Final Results - Part 2

Marks & Spencer PLC
23 May 2000


PART 2


Consolidated profit and loss account
                               53 weeks ended              52 weeks ended 
                                 1 April 2000               27 March 1999
                       (1)     (2)        (3)         (1)      (2)      (3)
                        £m      £m        £m         £m       £m       £m
                                                                  
Turnover 
(see note 2)       8,195.5       -   8,195.5    8,224.0       -    8,224.0

Operating 
profit (see 
note 3)              543.0  (72.0)     471.0     600.5      (88.5)   512.0
 
                                                                  
Loss on termination of Canadian operation(see note6):

Losses arising on 
closure                -   (21.0)     (21.0)        -          -        -

Goodwill 
previously written     
off to reserves        -   (24.4)     (24.4)        -          -        -
                       -   (45.4)     (45.4)        -          -        -     
      
                                 
                                                                  
(Loss)/profit on 
sale of fixed assets 
(see note 7)           -    (22.3)    (22.3)        -          6.2      6.2

Net interest income 
(see note 4)        14.2        -      14.2      27.9            -     27.9

Profit on ordinary                    
activities before 
taxation           557.2  (139.7)    417.5      628.4       (82.3)    546.1

Taxation on 
ordinary         
activities       (177.2)    19.0   (158.2)    (183.7)         7.6   (176.1)

Profit on 
ordinary                  
activities 
after taxation    380.0  (120.7)    259.3      444.7        (74.7)   370.0

Minority 
interests
(all equity)      (0.6)       -     (0.6)        2.1            -     2.1

Profit 
attributable to  
shareholders     379.4   (120.7)   258.7        446.8       (74.7)   372.1    


Dividends 
(see note 10)   (258.6)       -   (258.6)      (413.3)          -   (413.3)
                                
Retained 
profit/(loss) 
for the year     120.8  (120.7)      0.1         33.5      (74.7)    (41.2)
                                                              
                                                              
                                                              
Earnings per share 
(see note 9)                        9.0p                              13.0p

Fully diluted earnings 
per share 
(see note 9)                        9.0p                              12.9p

Adjusted earnings 
per share              
(see note 9)                       13.2p                             15.6p

Fully diluted adjusted             
earnings per share 
(see note 9)                       13.2p                             15.5p

Dividend per share 
(see note 10)                       9.0p                             14.4p

(1) Before exceptional items
(2) Exceptional items
(3) After exceptional items                                                   
           
                                                               
                                                               
Consolidated statement of total recognised gains and losses
                                                53 weeks    52 weeks
                                                   ended       ended
                                                 1 April    27 March
                                                    2000        1999
                                                      £m          £m
Profit attributable to                                             
shareholders                                      258.7       372.1

Exchange differences on                                     
foreign currency translation                      (16.8)       15.0

Unrealised surpluses on                                            
revaluation of investment                           3.0        34.1
properties

Total recognised gains and                                        
losses relating to the year                       244.9       421.2


Notes                                                       
                                                            
1. Basis of preparation                                     
The results comprise those of Marks and Spencer p.l.c. and its UK and
international subsidiaries for the year ended 31 March 2000 and have been
prepared using accounting policies consistent with those adopted last year. 
The results for the year comprise stores sales and related costs for the 53
weeks to 1 April 2000 (last year 52 weeks to 27 March 1999).  All other
activities are for the year to 31 March 2000.  This summary of results does
not constitute the full Financial Statements within the meaning of s240 of the
Companies Act 1985.  The full Financial Statements have been reported on by
the Company's auditors, but have not yet been delivered to the Registrar of
Companies.  The audit report was unqualified and did not contain a Statement
under s237(2) or s237(3) of the Companies Act 1985.
                                                            
2. Turnover                                                 
Turnover (excluding sales taxes for international operations) is analysed as
follows:-
                                          53       52 weeks ended
                                       weeks    
                                       ended
                                           1         27        Inc/
                                       April      March        (Dec) 
                                        2000        1999    
                                                         
                                          £m         £m          %
UK Retail (incl. VAT)                                       
Clothing, Footwear and Gifts         3,948.7     4,196.0        (5.9)
                    
Home Furnishings                       319.1       308.0         3.6

Foods                                2,880.4     2,787.6         3.3
                                        
                                     7,148.2     7,291.6        (2.0)
                                          
                                                               
Less: United Kingdom VAT              (665.5)    (690.5)        (3.6)
                                         
                                     6,482.7    6,601.1         (1.8)
                                           
                                                               
International Retail                                                
Europe (excl. UK)                      555.6       554.0         0.3
                                                               
The Americas                                                   
Brooks Brothers (incl. Japan)          395.5       345.9         14.3

Kings Super Markets                    273.7       245.5         11.5
                                                               
                                       669.2       591.4         13.2

M&S Canada (see note 6)                 22.2        38.1        (41.7)
                                                               
                                       691.4       629.5          9.8
                                                               
Far East                               101.2        90.8         11.5
                                                               
Total International (see note 8)     1,348.2     1,274.3          5.8
                                          
                                                     
Financial Services (UK)                364.6       348.6          4.6
                                                               
Total turnover                       8,195.5     8,224.0         (0.3)
                                          
                                                              
Turnover is analysed as follows:-                           

United Kingdom                       6,847.3     6,949.7         (1.5)
                                        
International                        1,348.2     1,274.3          5.8
                                                 
                                     8,195.5     8,224.0         (0.3) 
                                          
                                                            
                                                            
The value of goods exported from the UK, including shipments to international
subsidiaries, amounted to £460.2m(last year £440.2m).

3. Operating profit                                         
Operating profit arises as follows:-                        
                                                53          52
                                             weeks       weeks
                                             ended       ended
                                           1 April     27March
                                              2000        1999
                                                £m          £m
                                                            
UK Retail                                                   
Before exceptional operating charges         420.1       478.9

Less: exceptional operating charges          
(see note 5)                                 (63.3)      (24.5)
                                                               
                                             356.8       454.4
                                                               
Financial Services                           115.9        110.7
                                                               
International Retail                                                
Europe (excl. UK)                             (4.1)       (12.4)
                                                            
Less: pre-opening costs                       (2.0)       (14.4)
                                                             
                                              (6.1)       (26.8)
                                                             
Less: exceptional operating charges           
(see note 5)                                  (8.7)       (64.0)
                                               
                                             (14.8)       (90.8)
                                                
                                                               
The Americas                                                   
Brooks Brothers (incl. Japan)                  7.9        12.4

Kings Super Markets                           11.1        10.0

Corporate Expenses                            (2.6)       (2.0)
                                                               
                                              16.4        20.4
M&S Canada (see note 6)                         -         (4.7)
                                              
                                              16.4        15.7
                                                               
Far East                                      (3.2)      (14.4)
                                                             
Less: pre-opening costs                          -        (0.1)
                                                
                                              (3.2)      (14.5)
                                                             
Other                                         (0.1)       11.0
                                              (3.3)       (3.5)
                                                               
Total International  - analysed between:                            
Profit before exceptional operating                       
charges                                        7.0        (14.6)

Exceptional operating charges
(see note 5)                                  (8.7)       (64.0)
                                            
                                              (1.7)       (78.6)
                                                             
                                                               
Total segmental operating profit             471.0        486.5

Add: excess interest charged to cost                          
of sales of Financial Services (see              -        25.5
note 4)
                                                               
Total operating profit                       471.0       512.0
                                                               
                                                               
Analysis of operating profit                                     

Total segmental operating profit                               
before exceptional items                     543.0       575.0

Exceptional operating charges                (72.0)      (88.5)
                                                 
Excess interest charged to cost of                             
sales of Financial Services                      -        25.5
                                                               
                                             471.0       512.0
                                                               
Retailing before exceptional items           427.1       464.3

Exceptional operating charges                (72.0)      (88.5)
                                               
Retailing after exceptional items            355.1       375.8

Financial Services                           115.9       110.7
                                                               
Excess interest charged to cost of                             
sales of Financial Services                      -        25.5
                                                               
                                             471.0       512.0                
                                           

The geographical segments disclose turnover and operating profit by
destination and reflect management responsibility. Following the closure of
the Canadian operations and a realignment of management responsibility,
franchise turnover and operating profits previously included within The
Americas are now included within Europe. Comparatives have been restated
accordingly.  

The profits generated from sourcing merchandise and technological services in
Hong Kong, together with the costs of research into new markets in the region,
are grouped within Far East under 'Other'.  Due to change affecting sourcing
from the Far East, sourcing income for the year has fallen by £12.7m, with a
corresponding reduction in UK retail operating costs.


4. Interest charged to cost of sales                        
Financial Services operating profit is stated after charging £105.5m
(last year £102.3m) of interest to cost of sales.  This interest represents
the cost of funding the Financial Services business as a separate segment,
including both intra group interest and third party funding.  The amount of
third party interest payable by the Group during the year was £107.4m (last
year £76.8m).  Intra group interest of £nil (last year £25.5m), being the
excess over third party interest payable, has been added back in the
segmental analysis to arrive at total operating profit.


5. Exceptional operating charges                            
                                                53           52
                                             weeks        weeks
                                             ended        ended
                                           1 April     27 March
                                              2000         1999
                                                £m           £m
                                                             
UK redundancy costs (i)                        63.3        24.5

European restructuring costs (ii)               8.7           -

Provision for impairment (iii)                    -        64.0

Total exceptional operating charges            72.0        88.5
                                                            
(i) The £63.3m charge for the year (of which £16m was reported at the half
year) is in respect of the restructuring of UK Retail into
customer business units, the rationalisation of store management and the
re-focussing of existing store roles to customer facing activities, and the
closure of two distribution centres. The £24.5m charge last year represents
the cost of rationalising the Group's head office functions.


(ii) The European restructuring costs are in respect of store closures in
France and Germany announced during the year.


(iii) The £64m charge last year was in respect of the provision made to
adjust the carrying value of our European fixed assets in accordance with FRS
11 'Impairment of Fixed Assets and Goodwill'.
                                                            
6.  Loss on termination of Canadian operation
On 28 April 1999, the Group announced the closure of its Canadian operations.
As a consequence, its subsidiary, Marks and Spencer Canada Inc., ceased to
trade during the year.  The loss on closure of operations of £45.4m
arises as follows:
                                                         £m
Trading losses since 28 April 1999                        0.6

Net closure costs                                        20.4

Loss before goodwill previously                            
written off to reserves                                  21.0

Goodwill previously written off to                         
reserves                                                 24.4

Total loss on termination of                               
Canadian operation                                       45.4
                                                            
In the period prior to closure, Marks and Spencer Canada contributed
£22.2m to turnover (last year £38.1m) and £nil to operating profit (last year
£4.7m loss).
                                                            
7. (Loss)/profit on sale of fixed assets
                                                53          52
                                             weeks       weeks
                                             ended       ended
                                           1 April    27 March
                                              2000        1999
                                                £m         £m
Loss on sale of UK investment                             
properties (i)                                (16.1)         -  

Loss on sale of European stores (ii)          (8.3)          - 
                                                             
Profit on other asset disposals                2.1         6.2

Total (loss)/profit on sale of other                     
fixed assets                                  (22.3)       6.2
                                                               
(i) The loss on sale of investment properties is in respect of the disposal of
The Gyle shopping centre and a property in Newcastle. Overall, the Group has
realised a profit of £58.1m based on the original purchase cost which has not
been reflected in the profit and loss account.  The properties have been
revalued annually since their acquisition and the cumulative revaluation
surplus of £74.2m has been recognised through the Statement of Total
Recognised Gains and Losses in previous years.

(ii) The loss on sale of European properties of £8.3m relates to store
closures in Europe.  After including the restructuring costs of £8.7m
disclosed in note 5 (ii) above, the total closure cost is £17m.
                                                             
8.  Foreign Currencies                                      
The results of international subsidiaries have been translated using average
rates of exchange ruling during the period.  The movements in exchange
rates used for translation, compared to the same period last year, have
reduced international sales from (excluding Canada) by £5.7m.  The effect on
the results of international operations is not significant.  When expressed at
constant rates for translation, turnover increases on last year become:
                                                        
                                     Turnover increase %                      
                                     
                                                   As        At
                                            reported   constant
                                                          rates
                                                      
Europe                                            0.3   6.1

The Americas                                                
Brooks Brothers (incl.Japan)                     14.3   9.4

Kings Super Markets                              11.5   8.9

Far East                                         11.5   9.6

Total International Retail                        7.3   7.7
                                                            
                                                            
9.  Earnings per share                                      
The calculation of earnings per ordinary share is based on earnings after tax
and minority interests of £258.7m (last year £372.1m), and on 2,872,055,200
ordinary shares (last year 2,864,724,900), being the weighted average number
of ordinary shares in issue during the year ended 31 March 2000.  The weighted
average number of ordinary shares used in the calculation of fully diluted
earnings per ordinary share is 2,885,697,100 ordinary shares(last year
2,883,306,200).

An adjusted earnings per share figure has been calculated in addition to the
earnings per share required by FRS 14 and is based on earnings excluding the
effect of the exceptional items.  It has been calculated to allow the
shareholders to gain a clearer understanding of the trading performance of the
Group.  Details of the adjusted earnings per share are set out below:
                                                            
                                                53          52
                                             weeks       weeks
                                             ended       ended
                                           1 April    27 March
                                              2000        1999
                                                            
Earnings per share                             9.0p       13.0p

Exceptional operating costs (net of tax)       1.8p        2.8p

Loss on termination of Canadian                          
operation (net of tax)                         1.6p          -

Loss/(profit) on sale of fixed                        
assets                                         0.8p       (0.2)p      

Adjusted earnings per share                   13.2p       15.6p
                                                            
The IIMR earnings per share is 11.4p(last year 15.0p). Under this measure
standard earnings are adjusted to eliminate certain capital items.
                                                            
10.  Dividend                                               
The directors have proposed a final dividend of 5.3p per share (last year
10.7p).  This makes a total ordinary dividend for the year of 9.0p (last year
14.4p).  The total cost of dividends is £258.6m (last year £413.3m).  The
ordinary shares will be quoted ex dividend on 30 May 2000.  The final dividend
will be paid on 28 July 2000 to shareholders whose names are on the Register
of Members at the close of business on 5 June 2000.  Shareholders may choose
to take this dividend in shares or in cash.
                                                            
11.  Date of approval                                       
The financial statements for the year ended 31 March 2000 were approved by the
Directors on 22 May 2000.


Consolidated balance sheet                                  
                                               As at        As at
                                            31 March    31 March
                                                2000        1999
                                                  £m          £m
Fixed assets                                                
Goodwill                                         1.3           -

Tangible assets                              4,242.1     4,387.5

Investments                                     55.0        61.2
                                                            
                                             4,298.4     4,448.7
                                                            
Current assets                                              
Stocks                                         474.4       514.7

Debtors                                      2,555.2     2,355.7
                                            
Cash and investments                           687.5       485.5
                                                            
                                             3,717.7     3,355.9
                                                            
Current liabilities                                         
Creditors: amounts falling due                              
within one year                              2,162.8    2,029.8
                                                                            
Net current assets                           1,554.3     1,326.1
                                            
Total assets less current                                   
liabilities                                 5,852.7     5,774.8
                                            
                                                            
Creditors: amounts falling due after                        
more than one year                           804.3        772.6

Provisions for liabilities and                              
charges                                      126.6        105.0
                                                            
                                                  
Net assets                                 4,921.8      4,897.2
                                          
                                                            
Capital and reserves                                        
Called up share capital                     718.6        717.7

Share premium account                       369.4        358.5

Revaluation reserve                         457.9        531.0

Profit and loss account                   3,359.4      3,276.7
                                            
Shareholders' funds (all equity)          4,905.3      4,883.9
                                            
Minority interests (all equity)              16.5         13.3

Total capital employed                    4,921.8      4,897.2
                                                            
                                                            
Reconciliation of movements in shareholders' funds


                                             As at        As at
                                          31 March     31 March
                                              2000         1999
                                                £m           £m
Profit attributable to shareholders          258.7        372.1

Dividends                                   (258.6)      (413.3)
                                               0.1        (41.2)

Other recognised gains and losses                         
relating to the period                       (13.8)        49.1               
          
New share capital subscribed                  11.8         34.9

Amounts deducted from profit and             
loss account reserve in respect of                           
shares issued to QUEST                        (1.1)       (12.6)

Goodwill transferred to the profit                           
and loss account in respect of the            
closure of Canada                             24.4             -

Net addition to                                   
shareholders' funds                           21.4         30.2

Shareholders' funds at 1 April             4,883.9      4,853.7
                                                
Shareholders' funds at 31 March            4,905.3      4,883.9
                                                            
                                                            
                                                            
Consolidated cash flow statement                            
                                            53 weeks     52 weeks
                                               ended        ended
                                             1 April     27 March
                                                2000         1999
                                                  £m           £m
Operating activities                                        
Operating profit                               471.0        512.0

Exceptional operating items                     72.0         88.5

Operating profit before exceptional                            
items                                          543.0        600.5

Depreciation                                   261.6        236.4

Increase in working capital (i)               (113.9)      (364.0)
                                                
Net cash inflow before exceptional                             
items                                          690.7        472.9

Exceptional operating cash outflow             (49.2)        (0.6)
                                                
Cash inflow from operating                                     
activities                                     641.5        472.3

Returns on investments and servicing                           
of finance                                      15.2         29.0

Taxation                                      (145.7)      (345.9)
                                                
Capital expenditure and financial                  
investment (see note (ii))                    (167.0)      (628.1)

Acquisitions and disposals (see note                     
(iii))                                         (21.1)          1.0

Equity dividends paid                         (413.5)       (412.6)
                                               
                                                               
Cash outflow before management of liquid 
resources and financing                         (90.6)      (884.3)           
                 
Management of liquid resources                 (162.5)       180.6     
                                                
Financing (see note (iv))                       260.3        505.0

Increase/ (decrease) in cash                      7.2       (198.7)
                                                               
Notes                                                       
                                                53 weeks   52 weeks
                                                   ended      ended     
                                                 1 April   27 March
                                                    2000       1999
                                                      £m         £m
                                                               
(i) Increase in working capital                                
Decrease/(Increase) in stocks                      40.3       (7.6)

Increase in customer advances                     (206.2)    (363.0)
                                               
Increase in creditors                               51.1       14.6

Other working capital movements                      0.9       (8.0)
                                                  (113.9)    (364.0)
                                                               
(ii) Capital expenditure and financial investment
Purchase of tangible fixed assets                (447.5)     (663.0)
                                                
Sale of tangible fixed assets                     266.0        25.5

Net sale of fixed asset investments                14.5         9.4
                                                 (167.0)     (628.1)
                                               
                                                               
(iii) Acquisitions and disposals                               
Closure of Canadian operations                    (15.4)           - 
                                                
Repayment of loan by joint venture                  0.5         1.0

Acquisition of minority interest                   (6.2)          -
                                                  (21.1)        1.0
                                                               
(iv) Financing                                                 
Debt financing as shown in movement                            
of net debt                                       250.9       482.8

Shares issued under employees' share                           
schemes                                             9.4       22.2
                                                  260.3      505.0
                                                            
                                                            
Reconciliation of net cash flow to movement in net debt
                                               53 weeks   52 weeks
                                                  ended      ended
                                                1 April   27 March
                                                   2000       1999
                                                     £m         £m
Increase/ (decrease) in cash                        7.2     (198.7)

Cash outflow/ (inflow) from decrease                      
in liquid resources                                162.5    (180.6)

Cash inflow from increase in debt             
financing (see note (iv))                         (250.9)   (482.8)           
     
Exchange movements                                  11.4      (0.2)

Movement in net debt                               (69.8)   (862.3)
                                                 
Net debt at beginning of the period             (1,181.6)   (319.3)
                                              
Net debt at end of the period                   (1,251.4) (1,181.6)