Interim Results
Mothercare PLC
18 November 2004
18 November 2004
Mothercare plc
Interim Results for the 28 weeks ended 9 October 2004
Key financials
• Total sales up 2.5% to £243.2 million (2003: £237.3 million)
• Like-for-like UK store sales up 2.4%* (2003: up 6.4%)
• Gross margins up 2.0 percentage points (2003: up 5.9pp)
• Operating profit, before exceptional items of £nil (2003: £0.8 million),
up 15% to £10.0 million (2003: £8.7 million)
• Profit before tax £10.9 million (2003: £13.4 million)
• Basic earnings per share 10.8p (2003: 20.0p)
• Earnings per share (before exceptional items) 10.8p - see note 6 (2003:
13.1p). The current period is after a tax charge of £3.5 million (2003: nil)
which equates to 5.2p per share (2003: nil p per share)
• Interim dividend 2.7p (2003: nil)
• Net cash balances of £41.4 million (2003: £28.4 million)
*See financial review for definition of like-for-like
Operational highlights
• Further progress on key turnaround projects
- Store proposition:- 81 out of 163 high street stores refitted by 9
October; they continue to outperform the chain
- Product and sourcing:- further improvements to design, quality and
fashionability of product
- Supply chain:- distribution costs reduced to 6.3% of sales with
availability above 80%
- Infrastructure:- new EPOS system developed, tested and rolled out to 14
stores by 9 October
- Customer service:- new staff training schemes and career development
framework launched
• Growth stage underway
- New distribution strategy determined to create capacity for future
growth and to reduce longer-term distribution costs
- New store successfully opened in Thurrock with two further new stores
to be opened in November
- 12 new international stores opened taking total to 200 in 31 countries
Current trading
• Like-for-like UK store sales for the five weeks to 12 November 2004 were
up 0.5%
Commenting on the results, Ben Gordon, chief executive said:
'We are now half way through our three year turnaround programme and our
recovery remains very much on track. During the half, like-for-like UK store
sales were up 2.4% and gross margins up 2.0 percentage points. The product range
has been revamped, a new pricing architecture is delivering greater value to our
customers, the store refit programme is progressing well and we have commenced a
new store opening programme for the first time in two years.
We have made good progress with our recovery programme and are well placed with
our plans to deliver sustainable growth.'
Enquiries to:
Mothercare plc
Ben Gordon, Chief Executive 01923 206140
Steven Glew, Finance Director
Brunswick Group LLP
Susan Gilchrist/Catherine Hicks/Chi Lo 020 7404 5959
CHIEF EXECUTIVE'S REVIEW
In May 2003 we outlined a three year turnaround programme with the objective of
rebuilding Mothercare and progressing plans for longer-term growth.
We are now half way through the programme and are pleased with the progress we
have made. Operating profit before exceptional items increased 14.9% to £10.0
million for the period. In the first half year like-for-like UK store sales
increased by 2.4%, whilst gross margins increased during that period by 2.0
percentage points.
We have commenced our growth plans, opening an additional 12 international
stores. In the UK we opened a new store in Thurrock and have progressed our
plans for further UK store openings.
A key element of the turnaround has been to review and determine the supply
chain we need to enable Mothercare to achieve its full potential. The new
distribution strategy, announced today, comprises moving the bulk of the
operation to a new distribution centre, located adjacent to the existing
facility. Further details are provided below.
TURNAROUND
Our plan to rebuild the business is focussed on five key projects: store
proposition, product and sourcing, supply chain, infrastructure and customer
service.
Store proposition
By the end of the half year we had completed the refit of 81 out of 163 high
street stores. This equates to 53% of high street space. The programme involves
improving both the store environment and the merchandise mix. The refitted
stores continue to perform well, achieving sales growth of some 8% above the
average of non-refitted high street stores and generating a cash return on
investment on an annualised basis in excess of 20%. The 11 stores now in their
second year since refit also continue to produce good levels of sales growth
above the high street average.
We aim to complete our high street refit programme in the next financial year. A
key objective is to ensure we continue to achieve our target returns from this
investment. We therefore anticipate that of the remaining stores to be refitted,
some will be completed at a reduced level of spend. There will also be a number
of stores not refitted which will either be closed or replaced with new stores
of a better size or location.
Our 69 out-of-town stores continue to perform well as they benefit from the
improvements in our customer offer and the progress with other turnaround
projects. However, there are opportunities to further improve their performance,
and with the high street programme well underway, we have now commenced the
trial refit of a selection of out-of-town stores.
Product and sourcing
The substantial improvements we have made to the design, quality, fashionability
and price of our product ranges have repositioned our product offer. We now
trade successfully at the fashionable end of our market in addition to our core
strengths in the basic sectors. We are also continually introducing new products
and new ranges to our offer to extend our markets. These include special
premature ranges introduced this year and our new gifting and first bedroom
ranges to be launched in the coming months.
The success of these initiatives is demonstrated by our customers purchasing
more added value items, which has raised our average selling price by some 5% in
the period, whilst like-for-like product prices have shown net deflation.
The fact that we have grown our gross margins in the period by 2.0 percentage
points whilst reducing like-for-like selling prices reflects the progress we
have made with our sourcing initiatives. We are now sourcing product from better
factories, and fewer suppliers and countries. Some 30% of our clothing is
sourced directly, and our target continues to be to increase this to 50%. This
programme is underway, gradually increasing the benefit to gross margin over a
three to five year timescale.
Supply chain
We have made significant progress over the past two years with initiatives to
improve product availability and the efficiency of our current distribution
operation. Availability is now over 80% and distribution costs, as a percentage
to sales, have reduced to 6.3% compared to 6.5% for the first half of last year.
However, it is clear that our existing logistics network is ineffective and
inefficient and is a major constraint on our ability to fulfil our business
potential. It impacts the volume of product we can distribute effectively and
limits the availability levels we can achieve.
Looking to the longer term we conducted a detailed analysis of our logistics
requirements, taking account of planned business growth and the service levels
our customers demand. We concluded that Mothercare should move the majority of
its distribution activity to a newly constructed, bespoke 300,000 square foot
warehouse. This will become our National Distribution Centre (NDC) and form the
hub of our network. This new NDC will be complemented by retaining an area of
our existing distribution warehouse in Daventry, which is ideal for hanging
goods, along with retaining our existing specialist warehouse for our Direct
operation. All of these facilities will be operated by our logistics partner
Exel. The new NDC is to be on the same logistics park as our existing Daventry
warehouse in the transportation hub of the Midlands.
This distribution solution gives us flexibility for the future as we continue to
grow. The retention of part of the existing Daventry warehouse, will enable a
lower risk transfer of operations.
The new NDC will be operational from mid 2005, when construction will be
complete and we plan to move our operations gradually into it over the following
12 - 18 months. We anticipate the move to the new NDC will incur some £7 million
of capital expenditure, principally relating to the fit out of the new facility,
and some £6 million of operating exceptional costs mainly the one-off additional
revenue costs related to the move. This investment will provide returns in terms
of lowering distribution costs towards our target of 5.0% of sales over the next
3-5 years, together with improved availability and the expected resultant sales
increase. Over the next 18 months we would anticipate our distribution operating
costs increasing marginally as a percentage to sales as we focus on ensuring the
move proceeds smoothly.
Infrastructure
A key element in the improvement of our infrastructure has been the replacement
of our EPOS system. The new EPOS system, in addition to providing us with Chip
and Pin capability, allows us to provide a higher level of customer service
through reduced transaction time and increases our customer information and
financial controls. The system has been successfully trialled and at the end of
the half year had been rolled out to 14 stores. We plan to roll the system out
to all stores by March 2006.
Customer service
The delivery of excellent customer service is vital to the success of
Mothercare. As a speciality retailer, customer service is a key differentiator
and an opportunity to gain real competitive advantage.
We have taken the deliberate decision to upgrade the quality of service and
expertise provided by our store staff. This has included the introduction of
structured training programmes in product knowledge and commercial selling and,
for the first time, a formalised training programme to develop experts on
specific product categories in each store, all linked to staff rewards. While
this will lead to an increase in our store payroll costs in the short term, it
is a crucial element in delivering the quality of customer service we need to
provide.
LONG-TERM GROWTH
We are now moving into the long-term phase of our new plans. The decision to
address our distribution network is a vital element in providing the platform
for successful growth. This decision has been carefully thought through and we
are pleased to have identified a solution which will provide flexibility for the
future whilst addressing the limitation of our existing network.
The growth phase includes a focus on new store development and our International
and Direct businesses, to help drive long-term growth.
New store development
Our store portfolio review identified about 40 further high street and 20
out-of-town locations where Mothercare could successfully trade.
In August we opened our first new out-of-town store in more than two years at
Thurrock Lakeside, Essex. This store is trading successfully and exceeding its
targets. In November 2004 we open two further stores - a high street store in
Wandsworth opened on 13 November and an out-of-town store in Sheffield will open
on 20 November. The early signs are that we can roll out a store opening
programme which achieves our target returns and can deliver some 5-10 new stores
per annum.
International
Our International franchise business continues to grow. The business is
benefiting from the improvements we are making in product quality, design and
availability and its performance demonstrates the popularity of the Mothercare
brand overseas, resulting in franchisee like-for-like sales being up 10% and
Mothercare sales to franchisees up 17%.
During the first half our franchise partners opened 12 new stores bringing the
total to 200, including our first stores in the Ukraine and Romania. The strong
relationship we have developed with our franchisees has been a key factor in
progressing the joint potential of our businesses. With our franchisees we have
identified the potential for some 100 new stores over the next three to four
years. A further 18 are currently scheduled to open in the second half of this
financial year, including our 30th store in Greece.
Direct
Our Direct business continues to make progress, with a substantial improvement
in profitability. Reported sales are down 1.8%, but this figure does not include
products ordered at stores for home delivery. Adjusted for this figure Direct
sales are up some 10%.
Mothercare provides an integrated multi-channel approach to our customers who
can order product at home, by telephone or internet, and in-store using the
internet and these channels are serviced by our Direct infrastructure. We
continue to see substantial capability for this business to grow both internet
and catalogue sales - particularly for bigger ticket items, which may not be
featured in our smaller stores.
CURRENT TRADING
UK store like-for-like sales for the five weeks to 12 November 2004 were up
0.5%.
In future, in line with best practice, we will provide trading updates on a
quarterly basis only. No statement on current trade will be made with the
interim or preliminary results.
The normal timetable will be as follows:
Quarter 1 July (AGM)
Quarter 2 October (Pre close update)
Quarter 3 January (Christmas)
Quarter 4 April (Pre close update)
FINANCIAL REVIEW
RESULTS SUMMARY
Total group sales have increased by 2.5% to £243.2 million (2003: £237.3
million) with like-for-like UK store sales up by 2.4%. Operating profit before
exceptional items improved by 14.9% from £8.7 million last year to £10.0 million
this year.
The results can be summarised as follows:
Turnover (ex VAT) Operating profit
28 weeks to 28 weeks to
9 October 11 October 9 October 11 October
2004 2003 2004 2003
£m £m £m £m
UK Stores 204.6 202.8 5.2 4.8
Mothercare Direct 9.1 9.3 0.8 0.6
---------- --------- --------- ---------
Total UK 213.7 212.1 6.0 5.4
Mothercare
International 29.5 25.2 4.0 3.3
---------- --------- --------- ---------
Operating
profit (before
exceptional
items) 243.2 237.3 10.0 8.7
========== =========
Exceptional
operating items - 0.8
--------- ---------
Operating profit 10.0 9.5
Non-operating
exceptional
items - 3.8
Interest 0.9 0.1
--------- ---------
Profit before tax 10.9 13.4
Taxation (3.5) -
--------- ---------
Profit after tax 7.4 13.4
========= =========
Earnings per share 10.8p 20.0p
========= =========
Divisional Performance
UK Stores
UK store sales increased by 0.9% to £204.6 million. Like-for-like sales (defined
as sales growth on the previous year for stores that have been trading
continuously from the same selling space for at least 13 financial periods)
increased by 2.4%. The sales loss due to net store closures was 1.5%. Of the 10
store closures announced with our results in May, two were closed in the first
half year.
Operating profit (before exceptional operating items) increased by 7.8% to £5.2
million (2003: £4.8 million).
Mothercare Direct
Mothercare Direct sales have reduced by 1.8% to £9.1 million. However operating
profit grew by 43.7% to £0.8 million. This business has benefited from the
margin growth achieved across the business.
The Direct business is becoming more closely interrelated with our UK Stores
business as we roll out web enabled stores which allow customers to order
product from Mothercare Direct in store. Separating out the profitability of
this business is becoming less meaningful and we therefore do not plan to report
its profit performance separately in the future.
Mothercare International
Mothercare International, our overseas franchise business, performed well with
sales growing by 16.7% to £29.5 million and operating profit growing 19.7% to
£4.0 million. Twelve new franchise stores were opened in the first half taking
the total to 200.
Operating profit
Operating profit was £10.0 million, an increase of £0.5 million over the first
half of last year. The operating profit, before exceptional operating items,
increased 14.9% to £10.0 million (2003: £8.7 million).
Gross margin increased by 2.0 percentage points to 48.9%. The improvements in
our product range and the early benefits of our sourcing initiatives played a
major role in this improvement.
The gross margin in the first half has benefited from a number of timing
differences in relation to last year which will reverse in the second half year.
Distribution costs reduced from 6.5% of sales for the first half of last year to
6.3% of sales for the first half of this year.
Exceptional items
There were no exceptional items in the first half of the year (2003: £4.6
million). However subsequent to the end of the first half we have disposed of a
subsidiary undertaking with capital tax losses attached for £2.4 million net of
costs. This amount will show as an exceptional item in the second half.
Interest and taxation
Net interest income increased to £0.9 million (2003: £0.1 million) as a result
of the higher average cash balances resulting from the positive cash flow of the
business.
Due to the tax losses we have brought forward no tax will actually be paid for
the year. The tax charge of £3.5m, representing an effective tax rate of 33%,
reflects utilisation of these losses in respect of which a deferred tax asset
was established at the end of last year.
Balance sheet and cash flow
The group had a net cash inflow of £1.1 million in the period, leading to the
cash balance at the end of the half year of £41.4 million (2003: £40.3 million).
Capital expenditure for the period was £10.3 million (2003: £2.3 million), of
which the cost of our high street store refurbishment programme was £5.4
million. We now anticipate that capital expenditure for the full year will be
some £23 million. This includes the continuation of the high street store refit
programme and the continued roll out of our EPOS programme. The total for the
year will also include the trial of our out-of-town refit programme together
with the cost of the three new stores opened in the year.
Earnings per share and dividend
Basic earnings per share are 10.8 pence for the period (2003: 20.0 pence).
Earnings per share before exceptional items are 10.8 pence (2003: 13.1 pence).
The current period is after a tax charge of £3.5 million (2003: £nil) which
equates to 5.2 pence per share (2003: nil pence per share).
The directors are pleased to declare an interim dividend of 2.7 pence. This will
be paid on 11 February 2005 to shareholders on the register at the close of
business on 7 January 2005. The shares will trade ex-dividend from 5 January
2005.
Preliminary announcement of unaudited results
GROUP PROFIT STATEMENT
For the 28 weeks ended 9 October 2004 (2003 - 28 weeks ended 11 October 2003)
28 weeks ended 11 October 2003
--------------------
Before Exceptional
28 weeks ended exceptional items 52 weeks ended
9 October 2004 items (note 2) Total 27 March 2004
Note £ million £ million £ million £ million £ million
---------------- ---- ---------- -------- -------- ------- ----------
Turnover 243.2 237.3 - 237.3 446.9
---------------- ---- ---------- -------- -------- ------- ----------
Profit from
retail
operations 10.0 8.7 0.8 9.5 16.6
Exceptional
items 2 - - 3.8 3.8 6.6
Interest (net) 3 0.9 0.1 - 0.1 0.7
---------------- ---- ---------- -------- -------- ------- ----------
Profit before
taxation 10.9 8.8 4.6 13.4 23.9
Taxation 2, 4 (3.5) - - - 7.3
---------------- ---- ---------- -------- -------- ------- ----------
Profit after
taxation 7.4 8.8 4.6 13.4 31.2
-------- --------
Dividends 5 (1.8) - (2.7)
---------------- ---- ---------- ------- ----------
Retained profit 5.6 13.4 28.5
---------------- ---- ---------- -------- -------- ------- ----------
Dividend per
share 5 2.7p 0.0p 4.0p
Earnings per
share before
exceptional
items 10.8p 13.1p 24.4p
Basic earnings
per share 6 10.8p 20.0p 46.5p
Earnings per
share diluted 6 10.6p 19.8p 45.7p
---------------- ---- ----------- -------- -------- -------- ----------
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
restated *
£ million £ million £ million
----------------------------- ---------- ----------- -----------
Profit for the financial period 7.4 13.4 31.2
Dividends (1.8) - (2.7)
New share capital subscribed 0.9 0.2 0.8
Acquisition of own shares - - (0.2)
Cost of employee share schemes
charged to profitand loss account 0.8 0.4 0.9
----------- ----------- ----------
Movement in shareholders' funds 7.3 14.0 30.0
----------------------------- ---------- ----------- -----------
Opening shareholders' funds
as previously stated 135.7 110.6 110.6
Prior year adjustment - (5.0) (4.9)
----------------------------- ---------- ----------- -----------
Opening shareholders' funds
as restated 135.7 105.6 105.7
----------------------------- ---------- ----------- -----------
Closing shareholders' funds 143.0 119.6 135.7
----------------------------- ---------- ----------- -----------
* Comparative figures for the 28 weeks ended 11 October 2003 have been restated
as detailed in note 9.
GROUP BALANCE SHEET
9 October 2004 11 October 2003 27 March 2004
restated *
Note £ million £ million £ million
------------------------- ------ --------- ----------- -----------
Fixed assets
Tangible assets 84.7 80.3 81.3
------------------------- ------ ---------- ----------- -----------
Current assets
Stocks 45.9 44.2 45.0
Debtors 33.2 27.4 34.0
Cash at bank and in hand 41.4 28.4 40.3
Creditors - amounts
falling due within one year 7 (58.9) (56.3) (60.1)
------------------------- ------ ---------- ----------- -----------
Net current assets 61.6 43.7 59.2
------------------------- ------ ---------- ----------- -----------
Total assets less
current liabilities 146.3 124.0 140.5
Creditors - amounts
falling due after more
than one year 7 (0.8) (1.6) (1.2)
Provisions for
liabilities and charges 8 (2.5) (2.8) (3.6)
------------------------- ------ ---------- ----------- -----------
Net assets 143.0 119.6 135.7
------------------------- ------ ---------- ----------- -----------
Capital and reserves
attributable to equity
interests
Called up share capital 35.8 35.3 35.5
Share premium account 1.2 0.2 0.6
ESOP reserve (3.4) (4.6) (4.2)
Profit and loss account 109.4 88.7 103.8
------------------------- ------ ---------- ----------- -----------
143.0 119.6 135.7
---------- ----------- -----------
* Comparative figures for the 28 weeks ended 11 October 2003 have been restated
as detailed in note 9.
GROUP CASH FLOW STATEMENT
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
£ million £ million £ million
------------------------------ ---------- ----------- ----------
Reconciliation of net cash flow
from operating activities
Profit from retail operations
before exceptional items 10.0 8.7 15.8
Depreciation 6.4 6.1 13.0
Reversal of past
impairment losses - - (1.1)
Loss on disposal of
tangible fixed assets 0.5 - 0.9
Cost of employee share
schemes 0.8 0.4 0.9
Working capital (4.9) 8.1 8.0
Exceptional items (1.0) (0.4) (0.4)
------------------------------ ---------- ----------- ----------
Net cash flow from
operating activities 11.8 22.9 37.1
Returns on investments
and servicing of finance 0.9 0.1 0.7
Taxation - - -
Capital expenditure (10.3) (2.3) (7.1)
------------------------------ ---------- ----------- ----------
Trading cash flow 2.4 20.7 30.7
Acquisitions and disposals 0.5 - 1.3
Equity dividends paid (2.7) - -
------------------------------ ---------- ----------- ----------
0.2 20.7 32.0
Management of liquid
resources 10.0 - (30.0)
Financing 0.9 - 0.6
------------------------------ ---------- ----------- ----------
Increase in cash in the
period 11.1 20.7 2.6
------------------------------ ---------- ----------- ----------
Reconciliation of net cash flow to movement in net funds
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
£ million £ million £ million
------------------------- ---------- ----------- ----------
Increase in cash in the
period 11.1 20.7 2.6
Cash flow from management
of liquid resources (10.0) - 30.0
------------------------- ---------- ----------- ----------
Movement in net funds in
the period 1.1 20.7 32.6
Net funds at the beginning
of the period 40.3 7.7 7.7
------------------------- ---------- ----------- ----------
Net funds at the end of the
period 41.4 28.4 40.3
------------------------- ---------- ----------- ----------
Analysis of net cash
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
£ million £ million £ million
------------------------- ---------- ----------- ----------
Cash at bank and in hand 21.4 28.4 10.3
Time deposits 20.0 - 30.0
------------------------- ---------- ----------- ----------
41.4 28.4 40.3
------------------------- ---------- ----------- ----------
Notes
1 Accounting policies
This interim report has been prepared under the historic cost convention as in
previous years and on the basis of the accounting policies set out in the group
financial statements for the 52 weeks ended 27 March 2004.
UITF 38 'Accounting for ESOP trusts' was adopted during the prior year as fully
detailed in the group financial statements for the 52 weeks ended 27 March 2004.
Comparative figures for the 28 weeks ended 11 October 2003 have been restated
accordingly, as detailed in note 9.
2 Exceptional items
In the 28 weeks ended 9 October 2004, no exceptional items have been recorded.
In the 28 weeks ended 11 October 2003 and the 52 weeks ended 27 March 2004,
profit from retail operations included an exceptional credit of £0.8 million
relating to VAT, principally arising from the successful outcome of an
outstanding VAT claim.
In the 28 weeks ended 11 October 2003, non-operating exceptional items credited
to profit before taxation amounted to £3.8 million. These comprised the release
of a prior year provision of £2.6 million no longer required following the early
surrender of the lease of a vacant property and a lease premium of £1.2 million
received on the sale of the lease of a store.
In the 52 weeks ended 27 March 2004, exceptional items credited to profit before
taxation amounted to £6.6 million and comprised the two items above and the
following additional items.
Lease premiums of £1.3 million received and receivable on the sale of leases of
a further three stores offset by a charge of £0.5 million to provide for the
loss on disposal of another two stores.
A profit on disposal of one of the group's subsidiary undertakings with capital
tax losses attached of £2.0 million.
The tax effect of all the above exceptional items was £nil.
In the 52 weeks ended 27 March 2004, an exceptional tax credit of £7.3 million
was recorded, £6.4 million of which related to the creation of a deferred tax
asset in respect of carried forward tax losses following the group's return to
profitability and £0.9 million of which reflected the release of a brought
forward provision for corporation tax which was no longer required.
Notes (continued)
3 Interest (net)
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
£ million £ million £ million
------------------------- ---------- ----------- ----------
Interest payable (0.1) (0.1) (0.2)
Interest receivable 1.0 0.2 0.9
------------------------- ---------- ----------- ----------
0.9 0.1 0.7
------------------------- ---------- ----------- ----------
4 Taxation
The tax charge comprises entirely of deferred tax and is calculated at 33 per
cent (2003: nil per cent) being the estimated effective rate of tax on the
expected result for the 52 weeks ending 26 March 2005.
A deferred tax asset of £6.4 million was recognised for tax losses carried
forward at 27 March 2004, after taking account of any deferred tax liabilities,
as the directors were of the opinion that it was more likely than not that the
benefit of the tax losses would be realised. This deferred tax asset has reduced
to £2.9 million at 9 October 2004 reflecting utilisation of these losses against
profits in the period. The group had tax losses carried forward of approximately
£29 million as at 9 October 2004 (2003: approximately £39 million).
5 Dividends
The interim dividend of 2.7 pence (2003: nil pence) per ordinary share will cost
£1.8 million (2003: £nil). The dividend will be paid on 11 February 2005 to
ordinary shareholders on the register at the close of business on 7 January
2005.
6 Earnings per share
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
------------------------- ---------- ---------- -----------
Weighted average number of
shares in issue 67.8m 67.2m 67.3m
Dilution - option schemes 1.3m 0.5m 1.1m
------------------------- ---------- ----------- ----------
Diluted weighted average
number of shares in issue 69.1m 67.7m 68.4m
------------------------- ---------- ----------- ----------
Profit after tax £7.4m £13.4m £31.2m
Exceptional items (net of
tax) - (£4.6m) (£14.7m)
------------------------- ---------- ----------- ----------
Profit after tax before
exceptional items £7.4m £8.8m £16.5m
------------------------- ---------- ----------- ----------
Basic earnings per share 10.8p 20.0p 46.5p
Earnings per share before
exceptional items 10.8p 13.1p 24.4p
Diluted basic earnings per
share 10.6p 19.8p 45.7p
------------------------- ---------- ----------- ----------
The earnings per share before exceptional items has been calculated to provide
further information. It is calculated by dividing the profit after tax but
before exceptional items by the weighted average number of shares in issue.
Notes (continued)
7 Creditors - amounts falling due within one year and after one year
28 weeks ended 28 weeks ended 52 weeks ended
9 October 2004 11 October 2003 27 March 2004
£ million £ million £ million
------------------------- ---------- ----------- ----------
Amounts falling due within one year
Trade creditors 30.6 26.2 25.6
Proposed dividend 1.8 - 2.7
Corporation tax - 0.9 -
Payroll and other taxes,
including social security 2.1 3.0 1.2
Accruals and deferred income 23.0 24.9 28.8
Landlords' contributions 0.8 1.1 1.0
Other creditors 0.6 0.2 0.8
------------------------- ---------- ----------- ----------
58.9 56.3 60.1
------------------------- ---------- ----------- ----------
Amounts falling due after one year
Landlords' contributions 0.8 1.6 1.2
------------------------- ---------- ----------- ----------
8 Provisions for liabilities and charges
Property Other
provisions provisions Total
£ million £ million £ million
------------------------- ---------- ----------- ----------
Opening balance 2.6 1.0 3.6
Utilised in period (1.0) (0.3) (1.3)
Charged in period - 0.2 0.2
------------------------- ---------- ----------- ----------
Closing balance 1.6 0.9 2.5
------------------------- ---------- ----------- ----------
Property provisions principally represent the costs of store disposals. Other
provisions principally represent provisions for uninsured losses.
9 Restatement of 28 weeks ended 11 October 2003
The group adopted UITF Abstract 38 'Accounting for ESOP Trusts' in the group
financial statements for the 52 weeks ended 27 March 2004. This Abstract
requires companies to show shares owned by employee trusts as a deduction from
equity. These amounts had previously been shown as fixed asset investments. As a
consequence, the balance sheet as at 11 October 2003 has been restated to
conform to this Abstract. The adoption had no impact on the group's results for
the 28 weeks ended 11 October 2003 or in previous accounting periods.
This interim report was approved by the directors on 18 November 2004. Results
for the two half years have not been audited, but have been reviewed by the
auditors. The financial information contained in the interim accounts does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The full year comparatives were extracted from the full group accounts
which have been filed with the Registrar of Companies together with an
unqualified auditors' report. All shareholders will receive a copy of this
statement.
This information is provided by RNS
The company news service from the London Stock Exchange
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