FY 2021/22 Technical guidance

The following guidance applies in the event of no adverse change in COVID-related confinement measures (for example, new lockdown restrictions resulting in store or showroom closures). Please also refer below for further details regarding forward-looking statements.

Income statement:

  • LFL sales outlook
    • H2 21/22 – planning for LFL scenarios of -7% to -3% (previously -15% to -5%), with corresponding 2-year LFLs of +9% to +13%
  • Space
    • Anticipate net space growth (excluding Russia) to impact total sales by c.+1.5%, largely from the UK and Poland
    • Total sales impact from the disposal of Russia in the prior year will be c.-1.5%
  • Central costs
    • Expected to be c.£58-60m (previous guidance ‘broadly flat year on year’; FY 20/21: £54m)
  • IT development
    • Following recent new guidance, the Group is reviewing its policy on accounting for ‘software as a service’ related IT development. Indicatively, this may result in a total charge of c.£10m in FY 21/22
  • Net finance costs
    • Expected to decrease by c.£15m as a result of lower lease liability balance and lower non-lease interest (previous guidance ‘decrease by c.£10m’; FY 20/21: £160m)
  • Adjusted pre-tax profit
    • Anticipate full year adjusted pre-tax profit in the range of c.£910m to £950m
  • Tax rate
    • Group adjusted effective tax rate* expected to be c.22%(1) (previous guidance c.23%; FY 20/21: 23%)

Cash flow:

  • Working capital – anticipate temporary working capital benefits from prior year to continue reversing in H2, related to inventory rebuild and reversal of creditor positions
  • Capital expenditure – continue to target gross capex of up to 3.5% of total sales, including c.£70m of capex deferred from FY 20/21 (FY 20/21: £281m; FY 19/20: £342m)
  • Tax – as anticipated, in H1 21/22 we paid c.£64m (including interest) to HMRC in relation to the EC state aid challenge. The full amount is being contested and is recorded as a receivable
  • Share buyback – £300m to be returned to shareholders via a share buyback programme; to commence soon
  • Dividends – dividend policy target cover range of 2.25 to 2.75 times, based on adjusted basic earnings per share; cover may move above this range in FY 21/22

(1) Subject to the blend of profit within the Group’s various jurisdictions.

Information correct as at 21 September 2021.

Forward-looking statements

You are not to construe the content of the information above as investment, legal or tax advice and you should make your own evaluation of the Company and the market. If you are in any doubt about the contents of the information above or the action you should take, you should consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (or if you are a person outside the UK, otherwise duly qualified in your jurisdiction).

This information has been prepared in relation to the financial results for the six months ended 31 July 2021. The financial information referenced in the information above is not audited and does not contain sufficient detail to allow a full understanding of the results of the Group. Nothing in this information should be construed as either an offer or invitation to sell or any offering of securities or any invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Group or an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (as amended).

Certain information may constitute "forward-looking statements" (including within the meaning of the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995), which can be identified by the use of terms such as "may", "will", "would", "could", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "plan", "goal", "aim" or "believe" (or the negatives thereof) or other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations and those of our Officers, Directors and employees concerning, amongst other things, the Company's results of operations, financial condition, changes in global or regional trade conditions, changes in tax rates, changes to customer preferences, liquidity, prospects, growth and strategies, acts of war or terrorism worldwide, work stoppages, slowdowns or strikes, public health crises, outbreaks of contagious disease, environmental disruption or political volatility. By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties that could cause actual events or results or actual performance of the Company to differ materially from those reflected or contemplated in such forward-looking statements. For further information regarding risks to Kingfisher's business, please consult the risk management section of the Company's Annual Report (as published). No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements.

The Company does not undertake any obligation to update or revise any forward-looking statement to reflect any new information, change in circumstances, or change in the Company's expectations.