Interim Results
Marks & Spencer Group PLC
05 November 2002
Marks and Spencer Group p.l.c.
Interim Results Announcement
26 weeks ended 28 September 2002
HIGHLIGHTS
• Group turnover* up 7.9% to £3,691.9m
• Group operating profit* up 41.1% to £305.8m
• Group profit before tax and exceptional items* up 29.8% to £287.0m
• Earnings per share up 60% to 8.5 pence per share
• Interim dividend of 4.0 pence per share, up 8.1%
* from continuing operations
Commenting on the results, Luc Vandevelde, Chairman said:
'I am pleased with the performance over the half year, which shows we are
continuing to deliver on our promises.
We are now in a position where we have achieved four consecutive quarters of
positive growth. This has translated into good half year results, which is a
further indication that we have moved from securing, to sustaining the recovery.
In light of this, I am pleased to declare an interim dividend of 4.0 pence per
share, an increase of 8.1% on last year.
Looking forward, we are now focused on gaining market share in the core areas,
particularly Clothing and Food and on building the foundations for future
growth. However, we recognise that we are aiming to achieve this in a market we
expect to become less buoyant. At the same time, we are coming up against
challenging year-on-year comparisons.
As we go into the crucial Christmas period, we remain confident that we will
continue to give our customers reasons to keep coming to us and buying more, by
offering appealing products at great value within an improved store
environment.'
Roger Holmes, Chief Executive said:
'The improvements we have made to date in Clothing, Food, Home and in our stores
have been appreciated by our customers and are reflected in our performance. We
are now delivering gains in market share across all three areas.
In Clothing, we have continued to improve the appeal, quality and fit of our
merchandise as well as segmenting our ranges more clearly. The focus on key
product areas together with recently developed categories, including per una and
Blue Harbour, has been well received by our customers. The Clothing buying
margin continues to benefit from the changes we made to the sourcing of
merchandise. Opportunities remain to improve flexibility and speed to market.
In Food, a good sales performance has been driven by the high quality of our
products and continued innovation. We are reaching more customers, opening three
Simply Food stores in the period and are on track to deliver our target of 20
stores this year.
We have renewed a further 63 stores in the period. We now have 80% of UK Retail
selling space in the renewed format, creating a brighter and more modern
environment for our customers.
In Financial Services, we have taken the first steps to reinvigorate our
Chargecard business with the recent launch of a pilot in South Wales for a
combined credit and loyalty card.
Looking ahead, we remain dedicated to continuing the improvement in the shopping
experience for our customers.'
OPERATING REVIEW
Group Summary
2002 2001 % inc/
(dec)
£m £m
Turnover - continuing operations
Retailing
UK Retail 3,193.7 2,916.3 9.5%
International Retail 331.6 331.6 -
3,525.3 3,247.9 8.5%
Financial Services 166.6 174.8 (4.7%)
3,691.9 3,422.7 7.9%
Operating profit - continuing operations
Retailing
UK Retail 236.0 147.4 60.1%
International Retail 19.3 19.0 1.6%
255.3 166.4 53.4%
Financial Services 50.5 44.0 14.8%
Excess interest charged to cost of sales of Financial Services - 6.3
305.8 216.7 41.1%
Profit before tax 285.3 213.3 33.8%
Earnings per share 8.4p 5.0p 68.0%
Adjusted earnings per share 8.5p 5.3p 60.4%
Retailing
UK Retail
Turnover (excluding VAT) was up 9.5% on last year at £3,193.7m. Including VAT,
turnover was up 10.0% on last year, 8.8% on a like-for-like basis. The quarterly
sales performance for the first half of the year is set out below:
Q1 Q2 TOTAL
Actual increase on last year % % %
Clothing (including footwear and gifts) 14.8 13.8 14.4
Home 5.9 15.1 10.0
Food 2.9 7.5 5.0
Total 9.1 11.1 10.0
Volumes for Clothing have increased by approximately 10%, with the balance of
the sales increase being attributable to higher average selling prices, largely
reflecting the mix of products sold. In Home, the increase in sales is largely
volume related. Food inflation during the period was 0.5%. Total selling space
remained broadly level at 12.2m sq. ft., but the weighted average footage for
the period fell by 0.6%.
On a like-for-like basis, sales were as follows:
Q1 Q2 TOTAL
Like-for-like increase on last year % % %
Clothing and Home 12.7 13.2 13.0
Food 1.5 6.0 3.6
Total 7.7 10.0 8.8
These results reflect the progress we are making to recover the performance of
the Clothing business by focusing on the appeal, quality and fit of our product.
All areas of adult clothing achieved double digit sales increases and gained
market share, with particular highlights being ladies' casualwear, Autograph and
men's casualwear, helped by the Blue Harbour ranges.
In Lingerie, the focus on product and availability has meant that we have
continued to make progress against last year, strengthening our position as the
market leader.
The performance of Childrenswear was poor in the first half of the year, with
insufficient product appeal in girlswear and a lack of availability in underwear
and schoolwear at peak times. However, the strong response to the DB07, David
Beckham, range which we launched in September gives us the confidence that we
can grow this business when we get the product right.
We have continued to realise the gains from the actions taken to increase
overseas production and consolidate our supply base. At the half year this
delivered a further 1.8 percentage point improvement in the Clothing bought-in
margin. However, as a result of excess commitment, the cost of mark-downs was
broadly level with the same period last year. These arose within Womenswear,
where we drove for high sales growth and improved availability, and in
Childrenswear due to disappointing sales.
Distribution costs, which are included in cost of sales, increased marginally
less than the rate of sales growth.
In Home, the performance of furniture in the first half was strong, helped by
the Bank Holiday events around the Jubilee and at the end of August. Sales also
benefited from the introduction of new products across the range, particularly
within home accessories and bedding.
In Foods, we have outperformed the market in the second quarter, helped by the
high quality of our products, continued innovation and strong, cohesive
marketing. We continue to focus on extending the reach of our product, making
our food more accessible to more customers, particularly through the 'Simply
Food' format. We have opened three stores in the first half, expect to open a
further four by Christmas and plan to open 20 in total by the end of the
financial year.
Operating costs increased by 5.4% over the same period last year. Within this,
employee costs, which represent approximately half of total operating costs,
increased by 4.7%. This was primarily as a result of the annual salary review of
3% and additional staffing for per una and Cafe Revive, which were rolled out
during the second half of last year. Property, repair and renewal costs have
increased by 9%, largely as a result of the sale and leaseback transaction
entered into last year, which added £12.6m to rental costs in the first half.
Depreciation was broadly level on the year. Other operating costs increased by
6.9%. This was largely due to increases in marketing costs, primarily due to TV
advertising for Food, and IT expenditure to support business initiatives,
including infrastructure costs for the relocation of the corporate head office
next year.
We have renewed 63 stores during the period, including the addition of a further
29 Coffee shops, at a total cost of approximately £32m. This includes £7m of
revenue costs which have been expensed. We have plans to renew a further 41
stores before Christmas at a cost of approximately £26m (including business unit
schemes). In total, by Christmas we will have 236 stores trading in the
modernised format, representing approximately 89% of UK Retail selling space.
UK capital expenditure for the period was approximately £165m. In addition to
the expenditure on store renewal, this also includes £25m on new space, £27m on
new selling initiatives and £48m on replacement capital expenditure.
International Retail
At actual exchange rates At constant exchange rates
2002 2001 % inc/ 2002 2001 % inc/
£m £m (dec) £m £m (dec)
Turnover
Retained businesses 182.4 167.6 8.8% 182.6 167.6 8.9%
Kings Super Markets 149.2 164.0 (9.0%) 157.0 164.0 (4.3%)
331.6 331.6 - 339.6 331.6 2.4%
Operating profit
Retained businesses 14.7 13.1 12.2% 14.7 13.1 12.2%
Kings Super Markets 4.6 5.9 (22.0%) 4.9 5.9 (16.9%)
19.3 19.0 1.6% 19.6 19.0 3.2%
The results from continuing operations include sales and operating profits from
Kings Super Markets as the planned disposal has not yet been completed, due to
the buyer's financing taking longer than anticipated.
Turnover for the period in the retained businesses (Republic of Ireland,
franchises and Hong Kong) increased by 8.8%.
Operating profit for the retained businesses increased by 12.2% to £14.7m,
compared to £13.1m for the same period last year. Within this, the Republic of
Ireland performed ahead of last year and we have also seen an improvement in the
performance of our franchise business. In Hong Kong, actions taken last year to
decrease footage in selected locations and reduce costs, together with a new
pricing strategy, are beginning to deliver results.
Financial Services
2002 2001 % inc/
(dec)
£m £m
Operating profit
Financial Services retailing activities 48.1 41.4 16.2%
MS Insurance 2.4 2.6 (7.7%)
50.5 44.0 14.8%
Operating profit from Financial Services increased by £6.5m to £50.5m. The
results of the captive insurance company were again affected by negative
investment returns due to falls in the underlying markets. However, the
Financial Services retailing activities increased operating profits by 16.2% to
£48.1m. This was a result of improving returns from the core lending products
and a programme of cost reduction which has generated savings of £6m compared
with last year.
The proportion of retail sales made on the Chargecard has reduced slightly to
approximately 18% for the period to September and the number of active accounts
has decreased year-on-year by approximately 7%. However, with the average
outstanding balance per customer continuing to rise, average customer borrowings
have been higher than the same period last year leading to an overall increase
in net income.
In September, we mailed Chargecard customers in South Wales with details of the
new credit card and loyalty scheme. During the coming months this pilot will
provide valuable learning prior to planned rollout next year. Total revenue
costs incurred for the pilot so far this year amount to £9m. Total project costs
for this financial year are expected to be £25m and not the £35m previously
indicated.
In personal lending, competitive forces remain strong and outstanding balances
are down 6% year-on-year. Within this, incremental interest bearing personal
loan advances for the first six months are in line with last year, but have been
offset by a reduction in the amount of replacement business.
The introduction of a revised bad debt policy resulted in a one-off increase in
bad debt charge in the second half of last year. As expected, the application of
the new policy and the revised procedures associated with it, has resulted in a
total bad debt charge in the first half which is broadly in line with historic
levels.
In other areas, the amount of new unit trust investment has more than doubled
year-on-year. However, the number of new policies in other product areas has
fallen. During the period we withdrew the group stakeholder pension and mortgage
protection products.
Discontinued operations
Last year, we closed the Continental European operations and sold Brooks
Brothers. The results of these businesses up until the dates of closure or
disposal are reported under discontinued operations.
Net interest expense
Net interest expense was £18.8m compared to net interest income of £4.4m for the
same period last year. This arises as a result of the increase in debt following
the capital restructuring of the Group at the end of last year. The average rate
of interest on borrowings during the period was 5.8%.
Taxation
The tax charge reflects an effective tax rate of approximately 30% compared to
31.6% for the same period last year. This rate reflects the fact that the
majority of our profits are subject to tax at the UK corporation tax rate of 30%
and the minimal impact of timing and permanent differences.
Capital structure
During the period, 16,130,353 ordinary shares (representing 0.7% of the issued
share capital) were purchased in the market at a total cost of £53.4m at an
average price of 330.9p.
On 25 September 181,478,363 B shares were redeemed at par at a total cost of
£127.0m. Following this redemption, 212,725,066 B shares remain in issue. The
next opportunity for redemption is in March 2003.
At the end of the period, net debt was £2.0bn giving rise to retail gearing of
24.6%, with total gearing at 44.7%.
Earnings per share
Adjusted earnings per share has increased by over 60% to 8.5 pence per share.
Approximately three quarters of this increase is due to the improved operating
performance, with the balance attributable to the impact of the capital
restructuring carried out at the end of last year.
Cash flow
The Group generated an operating cash inflow for the period of £422.5m. Within
this, the cash inflow from retailing activities was £283.9m (last half year
£296.7m) and the cash inflow from financial services activities was £138.6m
(last half year £100.5m). Retail operating cash flow has declined due to an
£87.0m increase in stock levels since the year end.
During the period, the Group acquired tangible fixed assets totalling £165.6m
(last half year £146.9m). After taking into account the timing of payments, the
cash outflow for capital expenditure was £129.9m (last half year £75.1m).
Proceeds in the period are largely due to the sale of part of our Manchester
store.
The cash outflow from acquisitions and disposals of £29.4m includes a repayment
of £30.2m to the purchaser of Brooks Brothers for the difference between working
capital at the date of the agreement and the date of completion, which was
anticipated and provided for last year.
The overall cash inflow before funding of £38.9m has been partly used to fund
the redemption of B shares in September, and the purchase of ordinary shares.
Updated guidance
• We anticipate Clothing mark-downs for the full year to be broadly level
with last year.
• The combined credit and loyalty card will add approximately £25m to
operating costs this year compared to the original estimate of £35m due to
the phasing of the work on the infrastructure.
• The impact of a national rollout of the combined credit and loyalty card
would be to reduce profits by around £60m for the financial year 2003/04,
compared to the £25m this year. This is a provisional number and we will
update it as we obtain further details from the pilot.
For further information, please contact:
Media enquiries:
Marks & Spencer Corporate Press Office: 020 7396 3553/3549 (until 2pm)
020 7268 1919
Broadcast enquiries:
Cheryl Kuczynski 07831 829880
Stuart Bruseth 07974 982494
Photography:
Photography available from:
www.newscast.co.uk
or
www.marksandspencer.com/mediacentre
Analyst enquiries:
Tony Quinlan 020 7268 4195
Nick Jones 020 7268 6594
To see video interviews with Luc Vandevelde, Chairman, Roger Holmes, Chief
Executive, and Alison Reed, Chief Financial Officer, please go to:
www.marksandspencer.com/thecompany
or
www.cantos.com
Consolidated profit and loss account
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
Notes £m £m £m
Turnover
Continuing operations 3,691.9 3,422.7 7,619.4
Discontinued operations - 315.5 516.0
Total turnover 2 3,691.9 3,738.2 8,135.4
Operating profit
Continuing operations 305.8 216.7 629.1
Discontinued operations:
Continental European operations - 26.4 42.5
Less provision made in 2001 - (26.4) (42.5)
Other discontinued operations - (0.8) 14.7
Total operating profit 3 305.8 215.9 643.8
Profit / (loss) on sale of property and other fixed 5A (0.2) (7.0) 41.2
assets
Loss on sale / termination of operations: 5B
Loss arising on sale / termination (2.9) (3.1) (102.8)
Less provision made in 2001 1.4 3.1 104.3
(1.5) - 1.5
Goodwill previously written off - - (368.2)
Net loss on sale / termination of operations (1.5) - (366.7)
Net interest (expense) / income 4 (18.8) 4.4 17.6
Profit on ordinary activities before taxation 285.3 213.3 335.9
Taxation on ordinary activities 6 (86.1) (67.5) (182.5)
Profit on ordinary activities after taxation 199.2 145.8 153.4
Minority interests (all equity) (0.2) (1.6) (0.4)
Profit attributable to shareholders 199.0 144.2 153.0
Dividends (including dividends in respect of 8 (96.4) (105.2) (238.9)
non-equity shares)
Retained profit / (loss) for the period 102.6 39.0 (85.9)
Earnings per share 7 8.4p 5.0p 5.4p
Diluted earnings per share 7 8.3p 5.0p 5.4p
Adjusted earnings per share 7 8.5p 5.3p 16.3p
Diluted adjusted earnings per share 7 8.4p 5.3p 16.2p
Dividend per share 8 4.0p 3.7p 9.5p
Consolidated statement of total recognised gains and
losses
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Profit attributable to shareholders 199.0 144.2 153.0
Exchange differences on foreign currency translation 8.7 (1.2) 0.1
Unrealised surpluses on revaluation of investment properties* - - 0.5
Total recognised gains and losses relating to the 207.7 143.0 153.6
period
* revalued annually in March
Consolidated balance sheet
As at As at As at
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Fixed assets
Tangible assets 3,383.9 4,016.1 3,381.2
Investments 37.5 59.6 50.3
3,421.4 4,075.7 3,431.5
Current assets
Stock 411.0 462.8 325.3
Debtors 2,581.3 2,642.1 2,619.3
Cash and investments 399.5 605.6 816.1
3,391.8 3,710.5 3,760.7
Current liabilities
Creditors : amounts falling due within one year (1,484.1) (1,930.7) (1,750.8)
Net current assets 1,907.7 1,779.8 2,009.9
Total assets less current liabilities 5,329.1 5,855.5 5,441.4
Creditors : amounts falling due after more than one (2,112.5) (932.4) (2,156.3)
year
Provisions for liabilities and charges (197.7) (351.9) (203.8)
Net assets 3,018.9 4,571.2 3,081.3
Capital and reserves
Called up share capital 722.2 711.9 852.7
Share premium account 8.7 378.1 2.8
Revaluation reserve 383.2 453.3 387.3
Capital redemption reserve 1,849.0 8.0 1,717.9
Other reserve (6,542.2) - (6,542.2)
Profit and loss account 6,597.4 3,003.2 6,662.4
Shareholders' funds (including non-equity interests) 3,018.3 4,554.5 3,080.9
Minority interests (all equity) 0.6 16.7 0.4
Total capital employed 3,018.9 4,571.2 3,081.3
Reconciliation of movement in shareholders' funds
As at As at As at
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Profit attributable to shareholders 199.0 144.2 153.0
Dividends (96.4) (105.2) (238.9)
102.6 39.0 (85.9)
Other recognised gains and losses relating to the 8.7 (1.2) 0.6
period
Issue / redemption expenses - - (9.3)
New share capital subscribed 6.5 2.9 8.9
Amounts added to the profit and loss account in
respect
of shares issued to the QUEST - - 2.5
Redemption of B shares (127.0) - (1,717.9)
Purchase of own shares (53.4) (52.0) (52.0)
Goodwill transferred to the profit and loss account in
respect of the closure of businesses - - 368.2
Net movement in shareholders' funds (62.6) (11.3) (1,484.9)
Shareholders' funds at beginning of the period 3,080.9 4,565.8 4,565.8
Shareholders' funds at end of the period 3,018.3 4,554.5 3,080.9
Consolidated cash flow statement
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Operating activities
Operating profit 305.8 215.9 643.8
Utilisation of provision against European trading - (26.4) (42.5)
losses
Depreciation 117.9 133.7 249.6
Decrease in working capital 9A 7.8 89.5 272.8
Net cash inflow before exceptional items 431.5 412.7 1,123.7
Exceptional operating cash outflow (9.0) (15.5) (30.0)
Cash inflow from operating activities 422.5 397.2 1,093.7
Dividend received from joint venture 8.0 - -
Returns on investments and servicing of finance (16.3) 6.9 36.8
Taxation (99.7) (56.2) (179.4)
Capital expenditure and financial investment 9B (107.8) (24.6) 176.0
Acquisitions and disposals 9C (29.4) 11.5 261.6
Equity and non-equity dividends paid (138.4) (152.0) (256.7)
Cash inflow before management of liquid resources 38.9 182.8 1,132.0
Management of liquid resources (28.9) (271.1) (29.1)
Financing 9D (597.7) 55.1 (730.2)
Increase / (decrease) in cash (587.7) (33.2) 372.7
Reconciliation of net cash flow to movement in net
debt
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Increase / (decrease) in cash (587.7) (33.2) 372.7
Cash outflow from increase in liquid resources 28.9 271.1 29.1
Cash outflow / (inflow) from decrease / (increase) in debt 423.8 (101.7) (1,031.7)
financing
Exchange movements (1.6) (0.7) 0.7
Movement in net debt (136.6) 135.5 (629.2)
Net debt at beginning of the period (1,907.0) (1,277.8) (1,277.8)
Net debt at end of the period (2,043.6) (1,142.3) (1,907.0)
Notes to the interim statement
1. Basis of preparation
The results for the first half of the financial year have not been audited and
are prepared on the basis of the accounting policies set out in the Group's 2002
Annual Report and Financial Statements. The summary of results for the year
ended 30 March 2002 does not constitute the full financial statements within the
meaning of s240 of the Companies Act 1985. The full financial statements for
that year have been reported on by the Group's auditors and 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:-
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Continuing operations:-
UK Retail (incl. VAT)
Clothing, Footwear and Gifts 1,852.3 1,619.5 3,773.4
Home 179.7 163.5 373.3
Foods 1,488.0 1,417.3 3,093.5
3,520.0 3,200.3 7,240.2
Less : United Kingdom VAT (326.3) (284.0) (665.0)
3,193.7 2,916.3 6,575.2
International Retail
Retained businesses (1) 182.4 167.6 364.7
Kings Super Markets 149.2 164.0 328.7
331.6 331.6 693.4
Total Retailing 3,525.3 3,247.9 7,268.6
Financial Services (UK) 166.6 174.8 350.8
Total continuing operations 3,691.9 3,422.7 7,619.4
Discontinued operations:-
Continental Europe - 116.0 170.2
The Americas - 199.5 345.8
Total discontinued operations - 315.5 516.0
Total turnover 3,691.9 3,738.2 8,135.4
Turnover from continuing operations is analysed as
follows:-
United Kingdom 3,360.3 3,091.1 6,926.0
International 331.6 331.6 693.4
Total turnover 3,691.9 3,422.7 7,619.4
(1) Retained businesses within International Retail consists of Republic of
Ireland, Hong Kong and franchise operations. The value of goods exported from
the UK, including shipments to overseas subsidiaries, amounted to £132.3m
(last half year £170.6m).
3. Operating profit
Operating profit arises as follows:-
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Continuing operations:-
UK Retail 236.0 147.4 505.2
International Retail
Retained businesses 14.7 13.1 20.7
Kings Super Markets 4.6 5.9 12.6
19.3 19.0 33.3
Total Retailing 255.3 166.4 538.5
Financial Services 50.5 44.0 84.2
Segmental operating profit from continuing operations 305.8 210.4 622.7
Add : excess interest charged to cost of sales of Financial - 6.3 6.4
Services
Operating profit from continuing operations 305.8 216.7 629.1
Discontinued operations:-
Continental Europe - 26.4 42.5
Less provision made in 2001 - (26.4) (42.5)
- - -
The Americas
Brooks Brothers (incl. Japan) - (0.8) 14.9
Corporate expenses - - (0.2)
- (0.8) 14.7
Operating profit from discontinued operations - (0.8) 14.7
Total operating profit 305.8 215.9 643.8
Geographical analysis of segmental operating profit from continuing
operations:-
United Kingdom 286.5 191.4 589.4
International 19.3 19.0 33.3
305.8 210.4 622.7
4. Interest charged to cost of sales
Financial Services operating profit is stated after charging £44.8m (last half
year £53.9m) 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 half year was £71.2m (last half year £47.6m).
This half year, third party interest payable exceeds the amount charged to cost
of sales of Financial Services, and there is therefore no requirement to adjust
total operating profit. Last half year, there was an excess of £6.3m of third
party interest payable, which was added back to total operating profit.
5. Exceptional items
A. Profit / (loss) on sale of property and other fixed assets
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Profit on sale and leaseback - - 50.0
Other asset disposals (1) (0.2) (7.0) (8.8)
Profit / (loss) on sale of property and other fixed (0.2) (7.0) 41.2
assets
(1) Other asset disposals mainly relate to the disposal of UK stores.
B. Loss on sale / termination of operations
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Loss on sale / termination (2.9) (3.1) (102.8)
Goodwill previously written off - - (368.2)
(2.9) (3.1) (471.0)
Less provision made in 2001 1.4 3.1 104.3
Loss on sale / termination of operations (1.5) - (366.7)
The loss on sale / termination of operations in the current year is analysed as
follows:-
Continental Brooks
Europe Brothers Total
£m £m £m
Net closure costs (1.4) (1.5) (2.9)
Less provision made in 2001 1.4 - 1.4
Loss on sale / termination of operations - (1.5) (1.5)
6. Taxation
The taxation charge for the 26 weeks ended 28 September 2002 is based on an
estimated effective tax rate of 30% for the full year. Included in the tax
charge for the year ended 30 March 2002 is a credit of £13.2m which is
attributable to exceptional charges.
7. Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax,
minority interest and non-equity dividends of £194.4m (last half year £144.2m),
and on 2,302,949,000 ordinary shares (last half year 2,865,234,000), being the
weighted average number of ordinary shares in issue during the period ended 28
September 2002. The weighted average number of shares used in the calculation of
fully diluted earnings per ordinary share is 2,337,510,000 (last half year
2,880,103,000).
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 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:-
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
Earnings per share 8.4p 5.0p 5.4p
Loss / (profit) on sale of property and other fixed - 0.3p (1.5)p
assets
Loss on sale / termination of operations 0.1p - 12.4p
Adjusted earnings per share 8.5p 5.3p 16.3p
8. Dividend
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
Dividends on equity shares:
Ordinary - Interim dividend of 4.0p per share (last half year 3.7p 91.8 105.2 105.2
per share)
Ordinary - Final dividend of 5.8p per share last year - - 133.7
91.8 105.2 238.9
Dividends on non-equity shares:
B Share dividend at 3.32% 4.6 - -
96.4 105.2 238.9
The Directors have approved an interim dividend of 4.0p per share (last half
year 3.7p per share). This results in an interim dividend of £91.8m (last half
year £105.2m) which will be paid on 10 January 2003 to shareholders whose names
are on the Register of Members at the close of business on 15 November 2002. The
ordinary shares will be quoted ex dividend on 13 November 2002. Shareholders may
choose to take this dividend in shares or in cash.
9. Analysis of cash flow given in the cash flow statement
26 weeks ended 26 weeks ended Year ended
28 Sept 2002 29 Sept 2001 30 March 2002
£m £m £m
A. Decrease in working capital
(Increase) / decrease in stocks (87.0) 6.5 66.2
Decrease in customer advances 57.3 21.3 76.2
Increase in creditors 7.9 56.1 174.9
Other working capital movements 29.6 5.6 (44.5)
7.8 89.5 272.8
B. Capital expenditure and financial investment
Purchase of tangible fixed assets (129.9) (75.1) (285.7)
Sale of tangible fixed assets 20.5 51.7 455.6
Net purchase of fixed asset investments 1.6 (1.2) 6.1
(107.8) (24.6) 176.0
C. Acquisitions and disposals
Closure of operations (1.4) 11.5 122.2
Sale of subsidiaries (30.2) - 139.4
Repayment of loan by joint venture 2.2 - -
(29.4) 11.5 261.6
D. Financing
Debt financing as shown in movement of net debt (423.8) 101.7 1,031.7
Purchase of own shares (53.4) (49.3) (52.0)
Redemption of B shares (127.0) - (1,717.9)
Issue / redemption expenses - - (9.3)
Shares issued under employees' share schemes 6.5 2.7 17.3
(597.7) 55.1 (730.2)
10. Date of approval
The interim financial statements for the 26 weeks to 28 September 2002 were
approved by the Board on 4 November 2002.
This information is provided by RNS
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