the Group acquired 100% of Bricostore Romania, a home improvement business operating 15 stores including 8 freeholds. Kingfisher paid £35 million of cash consideration and acquired £7 million of cash with Bricostore Romania. In addition, debt of £35 million was acquired with the business, which was immediately settled, resulting in a total amount invested of £63 million. Goodwill of £18 million has been recognised on acquisition.

The year end results include seven month's trading of Bricostore Romania, in which it contributed sales of £72 million and a retail profit of £1 million. Since acquisition, Romania traded under its acquired brand Bricostore. In March 2014, two stores were converted into the Brico Dépôt format.

Property

The Group owns a significant property portfolio, most of which is used for trading purposes. A valuation was performed for internal purposes in November 2013 with the portfolio valued by external professional valuers. Based on this exercise, on a sale and leaseback basis with Kingfisher in occupancy, the value of property is £3.5 billion at year end (2012/13: £3.6 billion). This is compared to the net book value of £2.8 billion (2012/13: £2.9 billion) recorded in the financial statements.

Pensions

At the year end, the Group had a net deficit of £100 million (2012/13: £nil) in relation to defined benefit pension arrangements of which a £29 million deficit (2012/13: £71 million surplus) is in relation to the UK Scheme. The adverse movement is driven by UK scheme actuarial losses following the inclusion of updated membership data from the 2013 triennial funding valuation, partially offset by employer contributions in the year.

The approach used to prepare the pension valuation is in line with current market practice and international accounting standards, and has been applied consistently. This accounting valuation is very sensitive to a number of assumptions and market rates which are likely to fluctuate in the future. To aid understanding of the impact that changes to the assumptions could have on the reported UK pension position, we have included sensitivity analysis as part of the pension disclosure in note 9 of the preliminary Financial Statements. Further details of key assumptions are also contained within the note.

The Group has adopted a revised pensions accounting standard in the year. This has resulted in a reclassification of £3 million of administrative costs of running the UK scheme from interest to retail profit in both the current and prior years.

In the prior year, and following consultation with the active members, the UK final salary pension scheme was closed to future benefit accrual and replaced by an enhanced defined contribution scheme offered to all UK employees. Auto-enrolment of eligible employees into this scheme commenced in the year, with around two-thirds of all UK employees now participating.

Section 5: GLOSSARY (terms are listed in alphabetical order)

Adjusted measures are before exceptional items, financing fair value remeasurements, amortisation of acquisition intangibles, related tax items and tax on prior year items including the impact of rate changes on deferred tax. A reconciliation to statutory amounts is set out in the Financial Review (Section 4).

Banque de France data includes relocated and extended stores.

Brico Dépôt comparable market is a rolling 12 month average of Banque de France (60%) and I+C (www.iplusc.com) trade data (40%) February 2013 - January 2014.

Common means two or more operating companies selling the same product or a similar product but from the same supplier where the same product is not possible due to market / legal reasons (e.g. electrical extension cable which is the same supplier but with different electrical sockets).

Constant currency 13 week basis

In the UK & Ireland Kingfisher reports each financial year up to the nearest Saturday to 31 January. In 2012/13 this resulted in a 14 week fourth quarter.

Constant currency change 52 week basis

In the UK & Ireland Kingfisher reports each financial year up to the nearest Saturday to 31 January. In 2012/13 this resulted in a 53 week year.

EBITDA (earnings before interest, tax, depreciation and amortisation) which is calculated as Retail profit less central costs and before depreciation and amortisation.

EBITDAR (earnings before interest, tax, depreciation, amortisation and property operating lease rentals) which is calculated as Retail profit less central costs, before depreciation and amortisation and property operating lease rentals.

France consists of Castorama France and Brico Dépôt France.

Free cash flow represents cash generated from operations less the amount spent on tax, interest and capital expenditure during the year (excluding acquisitions). A reconciliation from operating profit (before exceptional items) is set out in the Financial Review (Section 4).

FFVR (financing fair value remeasurements) represents changes in the fair value of financing derivatives, excluding interest accruals, offset by fair value adjustments to the carrying value of borrowings and other hedged items under fair value hedge relationships.

KEP (Kingfisher Economic Profit) represents earnings after a charge for the annual cost of capital employed in the business. A definition is provided in the Financial Review (Section 4).

LFL stands for like-for-like sales growth which represents the constant currency, year-on-year sales growth for stores that have been open for more than a year.

LME is the legislative change shortening payment terms in France, implemented over the three years to 2012.

Market for the UK's leading home improvement retailers

Kingfisher estimate for the UK RMI (Repairs, Maintenance & Improvement) market incorporates GfK data, which includes new space but which excludes B&Q Ireland and private retailers e.g. IKEA and other smaller independents. It is on a cash sales basis and is adjusted for discounts.

Net cash comprises borrowings and financing derivatives (excluding accrued interest), less cash and cash equivalents and current other investments.

Omnichannel - allowing customers to shop with us in any way they prefer (via shops, the internet or catalogues).

Other International consists of China, Poland, Romania, Russia, Spain, Turkey (Koçtaş JV) and Hornbach in Germany.

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. 2012/13 Group and UK retail profit comparatives restated by £3 million to reflect reclassification of pension administrative expenses from finance costs to retail profit in the UK, as per the amended IAS 19.

Sales

Joint Venture (Koçtaş JV) and Associate (Hornbach) sales are not consolidated.

Smaller tradesman market

Kingfisher estimate for the UK smaller tradesman market is a weighted average incorporating 70% trade (using the most recent public data available for the big trade merchants as a proxy) and 30% DIY (using the UK RMI (Repairs, Maintenance & Improvement) GfK large chain (shed) data).

TradePoint

B&Q UK & Ireland's 'trade-only' offer.

UK & Ireland consists of B&Q in the UK & Ireland and Screwfix.

Forward-looking statements

This announcement contains certain statements that are forward-looking and which should be considered, amongst other statutory provisions, in light of the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. Such statements are, therefore, subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events. These forward-looking statements include, but are not limited to, statements relating to the Company's expectations around the Company's programme known as 'Creating the Leader' and its associated eight steps.

Forward-looking statements can be identified by the use of relevant terminology including the words: "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology and include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, changes in tax rates, liquidity, prospects, growth, strategies and the businesses we operate.

Other factors that could cause actual results to differ materially from those estimated by the forward-looking statements include, but are not limited to, global economic business conditions, monetary and interest rate policies, foreign currency exchange rates, equity and property prices, the impact of competition, inflation and deflation, changes to regulations, taxes and legislation, changes to consumer saving and spending habits; and our success in managing these factors.

Consequently, our actual future financial condition, performance and results could differ materially from the plans, goals and expectations set out in our forward-looking statements. We urge you to read our annual report and other company reports, including the risk factors contained therein, for a more detailed discussion of the factors that could affect our future performance and the industry in which we operate. Reliance should not be placed on any forward-looking statement. Our forward looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this press release should be construed as a profit forecast.