TIDMMKS
RNS Number : 9035B
Marks & Spencer Group PLC
04 November 2009
Issued: Wednesday 4 November 2009
Marks and Spencer Group plc
Half Year Results 2009/10
26 weeks ended 26 September 2009
Half-year Results:
* Sales up 2.8% at GBP4.3bn: UK +1.8%; International +12.2%
* UK like-for-like sales -0.9%: General Merchandise -1.4%; Food -0.3%
* Operating profit1 GBP365.0m (last year GBP372.4m)
* Adjusted profit before tax1 GBP298.3m (last year GBP297.8m)
* Profit before tax GBP306.7m (last year GBP307.8m)
* Adjusted basic earnings per share 13.7p1 (last year 13.7p)
* Basic earnings per share 14.3p (last year 14.2p)
* Interim dividend 5.5p per share (last year 8.3p)
* Net cash inflow GBP69.7m
* Net debt GBP2.4bn (29 March 2009 GBP2.5bn)
1 Before property disposals
Sir Stuart Rose, Chairman, said:
"We are pleased with our first half performance. Our strong customer offer,
together with tight management of costs and margin, has allowed us to report a
profit slightly ahead of last year, despite a challenging economic environment.
We increased our share of the clothing market over the period, and our
performance in Food has also improved.
"We continue to focus on providing better than ever value for our customers, for
the all important Christmas period and into 2010. In the longer term we have
clear plans to deliver sustainable growth by driving international and
multi-channel, supported by the roll out of new supply chain and systems
platforms. Our positive cash flow and financial position gives us the capacity
to implement our plans.
"We have had a good start to the third quarter. However, the market remains
competitive and, as we come up against volatile trading conditions last year, we
remain cautious about the outlook for Christmas and the year ahead. We are
increasingly confident that customers recognise and trust our outstanding
quality, value and ethical stance."
We will update on our third quarter sales on 6 January 2010.
Chairman's review:
Over the last five years we have built strong foundations: introduced new
products, better values and increased innovation. We have also improved service,
broadened our multi-channel offer, expanded our international presence and
strengthened our property portfolio. We have made good progress in all areas to
ensure the business comes out of the downturn in the best possible shape.
The actions we have taken in the business over the last year to respond to the
challenging economic environment and the changing needs of our customers have
resulted in improved performance. Over the period we invested in margin,
controlled our costs and took steps to protect the strength of our balance
sheet. Group sales grew 2.8% to GBP4.3 billion. Adjusted profit before tax was
slightly ahead of last year at GBP298.3m. We generated net cash of GBP69.7m.
While the actions we have taken are right for the current environment, we
continue to invest for the future. Following a review of our strategy we
announced the launch of Project 2020 in May this year. The key objective of the
project is to create long-term sustainable growth in shareholder value by
putting the customer at the heart of everything we do and by accelerating
Multi-Channel and International.
This will build on the substantial investment made over the last three years in
our supply chain, information systems and improved operational execution. Over
the next 12 to 18 months this investment will start delivering the following
benefits:
* Cost efficiencies;
* Sales growth; and
* A new platform for growth in multi-channel and International.
We expect the work on cost efficiencies to deliver cash benefits of GBP250m per
annum by 2015/16, GBP175m of which will be delivered over the next three years.
In addition there is a big opportunity to drive sales through improved
operational execution, better availability, ranging and cataloguing.
General Merchandise
General Merchandise sales were up 1.7% and we maintained our position as
the UK's leading clothing retailer by value and volume. We increased our value
market share by 10 basis points to 10.1% and volume share was level at 10.5%.
(TNS: 24 weeks ended 13 September 2009). Gross margin was down 30 basis points
with better sourcing and tight controls over stock and markdown helping to
mitigate adverse currency pressures.
We continued to provide our customers with strong fashion trends and great
value, further developing our brands to deliver more clarity and newness across
our ranges.
Clearer brand segmentation has been a key area of focus. In Womenswear the
launch of 'Portfolio' and 'Indigo', complemented our existing offer and
broadened our customer base. In Menswear we launched a new designer
collaboration with Jsen Wintle in 'Autograph' and the demand for his GBP199 wool
coat has led us to double our initial order.
We made progress in areas of low market share. The launch of 'Indigo' in
Womenswear and the re-launched 'North Coast' in Menswear, have improved our
casualwear offer helping match our strength in formalwear. We are broadening our
footwear and accessories ranges to help customers refresh their wardrobe more
economically. This Autumn/Winter season has been our best ever season for boots
selling over 330,000 pairs to date. Market share in Kidswear has continued to
grow and we strengthened our number one position in schoolwear despite
aggressive discounting by the value retailers. Our sales in furniture and home
furnishings have held up well as we take share from specialist retailers in this
category. We opened two new standalone home stores.
We have made good progress with the younger customer. We have grown market share
in the '35 and under' segment, and attracted new customers with 'Limited
Collection' being an important driver. In Menswear new lines such as slimfit
shirts are proving popular with our younger customers.
Our values remain strong. Our price architecture has allowed customers to trade
up or down within our ranges, for example, from a GBP35 mac to a GBP199 100%
cashmere coat. The growth in our Lingerie market share is a good example of
excellent values across all price points allowing us to compete with both the
value retailers as well as upmarket brands.
Removing duplication and delivering better ranging to the customer remains a
priority. We have better integrated 'per una', and continue to work on
refreshing the designs and eliminating any duplication with our other brands. We
are targeting a 10% reduction in the number of ways across General Merchandise,
and providing our customers with real choice.
Food
Food sales were up 1.8%. We have now delivered four consecutive quarters of
improved like-for-like sales. Market share declined from 3.7% to 3.5% (TNS Food
& Drink: 24 weeks ended 9 October 2009). Food gross margin was down 65 basis
points reflecting planned investment in prices and increased promotional
activity, offset by better buying and a reduction in food waste.
We have been building on the progress made last year in offering our customers
better value by re-aligning our prices through margin investment and
the introduction of Wise Buy products. We are now cheaper than Waitrose on a
basket of 1,200 like products (source: MySupermarket 30 October 2009), and have
narrowed the gap between us and the rest of the market.
Promotions remain a key tool in ensuring our customers recognise our great
values and in driving additional footfall into the store. Our 'Dine in for two
for GBP10' promotion sold 4.5m meals in the half and we are now complementing
this success with more everyday dining deals for GBP5 such as the 'Pizza Meal
Deal'. We have been able to target our promotions better to the different
customer types - our regular customers have responded well to multi-buy meal
deals, such as the '3 for GBP10' on Meat and Fish, while our occasional
customers have reacted better to price reductions such as selected desserts for
GBP1.
We have increased the level of innovation. During the half we extended our
successful 'Cook 1234 Asian' concept to Indian food. Together with our new 'One
pot casserole' range, and a re-launched 'Cook Menu', we are strengthening our
position as a market leader in home cooking solutions. We re-launched our
confectionary shop with 40 new lines giving us more authority in this category.
Going forward we are targeting 25% newness each year, and will have over 1,000
new lines in store this Christmas. We have a strong pipeline of exciting new
products launching in the New Year.
We continued to fill the gaps in our existing ranges, such as the introduction
of Danish bacon to complement our existing British bacon offer, and new cuts of
meat such as lamb shoulder and pork belly.
Introducing key brands is another important part of filling these gaps, and
following a trial over the last year we have announced a rollout of branded
offer to all stores. These 400 branded products complement our own label and are
primarily focussed on low market share areas such as laundry, personal care,
beer and pet food. They will allow us to meet more of our customers' regular
shopping needs. We will intensify the existing store space to accommodate the
additional line, without losing any of the existing M&S ranges. Prices will be
matched against the competition, highlighting to our customers that we can
deliver branded products at competitive prices, as well as demonstrating the
fantastic value of M&S own label products.
We have implemented a number of initiatives to deliver improved product
availability and reduce waste. The implementation of a new planning and ranging
system over the next two years will drive further improvements.
Multi-channel
Sales from our website were up 29%, outperforming the on-line clothing market.
Our on-line clothing market share increased to 4.8% from 4.2% (Fashiontrak). The
traffic to the site grew by 30% over the half.
We recently completed a full refresh of our website. We have improved the user
experience through added functionality, enhanced the look and feel of the pages,
improved ease of navigation and clarity of our on-line offer. We are using more
inspirational and educational video formats, such as M&S TV, which are becoming
increasingly important in customer purchasing decisions. The new site has been
ranked the most user friendly retail website according to a recent Webcredible
annual study (last year 8th). Our customers have reacted positively to the new
design and features and conversion has increased since the re-launch.
Our product availability and order fulfilment continue to improve. In July we
replaced our old in-store ordering system, with a new click and collect service
called 'Shop your Way'. The new service allows customers to order either at home
or in store and have merchandise delivered to any location. It is now available
in 166 stores, and a full roll out to all stores is planned after Christmas. The
new service is proving very popular with customers - last week alone over GBP1m
of GM orders were placed using the system.
International
Our International business had a strong first half with revenues up 12.2%, and
profits up 21.1% to GBP65.9m. Driving our international business remains a key
part of our strategy and we now have 315 stores in 41 territories.
In Ireland we responded to the continued weakness in the local economy by
reducing our selling prices in General Merchandise by 12% on average in July,
which has driven volumes up. We continue to grow our Central and Eastern
European ventures with seven new store openings across Estonia, Greece, Poland,
Slovakia and Serbia.
In India, we opened a further two stores with Reliance Retail. We remain on
track to open over 10 stores, representing around 200,000 sq ft, within the next
two years. Our first store in mainland China, in Shanghai, has been trading for
a year, and is now performing in line with our plans.
Our franchise business performed well and remains an integral part of driving
our International growth. We opened 12 new stores in Russia, Cyprus, Turkey, UAE
and Qatar.
Supply Chain and IT
We have moved forward with our plans to restructure our supply chain and
implement new IT systems. In supply chain we have now closed 21 warehouses as
part of our longer term plan to consolidate our GM operations into four large
warehouses within the UK. The first of these four warehouses, in Bradford, is
under construction and is on schedule to open in 2010.
We have restructured arrangements with several third party logistics operators.
In GM we changed our furniture delivery provider to Wincanton. In Food our new
contract with GIST is on track to deliver the anticipated GBP20m full year
savings by 2011/2012. In total, distribution costs in the first half were GBP13m
lower than last year, ahead of our full year target of GBP30m of underlying
savings.
We have also moved forward with direct sourcing and distribution in
International, whereby product is sourced and distributed in region rather than
via the UK. In total 16% of product is now distributed directly with particular
focus on territories such as India.
The overhaul of our IT systems increased in pace over the half year and is
entering a critical period of step change over the next two years. We are making
good progress in replacing Point of Sale system within stores; the pilot in
Maidenhead is performing well and we will roll out to all stores from early
2010. Following its successful implementation in finance, non-merchandise
procurement and within International, we will begin implementation of SAP within
our core commercial systems in the UK in early 2010, with a phased roll out
through to 2012. In HR we have outsourced our payroll and will implement new
time and attendance and labour scheduling systems over the next couple of years.
Plan A
We launched Plan A, our GBP200m 100 point eco-plan in January 2007. Nearly three
years later Plan A is profit positive and 53 of our 100 commitments are ahead of
plan. Despite the global economic uncertainty, the business case for Plan A
continues to strengthen. As well as delivering significant benefits for our
business, stakeholders and the environment, Plan A is changing consumer
behaviour.
We continue to make significant progress on the commitments set out in the plan.
Highlights over the past six months include M&S becoming the world's first
retailer to purchase Green Palm certificates to cover its entire palm oil usage;
store and head office staff raising GBP2.5million for hundreds of local
charities, and food waste being returned for processing into energy at three of
our seven food depots.
We now have over 175,000 customers benefiting from saving energy with M&S
Energy, we're saving hundreds of millions of carrier bags every year as our food
customers turn to re-usable bags, and over a million people have received
money-off vouchers in return for recycling clothes at Oxfam.
Current trading and outlook
We have had a good start to the third quarter. However, the market remains
competitive and, as we come up against volatile trading conditions last year, we
remain cautious about the outlook for Christmas and the year ahead. We are
increasingly confident that customers recognise and trust our outstanding
quality, value and ethical stance.
Financial Review
+---------------------------------+---------+---------+--------+
| Summary | 26 weeks ended | |
| of | | |
| Results: | | |
+---------------------------------+-------------------+--------+
| | 26 | 27 | % inc |
| | Sept | Sept | |
| | 09 | 08 | |
| | GBPm | GBPm | |
+---------------------------------+---------+---------+--------+
| Group | 4,335.8 | 4,219.6 | +2.8 |
| revenue | | | |
+---------------------------------+---------+---------+--------+
| UK | 3,890.6 | 3,822.9 | +1.8 |
+---------------------------------+---------+---------+--------+
| International | 445.2 | 396.7 | +12.2 |
| | | | |
+---------------------------------+---------+---------+--------+
| | | | |
+---------------------------------+---------+---------+--------+
| Operating | 365.0 | 372.4 | -2.0 |
| profit | | | |
| before | | | |
| property | | | |
| disposals | | | |
+---------------------------------+---------+---------+--------+
| UK | 299.1 | 318.0 | -5.9 |
+---------------------------------+---------+---------+--------+
| International | 65.9 | 54.4 | +21.1 |
| | | | |
+---------------------------------+---------+---------+--------+
| | | | |
+---------------------------------+---------+---------+--------+
| Profit | 298.3 | 297.8 | +0.2 |
| before | | | |
| tax | | | |
| and | | | |
| property | | | |
| disposals | | | |
| | | | |
+---------------------------------+---------+---------+--------+
| Profit | 8.4 | 10.0 | -16.0 |
| on | | | |
| property | | | |
| disposals | | | |
+---------------------------------+---------+---------+--------+
| Profit | 306.7 | 307.8 | -0.4 |
| before | | | |
| tax | | | |
+---------------------------------+---------+---------+--------+
| | | | |
+---------------------------------+---------+---------+--------+
| Adjusted | 13.7p | 13.7p | - |
| EPS | | | |
+---------------------------------+---------+---------+--------+
| Dividend | 5.5p | 8.3p | -33.7 |
| per | | | |
| share | | | |
| (declared) | | | |
+---------------------------------+---------+---------+--------+
Group revenue
Revenue growth by area, by period in the UK was:
+-------------+--------+--------+--------+
| Total | Q1% | Q2% | H1% |
| revenue | | | |
+-------------+--------+--------+--------+
| Clothing | 1.4 | 2.7 | 2.1 |
+-------------+--------+--------+--------+
| Home | 0.1 | -1.8 | -0.6 |
+-------------+--------+--------+--------+
| General | 1.2 | 2.2 | 1.7 |
| Merchandise | | | |
+-------------+--------+--------+--------+
| Food | 2.0 | 1.7 | 1.8 |
+-------------+--------+--------+--------+
| Total | 1.7 | 1.9 | 1.8 |
+-------------+--------+--------+--------+
+--------------------------+--------------+------------+------------+
| Like-for-like revenue | | | |
+--------------------------+--------------+------------+------------+
| General Merchandise | -2.4 | -0.8 | -1.4 |
+--------------------------+--------------+------------+------------+
| Food | -0.5 | 0.0 | -0.3 |
+--------------------------+--------------+------------+------------+
| Total | -1.4 | -0.5 | -0.9 |
+--------------------------+--------------+------------+------------+
UK revenues were up 1.8%, with a like-for-like decline of 0.9%. During the half,
we added 3.9% of space, on a weighted average basis: 4.5% in General Merchandise
and 2.8% in Food.
International revenues were up 12.2%. This performance reflected new store
openings within our owned businesses and the continued growth of our franchise
business.
Operating profit
Operating profit before property disposals was GBP365.0m, down 2.0%.
In the UK, operating profit before property disposals was down 5.9% at
GBP299.1m. Gross margin was 50 basis points down on the year at 41.7%. General
Merchandise gross margin was down 30 basis points at 53.1%. Better sourcing and
supply chain management, as well as tight control over stock and markdowns, has
enabled us to mitigate pressure from the weakness of sterling. Food gross margin
was 65 basis points lower than last year at 31.4%, reflecting investment in
prices and increased promotional activity, partly offset by better buying and a
reduction in food waste.
UK operating costs before bonus were up 0.4% to GBP1,311.7m:
+--------------+---------+---------+--------+
| | 26 weeks ended | |
+--------------+-------------------+--------+
| | 26 | 27 | % inc |
| | Sept | Sept | |
| | 09 | 08 | |
| | GBPm | GBPm | |
+--------------+---------+---------+--------+
| Retail | 406.8 | 400.1 | +1.7 |
| staffing | | | |
+--------------+---------+---------+--------+
| Retail | 469.6 | 449.2 | +4.5 |
| occupancy | | | |
+--------------+---------+---------+--------+
| Distribution | 186.9 | 199.9 | -6.5 |
+--------------+---------+---------+--------+
| Marketing | 57.5 | 66.0 | -12.9 |
| and | | | |
| related | | | |
+--------------+---------+---------+--------+
| Support | 190.9 | 191.4 | -0.3 |
+--------------+---------+---------+--------+
| Total | 1,311.7 | 1,306.6 | +0.4 |
| before | | | |
| bonus | | | |
+--------------+---------+---------+--------+
| Bonus | 30.0 | 2.7 | |
+--------------+---------+---------+--------+
| Total | 1,341.7 | 1,309.3 | +2.5 |
| including | | | |
| bonus | | | |
+--------------+---------+---------+--------+
Retail staffing costs were up only 1.7%, despite space growth of 3.9% and
inflation. Occupancy cost growth reflects increases in space, rents and
depreciation from store modernisations. The savings in distribution costs have
been generated through contract renegotiation, supply chain consolidation and
continued efficiency drive. Marketing expenditure was down 12.9%, and support
costs have been tightly controlled.
As a result of the performance in the first half being better than planned, a
bonus of GBP30m has been accrued (last year GBP2.7m). The level of full year
bonus will depend on the Group's full year trading performance.
The UK operating profit includes a contribution of GBP17.5m (last year GBP13.8m)
from the Group's continuing economic interest in M&S Money.
International operating profit before property disposals was GBP65.9m, up 21.1%,
reflecting strong growth in our franchise business, as well as a positive
currency impact. Offsetting the growth, we have experienced some tough market
conditions and have incurred start up losses in China and India.
Profit on property disposals
Profit on property disposals was GBP8.4m (last year GBP10.0m). This mainly
relates to the sale of retail space adjacent to our store in Dublin Grafton
Street.
Net finance costs
+-------------+--------+--------+
| | 26 weeks ended |
+-------------+-----------------+
| | 26 | 27 |
| | Sept | Sept |
| | 09 | 08 |
| | GBPm | GBPm |
+-------------+--------+--------+
| Interest | (71.0) | (83.2) |
| payable | | |
+-------------+--------+--------+
| Interest | 0.7 | 12.0 |
| income | | |
+-------------+--------+--------+
| Net | (70.3) | (71.2) |
| interest | | |
| payable | | |
+-------------+--------+--------+
| Unwinding | (2.0) | (19.3) |
| of | | |
| discount | | |
| on | | |
| partnership | | |
| liability | | |
| to the | | |
| Marks and | | |
| Spencer UK | | |
| Pension | | |
| Scheme | | |
+-------------+--------+--------+
| Pension | 5.6 | 15.9 |
| finance | | |
| income | | |
| (net) | | |
+-------------+--------+--------+
| Net | (66.7) | (74.6) |
| finance | | |
| costs | | |
+-------------+--------+--------+
Net finance costs were down GBP7.9m. Net interest payable was down 1.3% at
GBP70.3m reflecting a decrease in average net debt and lower average interest
rates over the half year. The Group's average cost of funding was 5.6% (last
year 6.1%). The discount unwinding on the partnership liability to the pension
scheme reduced to GBP2.0m (last year GBP19.3m) as a result of the changes made
to the terms of the Partnership agreement in March 2009. Net pension finance
income is in line with the full year guidance of c. GBP12m.
Taxation
The taxation charge is based on an estimated full year effective tax rate of
28.0% (last year 28.0%). This is consistent with the UK corporation taxation
rate.
Earnings per share
Adjusted earnings per share, which excludes the effect of property disposals,
was level at 13.7p per share. The weighted average number of shares in issue
during the period was 1,571.7m (last year 1,573.5m).
Dividends
In May 2009 the Board took the decision to rebase the Group's dividend payment
for 2009/10 to 15p per share. In line with this decision an interim dividend of
5.5p per share (last year 8.3p) has been approved. The Board's policy regarding
future dividends is to re-build cover towards two times and, thereafter, to grow
dividends in line with adjusted earning per share.
Capital expenditure
+---------------+--------+--------+
| | 26 weeks ended |
+---------------+-----------------+
| | 26 | 27 |
| | Sept | Sept |
| | 09 | 08 |
| | GBPm | GBPm |
+---------------+--------+--------+
| Modernisation | 25.6 | 144.2 |
| programme | | |
+---------------+--------+--------+
| New | 16.3 | 68.1 |
| stores | | |
+---------------+--------+--------+
| International | 12.9 | 26.4 |
+---------------+--------+--------+
| Supply | 84.9 | 84.4 |
| chain | | |
| and | | |
| technology | | |
+---------------+--------+--------+
| Maintenance | 5.8 | 13.4 |
+---------------+--------+--------+
| Total | 145.5 | 336.5 |
| capital | | |
| expenditure | | |
+---------------+--------+--------+
Capital expenditure was GBP145.5m (last year GBP336.5m). The focus of our capex
plans is investing in our supply chain and information technology to build an
infrastructure fit to support the future growth of the business.
We have added 3.9% of trading space in the UK, on a weighted average basis,
representing over 370,000 square feet. We opened three new out-of-town stores,
two outlet stores and 12 simply food stores, including nine BP franchises.
Cash flow and net debt
+------------+-----------+-----------+
| | 26 weeks ended |
+------------+-----------------------+
| | 26 | 27 |
| | Sept | Sept |
| | 09 | 08 |
| | GBPm | GBPm |
+------------+-----------+-----------+
| Cash | 518.2 | 722.0 |
| flow | | |
| from | | |
| operations | | |
+------------+-----------+-----------+
| Capex | (176.9) | (353.0) |
| and | | |
| disposals | | |
+------------+-----------+-----------+
| Interest | (100.7) | (107.1) |
| and | | |
| taxation | | |
+------------+-----------+-----------+
| Dividends | (146.5) | (221.4) |
| and share | | |
| issues | | |
+------------+-----------+-----------+
| Share | - | (40.9) |
| buyback | | |
+------------+-----------+-----------+
| Other | (24.4) | (4.8) |
| movements | | |
+------------+-----------+-----------+
| Net | 69.7 | (5.2) |
| cash | | |
| flow | | |
+------------+-----------+-----------+
| Opening | (2,490.8) | (3,077.7) |
| net | | |
| debt | | |
+------------+-----------+-----------+
| Exchange | 2.5 | (23.5) |
| and | | |
| other | | |
| non-cash | | |
| movements | | |
+------------+-----------+-----------+
| Closing | (2,418.6) | (3,106.4) |
| net | | |
| debt | | |
+------------+-----------+-----------+
The Group reported a net cash inflow of GBP69.7m (last year outflow GBP5.2m).
Cash flow from operations of GBP518.2m includes a working capital outflow of
GBP68.9m due to increased inventories, reflecting an increase in the proportion
of direct sourcing and the growth of our international business. The reduction
in net debt since last half year also reflects the changes made to the property
partnership with the pension fund in March 2009 which led to the
reclassification of GBP571.7m of future discretionary distributions to equity.
Net debt at 28 March 2009 was GBP2,490.8m.
Pensions
At 26 September 2009 the IAS 19 net retirement benefit deficit was GBP521.1m (28
March 2009 GBP152.2m). The change is predominantly due to a decrease in the
discount rate used to calculate the liability at the year end. The half year
discount rate was 5.5% (year end 6.8%), reflecting the corporate bond rates at
the half year end, and has led to an increase of GBP1bn in the IAS 19
calculation of the pension liability for accounting purposes at 26 September
2009. The increase in the deficit has been offset in part by an increase of
GBP0.7bn in the market value of the assets arising from a combination of
increased equity prices and a tightening of corporate bonds yields as reflected
in the discount rate.
2009/10 full year guidance:
* The planned opening of new footage in the UK will add around 3% to total space,
representing a c. 3% increase in General Merchandise and c. 2% increase in Food,
on a weighted average basis. Total square footage at 26 September 2009 was 15.1m
square feet.
* UK gross margin is expected to reduce by around 50-100 bps.
* UK operating costs are expected to increase by 0% to 1%.
* Capital expenditure is expected to be around GBP400m.
* The planned opening of new footage in our International business will add around
15% to total space. Total square footage at 26 September 2009 was 3.5 million
square feet.
* Pension finance income, based on the 28 March 2009 accounting of the pension
fund, is expected to be c. GBP12m (2008/09: GBP35m).
* The effective tax rate is expected to be 28% (2008/09: 28%).
For further information, please contact:
Investor Relations:
Majda Rainer: +44 (0)20 8718 1563
Media enquiries:
Corporate Press Office: +44 (0)20 8718 1919
Investor & Analyst webcast:
Investor and analyst presentation will be held at 09.30 on 4 November 2009. This
presentation can be viewed live on the Marks and Spencer Group plc website on:
www.marksandspencer.com/thecompany.
Video interviews with Stuart Rose, Chairman and Ian Dyson, Group Finance and
Operations Director will be available on the above website. The interviews are
also available in audio and transcript.
Fixed Income Investor Conference Call:
This will be hosted by Ian Dyson at 14.30 on Wednesday 4 November 2009:
Dial in number: +44 (0) 208 515 2302
A recording of this call will be available until Wednesday 11 November 2009:
Dial in number: +44 (0) 207 190 5901 Access Code: 142384#
Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences and
prospects are "forward-looking statements" within the meaning of the United
States federal securities laws. These forward-looking statements reflect Marks &
Spencer's current expectations concerning future events and actual results may
differ materially from current expectations or historical results. Any such
forward-looking statements are subject to various risks and uncertainties,
including failure by Marks & Spencer to predict accurately customer preferences;
decline in the demand for products offered by Marks & Spencer; competitive
influences; changes in levels of store traffic or consumer spending habits;
effectiveness of Marks & Spencer's brand awareness and marketing programmes;
general economic conditions or a downturn in the retail or financial services
industries; acts of war or terrorism worldwide; work stoppages, slowdowns or
strikes; and changes in financial and equity markets.
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Principal risks and uncertainties | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The principal risks and uncertainties which could impact the Group's long-term performance remain those detailed on |
| pages 56 - 57 of the Group's 2009 Annual Report and Financial Statements. Information on financial risk management |
| is also set out on pages 102 - 106 of the Annual Report, a copy of which is available on the Group's website |
| www.marksandspencer.com. The key risks and mitigating activities have not changed from these: |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - Business strategy |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - Financial strategy, including treasury risks, counterparty failure and pension funding |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - People development and retention |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - Operational threats, including competition, product standards, and customer service in-store and on-line |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - Reputational risk, including environmental risks, ethical standards, health and safety and business continuity. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| Statement of Directors' responsibilities | | | | | | | | |
+------------------------------------------------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The directors' confirm that this condensed consolidated interim financial information has been prepared in |
| accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair |
| review of the information required by DTR 4.2.7 and DTR 4.2.8, namely: |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - an indication of important events that have occurred during the first six months and their impact on the condensed |
| set of financial statements, and a description of the principal risks and uncertainties for the remaining six months |
| of the financial year; and |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| - material related party transactions in the first six months and any material changes in the related-party |
| transactions described in the last annual report. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The directors of Marks and Spencer Group plc are listed in the Group's 2009 Annual Report and financial statements, |
| with the exception of the appointment of John Dixon to the Board on 9 September 2009. A list of current Directors is |
| maintained on the Group's website: www.marksandspencer.com. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| By order of the Board | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Stuart Rose | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Chairman | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Ian Dyson | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Group Finance and Operations | | | | | | | | | |
| Director | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Consolidated income statement | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | Notes | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Revenue | | | 2 | 4,335.8 | 4,219.6 | 9,062.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Operating profit | | | 2 | 373.4 | 382.4 | 870.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance income | | | 3 | 6.3 | 27.9 | 50.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance costs | | | 3 | (73.0) | (102.5) | (214.5) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on ordinary activities | | | | 306.7 | 307.8 | 706.2 |
| before taxation | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Analysed between: | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Before property disposals and | | | | 298.3 | 297.8 | 604.4 |
| exceptional items | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on property disposals | | | | 8.4 | 10.0 | 6.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional costs | | | | - | - | (135.9) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional pension credit | | | 2,7 | - | - | 231.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Income tax expense | | | 4 | (85.9) | (86.1) | (199.4) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit for the period | | | | 220.8 | 221.7 | 506.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Attributable to: | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Equity shareholders of the Company | | | | 224.3 | 223.2 | 508.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Minority interests | | | | (3.5) | (1.5) | (1.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 220.8 | 221.7 | 506.8 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Basic earnings per share | | | 5A | 14.3p | 14.2p | 32.3p |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Diluted earnings per share | | | 5B | 14.2p | 14.2p | 32.3p |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Non-GAAP measure: | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Adjusted profit before taxation | | | 1 | 298.3 | 297.8 | 604.4 |
| (GBPm) | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Adjusted basic earnings per share | | | 5A | 13.7p | 13.7p | 28.0p |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Adjusted diluted earnings per share | | | 5B | 13.6p | 13.7p | 28.0p |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Consolidated statement of comprehensive income | | | | | | |
+----------------------------------------------------------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+---------+---------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit for the period | | | | 220.8 | 221.7 | 506.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Other comprehensive income | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Foreign currency translation | | | | (17.2) | (1.3) | 33.1 |
| differences | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Actuarial losses on retirement | | | | (388.0) | (233.2) | (927.1) |
| benefit schemes | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash flow and net investment hedges | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| - fair value movements in equity | | | | (2.3) | 65.3 | 304.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| - recycled and reported in net | | | | (83.4) | (41.6) | (206.8) |
| profit | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| - amount recognised in inventories | | | | (12.0) | (3.9) | (8.6) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Tax on items taken directly to | | | | 141.6 | 70.6 | 225.6 |
| equity | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Other comprehensive income for the | | | | (361.3) | (144.1) | (579.0) |
| period, net of tax | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total comprehensive (loss)/income | | | | (140.5) | 77.6 | (72.2) |
| for the period | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Attributable to: | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Equity shareholders of the Company | | | | (137.0) | 79.1 | (71.0) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Minority interests | | | | (3.5) | (1.5) | (1.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | (140.5) | 77.6 | (72.2) |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The notes on pages 18 to 23 form an integral part of this condensed | | | | |
| consolidated interim financial information. | | | | |
+---------------------------------------------------------------------------------------------+----------+----------+----------+----------+
| | | | | | | | |
| | | | | | | | |
| Consolidated statement of financial | | | | | | | |
| position | | | | | | | |
+------------------------------------------------+---------+------------+---------+-----------+---------------------+----------+----------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+---------------------+----------+----------+
| | | | | | As at | As at | As at |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | Notes | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| ASSETS | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Non-current assets | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Intangible assets | | | | 422.3 | 343.0 | 400.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Property, plant and equipment | | | | 4,735.4 | 4,771.5 | 4,834.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Investment property | | | | 22.3 | 24.9 | 24.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Investment in joint venture | | | | 11.7 | 14.0 | 13.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Other financial assets | | | | 4.2 | 3.4 | 3.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retirement benefit asset | | | 7 | - | 297.0 | - |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Trade and other receivables | | | | 311.5 | 358.4 | 336.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Derivative financial instruments | | | | 132.1 | 51.0 | 254.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Deferred tax assets | | | | - | - | 1.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 5,639.5 | 5,863.2 | 5,868.3 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+----------+----------+
| Current assets | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Inventories | | | | 660.6 | 588.5 | 536.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Other financial assets | | | | 89.5 | 47.6 | 53.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Trade and other receivables | | | | 307.0 | 320.1 | 285.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Derivative financial instruments | | | | 27.0 | 38.3 | 92.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash and cash equivalents | | | | 296.5 | 353.2 | 422.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 1,380.6 | 1,347.7 | 1,389.8 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total assets | | | | 7,020.1 | 7,210.9 | 7,258.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| LIABILITIES | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Current liabilities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Trade and other payables | | | | 1,111.6 | 1,107.2 | 1,073.5 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Borrowings and other financial | | | | 835.4 | 934.2 | 942.8 |
| liabilities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Partnership liability to the Marks & | | | 70.0 | 71.9 | 71.9 |
| Spencer UK Pension Scheme | | | | | |
+------------------------------------------------+---------+------------+---------------------+---------------------+---------------------+
| Derivative financial instruments | | | | 70.7 | 26.5 | 76.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Provisions | | | | 32.3 | 10.9 | 63.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Current tax liabilities | | | | 114.1 | 93.2 | 78.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 2,234.1 | 2,243.9 | 2,306.9 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Non-current liabilities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retirement benefit deficit | | | 7 | 521.1 | 20.6 | 152.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Trade and other payables | | | | 242.0 | 202.0 | 243.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Borrowings and other financial | | | | 2,077.7 | 2,005.7 | 2,117.9 |
| liabilities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Partnership liability to the Marks & | | | - | 620.7 | 68.0 |
| Spencer UK Pension Scheme | | | | | |
+------------------------------------------------+---------+------------+---------------------+---------------------+---------------------+
| Derivative financial instruments | | | | 1.4 | 0.2 | 3.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Provisions | | | | 45.1 | 11.3 | 40.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Deferred tax liabilities | | | | 86.4 | 312.4 | 225.5 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 2,973.7 | 3,172.9 | 2,850.6 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total liabilities | | | | 5,207.8 | 5,416.8 | 5,157.5 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net assets | | | | 1,812.3 | 1,794.1 | 2,100.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| EQUITY | | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+---------------------+
| Called-up share capital - equity | | | | 394.7 | 394.2 | 394.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Share premium account | | | | 239.0 | 233.9 | 236.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Capital redemption reserve | | | | 2,202.6 | 2,202.6 | 2,202.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Hedging reserve | | | | (8.9) | 15.5 | 62.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Other reserve | | | | (6,542.2) | (6,542.2) | (6,542.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retained earnings | | | | 5,511.0 | 5,480.1 | 5,728.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total shareholders' equity | | | | 1,796.2 | 1,784.1 | 2,081.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Minority interests in equity | | | | 16.1 | 10.0 | 18.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total equity | | | | 1,812.3 | 1,794.1 | 2,100.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The notes on pages 18 to 23 form an integral part of this condensed | | | | |
| consolidated interim financial information. | | | | |
+---------------------------------------------------------------------------------------------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Statement of changes in equity | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | Ordinary | Share | Capital | Hedging | Other | Retained | Total | Minority | Total |
| | | share | premium | redemption | reserve | reserve | earnings | | interest | equity |
| | | capital | account | reserve | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 29 March 2009 | 394.4 | 236.2 | 2,202.6 | 62.6 | (6,542.2) | 5,728.1 | 2,081.7 | 18.9 | 2,100.6 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Profit/(loss) for the period | - | - | - | - | - | 224.3 | 224.3 | (3.5) | 220.8 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Other comprehensive income: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Foreign currency translation | - | - | - | 1.6 | - | (18.8) | (17.2) | - | (17.2) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Actuarial losses on retirement | - | - | - | - | - | (388.0) | (388.0) | - | (388.0) |
| benefit schemes | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Cash flow and net investment hedges | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - fair value movements in equity | - | - | - | (10.7) | - | 8.4 | (2.3) | - | (2.3) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - recycled and reported in net | - | - | - | (83.4) | - | - | (83.4) | - | (83.4) |
| profit | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - amount recognised in inventories | - | - | - | (12.0) | - | - | (12.0) | - | (12.0) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Tax on items taken directly to | - | - | - | 33.0 | - | 108.6 | 141.6 | - | 141.6 |
| equity | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Total comprehensive income | - | - | - | (71.5) | - | (65.5) | (137.0) | (3.5) | (140.5) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with owners: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Dividends | - | - | - | - | - | (149.6) | (149.6) | - | (149.6) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with minority | - | - | - | - | - | - | - | 0.7 | 0.7 |
| shareholders | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Shares issued on exercise of | 0.3 | 2.8 | - | - | - | - | 3.1 | - | 3.1 |
| employee share options | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Purchase of own shares held by | - | - | - | - | - | (19.0) | (19.0) | - | (19.0) |
| employee trusts | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Charge for share-based payments | - | - | - | - | - | 11.2 | 11.2 | - | 11.2 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Deferred tax on share schemes | - | - | - | - | - | 5.8 | 5.8 | - | 5.8 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 26 September 2009 | 394.7 | 239.0 | 2,202.6 | (8.9) | (6,542.2) | 5,511.0 | 1,796.2 | 16.1 | 1,812.3 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | Ordinary | Share | Capital | Hedging | Other | Retained | Total | Minority | Total |
| | | share | premium | redemption | reserve | reserve | earnings | | interest | equity |
| | | capital | account | reserve | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 30 March 2008 | 396.6 | 231.4 | 2,199.9 | (36.9) | (6,542.2) | 5,707.9 | 1,956.7 | 7.3 | 1,964.0 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Profit/(loss) for the period | - | - | - | - | - | 223.2 | 223.2 | (1.5) | 221.7 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Other comprehensive income: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Foreign currency translation | - | - | - | - | - | (1.3) | (1.3) | - | (1.3) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Actuarial losses on retirement | - | - | - | - | - | (233.2) | (233.2) | - | (233.2) |
| benefit schemes | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Cash flow and net investment hedges | - | - | - | - | - | - | - | - | - |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - fair value movements in equity | - | - | - | 65.3 | - | - | 65.3 | - | 65.3 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - recycled and reported in net | - | - | - | (41.6) | - | - | (41.6) | - | (41.6) |
| profit | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - amount recognised in inventories | - | - | - | (3.9) | - | - | (3.9) | - | (3.9) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Tax on items taken directly to | - | - | - | 5.3 | - | 65.3 | 70.6 | - | 70.6 |
| equity | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Total comprehensive income | - | - | - | 25.1 | - | 54.0 | 79.1 | (1.5) | 77.6 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with owners: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Dividends | - | - | - | - | - | (224.1) | (224.1) | - | (224.1) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with minority | - | - | - | - | - | - | - | 4.2 | 4.2 |
| shareholders | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transfer of exchange on net | - | - | - | 27.3 | - | (27.3) | - | - | - |
| investment hedges | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Shares issued on exercise of | 0.3 | 2.4 | - | - | - | - | 2.7 | - | 2.7 |
| employee share options | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Shares purchased in buy-back | (2.7) | - | 2.7 | - | - | (40.9) | (40.9) | - | (40.9) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Charge for share-based payments | - | - | - | - | - | 11.6 | 11.6 | - | 11.6 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Deferred tax on share schemes | - | - | - | - | - | (1.0) | (1.0) | - | (1.0) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 27 September 2008 | 394.2 | 233.8 | 2,202.6 | 15.5 | (6,542.2) | 5,480.2 | 1,784.1 | 10.0 | 1,794.1 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | Ordinary | Share | Capital | Hedging | Other | Retained | Total | Minority | Total |
| | | share | premium | redemption | reserve | reserve | earnings | | interest | equity |
| | | capital | account | reserve | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 30 March 2008 | 396.6 | 231.4 | 2,199.9 | (36.9) | (6,542.2) | 5,707.9 | 1,956.7 | 7.3 | 1,964.0 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Profit/(loss) for the period | - | - | - | - | - | 508.0 | 508.0 | (1.2) | 506.8 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Other comprehensive income: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Foreign currency translation | - | - | - | (0.8) | - | 33.9 | 33.1 | - | 33.1 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Actuarial losses on retirement | - | - | - | - | - | (927.1) | (927.1) | - | (927.1) |
| benefit schemes | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Cash flow and net investment hedges | - | - | - | - | - | - | - | - | - |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - fair value movements in equity | - | - | - | 317.2 | - | (12.4) | 304.8 | - | 304.8 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - recycled and reported in net | - | - | - | (206.8) | - | - | (206.8) | - | (206.8) |
| profit | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| - amount recognised in inventories | - | - | - | (8.6) | - | - | (8.6) | - | (8.6) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Tax on items taken directly to | - | - | - | (29.3) | - | 254.9 | 225.6 | - | 225.6 |
| equity | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Total comprehensive income | - | - | - | 71.7 | - | (142.7) | (71.0) | (1.2) | (72.2) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with owners: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Dividends | - | - | - | - | - | (354.6) | (354.6) | (0.2) | (354.8) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Derecognition of financial | - | - | - | - | - | 571.7 | 571.7 | - | 571.7 |
| liability | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transactions with minority | - | - | - | - | - | - | - | 13.0 | 13.0 |
| shareholders | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transfer of exchange on net | - | - | - | 27.8 | - | (27.8) | - | - | - |
| investment hedges | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Shares issued on exercise of | 0.5 | 4.8 | - | - | - | - | 5.3 | - | 5.3 |
| employee share options | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Shares purchased in buy-back | (2.7) | - | 2.7 | - | - | (40.9) | (40.9) | - | (40.9) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Charge for share-based payments | - | - | - | - | - | 14.3 | 14.3 | - | 14.3 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Deferred tax on share schemes | - | - | - | - | - | 0.2 | 0.2 | - | 0.2 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| As at 28 March 2009 | 394.4 | 236.2 | 2,202.6 | 62.6 | (6,542.2) | 5,728.1 | 2,081.7 | 18.9 | 2,100.6 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The notes on pages 18 to 23 form an integral part of this condensed | | | | |
| consolidated interim financial information. | | | | |
+---------------------------------------------------------------------------------------------+----------+----------+----------+----------+
| Consolidated cash flow information | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| STATEMENT OF CASH FLOWS | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+---------+---------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | Notes | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash generated from operations | | | 9 | 518.2 | 722.0 | 1,371.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Tax paid | | | | (38.0) | (20.8) | (81.3) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net cash inflow from operating | | | | 480.2 | 701.2 | 1,290.6 |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Acquisition of subsidiaries, net of | | | | (5.4) | - | - |
| cash acquired | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Purchase of property, plant and | | | | (171.3) | (375.5) | (540.8) |
| equipment | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Proceeds from sale of property, | | | | 20.8 | 62.4 | 58.3 |
| plant and equipment | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Purchase of intangible assets | | | | (26.4) | (39.9) | (121.6) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Sale/(purchase) of financial assets | | | | (36.9) | (3.6) | (5.5) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest received | | | | 0.1 | 10.0 | 12.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net cash outflow from investing | | | | (219.1) | (346.6) | (596.9) |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest paid | | | | (62.8) | (96.3) | (197.1) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash inflow/(outflow) from | | | | 13.6 | (25.8) | (25.8) |
| borrowings | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| (Repayment)/drawdown of syndicated | | | | (121.6) | 106.9 | 108.1 |
| bank facility | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Payment of liability to the Marks & Spencer | | | (71.9) | (15.1) | (15.1) |
| UK Pension Scheme | | | | | |
+------------------------------------------------+---------+------------+---------------------+---------------------+---------------------+
| Decrease in obligations under | | | | (4.2) | - | (1.0) |
| finance leases | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Equity dividends paid | | | | (149.6) | (224.1) | (354.6) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Shares issued on exercise of | | | | 3.1 | 2.7 | 5.3 |
| employee share options | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Shares purchased in buy back | | | | - | (40.9) | (40.9) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Purchase of own shares held in | | | | (19.0) | - | - |
| employee trust | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net cash outflow from financing | | | | (412.4) | (292.6) | (521.1) |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net cash (outflow)/inflow from | | | | (151.3) | 62.0 | 172.6 |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Effects of exchange rate changes | | | | (2.2) | 1.0 | 7.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Opening net cash | | | | 298.3 | 117.9 | 117.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Closing net cash | | | | 144.8 | 180.9 | 298.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET | | | | | | | |
| DEBT | | | | | | | |
+----------------------------------------------------------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Opening net debt | | | | (2,490.8) | (3,077.7) | (3,077.7) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net cash (outflow)/inflow from | | | | (151.3) | 62.0 | 172.6 |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Increase/(decrease) in current | | | | 36.9 | (1.2) | 1.1 |
| financial assets | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Decrease/(increase) in debt | | | | 184.1 | (66.0) | (66.2) |
| financing | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Partnership liability to the Marks & Spencer UK | | - | - | 539.6 |
| Pension Scheme (non-cash) | | | | |
+----------------------------------------------------------+------------+---------------------+---------------------+---------------------+
| Exchange and other non-cash | | | | 2.5 | (23.5) | (60.2) |
| movements | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Movement in net debt | | | | 72.2 | (28.7) | 586.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+----------+----------+
| Closing net debt | | | 10 | (2,418.6) | (3,106.4) | (2,490.8) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The notes on pages 18 to 23 form an integral part of this condensed | | | | |
| consolidated interim financial information. | | | | |
+---------------------------------------------------------------------------------------------+----------+----------+----------+----------+
| | | | | | | | | |
| | | | | | | | | |
| 1 General information and 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 2009 Annual Report and Financial Statements, other than set out below. |
| The financial information has been prepared in accordance with the Disclosure and Transparency rules of the |
| Financial Services Authority and with International Accounting Standard (IAS) 34 - 'Interim Financial Reporting' as |
| endorsed by the European Union. This condensed consolidated interim information for the period does not constitute |
| statutory financial statements within the meaning of s434 of the Companies Act 2006. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total |
| annual earnings. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| IFRS 8 'Operating Segments' was issued in November 2006. It replaces IAS 14 'Segmental Reporting' and requires |
| operating segments to be disclosed on the same basis as that used for internal reporting. It has been adopted by the |
| Group from 29 March 2009. The implementation has had no impact on the results or net assets of the Group, but has |
| resulted in revised disclosures. See Note 2 for further details. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| IAS 1 (Revised) 'Presentation of Financial Statements' was issued in January 2008 and has been adopted by the Group |
| from 29 March 2009. It has resulted in revised disclosures in the primary statements. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Amendment to IAS 23 'Borrowing Costs' was issued in March 2007. It removes the option of immediately expensing |
| borrowing costs that are directly attributable to a qualifying asset and requires such costs to be capitalised. It |
| has been adopted by the Group from 29 March 2009 and has had no impact on the results or net assets of the Group. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The summary of results for the year ended 28 March 2009 is an extract from the published Annual Report and Financial |
| Statements which 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 s498 of the Companies Act 2006. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| The Directors believe that the adjusted profit and earnings per share measures provide additional useful information |
| for shareholders on the underlying performance of the business. These measures are consistent with how underlying |
| business performance is measured internally. The adjusted profit before tax measure is not a recognised profit |
| measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies. The |
| adjustments made to reported profit before tax are to exclude the following: |
| - exceptional income and charges - these are largely one-off in nature and therefore create significant volatility |
| in reported earnings; and |
| - profits and losses on the disposal of properties - these can vary significantly from year to year, again creating |
| volatility in reported earnings. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 2 Segmental Information | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Adoption of IFRS 8, Operating Segments |
| The Group has adopted IFRS 8 Operating Segments with effect from 29 March 2009. IFRS 8 requires operating segments |
| to be identified on the basis of internal reporting about components of the Group that are regularly reviewed by the |
| chief operating decision maker to allocate resources to the segments and to assess their performance. In contrast, |
| the predecessor Standard (IAS 14 Segment Reporting) required the Group to identify two sets of segments (business |
| and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to |
| key management personnel serving only as the starting point for the identification of such segments. |
| The chief operating decision maker has been identified as the Executive Directors. The Executive Directors review |
| the Group's internal reporting in order to assess performance and allocate resources. Management has determined the |
| operating segments based on these reports. The Executive Directors consider the business from an organisational |
| perspective. The reported segments are UK and International. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The Executive Directors assess the performance of the operating segments based on a measure of operating profit. |
| This measurement basis excludes the effects of exceptional items from the operating segments as well as gains or |
| losses on the disposal of assets. Central costs are all classified as UK costs and presented within UK Operating |
| profit. |
| The Executive Directors also monitor revenue within the segments. To increase transparency, the Group has decided to |
| include an additional voluntary disclosure analysing revenue within the reportable segments. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The following is an analysis of the Group's revenue and results by reportable segment: |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | 26 weeks ended 26 September 2009 |
+-----------------+-------------------+----------+---------+------------+---------+-----------+-------------------------------------------+
| | | | | | Management | Adjustment2 | Statutory |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| General Merchandise | | | | 1,874.4 | (24.6) | 1,849.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Food | | | | 2,059.1 | (18.3) | 2,040.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK retail revenue | | | | 3,933.5 | (42.9) | 3,890.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Wholesale | | | | 144.0 | - | 144.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retail | | | | 302.3 | (1.1) | 301.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International revenue | | | | 446.3 | (1.1) | 445.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group revenue | | | | 4,379.8 | (44.0) | 4,335.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK operating profit 1 | | | | 299.1 | - | 299.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International operating profit | | | | 65.9 | - | 65.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group operating profit (adjusted) | | | | 365.0 | - | 365.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on property disposals | | | | | | 8.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group operating profit | | | | | | 373.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+----------+----------+----------+----------+
| Finance income | | | | | | | 6.3 |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+---------------------+
| Finance costs | | | | | | | (73.0) |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit before tax | | | | | | 306.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 1 UK operating profit includes a contribution of GBP17.5m (last half year GBP13.8m and last year end GBP24.8m) from |
| M&S Money under the terms of our arrangement with HSBC. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| 2 Adjustments relate to revenue items recognised in cost of sales for management accounting purposes. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| Sales of General Merchandise and Foods are subject to seasonality due to higher demand during the Christmas period |
| which falls in the second half of the financial year. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | 26 weeks ended 27 September 2008 |
+-----------------+-------------------+----------+---------+------------+---------+-----------+-------------------------------------------+
| | | | | | Management | Adjustment | Statutory |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| General Merchandise | | | | 1,828.6 | (10.4) | 1,818.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Food | | | | 2,020.4 | (15.7) | 2,004.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK retail revenue | | | | 3,849.0 | (26.1) | 3,822.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Wholesale | | | | 125.1 | - | 125.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retail | | | | 271.6 | - | 271.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International revenue | | | | 396.7 | - | 396.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group revenue | | | | 4,245.7 | (26.1) | 4,219.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK operating profit | | | | 318.0 | - | 318.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International operating profit | | | | 54.4 | - | 54.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+----------+----------+
| Group operating profit (adjusted) | | | | 372.4 | - | 372.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on property disposals | | | | | | 10.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group operating profit | | | | | | 382.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+----------+----------+----------+----------+
| Finance income | | | | | | | 27.9 |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+---------------------+
| Finance costs | | | | | | (102.5) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit before tax | | | | | | 307.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 2 Segmental Information continued | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | 52 weeks ended 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------+-----------+-------------------------------------------+
| | | | | | Management | Adjustment | Statutory |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| General Merchandise | | | | 3,944.4 | (26.1) | 3,918.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Food | | | | 4,282.3 | (36.3) | 4,246.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK retail revenue | | | | 8,226.7 | (62.4) | 8,164.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Wholesale | | | | 272.3 | - | 272.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retail | | | | 627.2 | (1.7) | 625.5 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International revenue | | | | 899.5 | (1.7) | 897.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group revenue | | | | 9,126.2 | (64.1) | 9,062.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK operating profit | | | | 652.8 | - | 652.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International operating profit | | | | 116.1 | - | 116.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+----------+----------+
| Group operating profit (adjusted) | | | | 768.9 | - | 768.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on property disposals | | | | | | 6.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional costs | | | | | | (135.9) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional pension credit | | | | | | 231.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Group operating profit | | | | | | 870.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+----------+----------+----------+----------+
| Finance income | | | | | | | | 50.0 |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+----------+----------+
| Finance costs | | | | | | | | (214.5) |
+-------------------------------------+----------+---------+------------+---------------------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit before tax | | | | | | 706.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Reportable segments' assets are reconciled to total | | | | | | | |
| assets as follows: | | | | | | | |
+----------------------------------------------------------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| UK assets | | | | 6,166.1 | 6,645.1 | 6,530.8 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| International assets | | | | 854.0 | 565.8 | 727.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total assets | | | | 7,020.1 | 7,210.9 | 7,258.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 3 Finance income/(costs) | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance income | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Bank and other interest receivable | | | | 0.7 | 12.0 | 14.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Pension finance income (net) | | | | 5.6 | 15.9 | 35.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance income | | | | 6.3 | 27.9 | 50.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance costs | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest on bank borrowings | | | | (3.5) | (3.2) | (6.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest payable on syndicated bank | | | | (4.3) | (18.2) | (41.0) |
| facility | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest payable on medium-term | | | | (56.9) | (56.9) | (113.9) |
| notes | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest payable on finance leases | | | | (2.8) | (2.5) | (4.9) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Fair value movements on financial | | | | (3.5) | (2.4) | (10.5) |
| instruments | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Unwinding of discount on partnership liability to the Marks & | (2.0) | (19.3) | (38.0) |
| Spencer UK Pension Scheme | | | |
+-----------------------------------------------------------------------+---------------------+---------------------+---------------------+
| Finance costs | | | | (73.0) | (102.5) | (214.5) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net finance costs | | | | (66.7) | (74.6) | (164.5) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 4 Taxation | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The taxation charge for the 26 weeks ended 26 September 2009 is based on an estimated full year effective tax rate |
| of 28.0% (last full year 28.2%). |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 5 Earnings per share | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of |
| ordinary shares in issue during the period. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The adjusted earnings per share figures have been calculated in addition to the earnings per share required by IAS |
| 33 - 'Earnings per Share' and are based on earnings excluding the effect of property disposals and exceptional |
| items. These have been calculated to allow the shareholders to gain an understanding of the underlying trading |
| performance of the Group. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume |
| conversion of all dilutive potential ordinary shares. The Group has only one class of dilutive potential ordinary |
| shares being those share options granted to employees where the exercise price is less than the average market price |
| of the Company's ordinary shares during the period. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Details of the adjusted earnings per share | | | | | | | | |
| are set out below: | | | | | | | | |
+------------------------------------------------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+---------+---------------------------------+---------------------+
| | | | | | | 26 Sept | | 27 Sept | 28 March 2009 |
| | | | | | | 2009 | | 2008 | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | GBPm | | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Earnings after tax | | | | | 224.3 | | 223.2 | 508.0 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Property disposals (net of tax) | | | | | (8.4) | | (8.2) | (6.4) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional costs (net of tax) | | | | | - | | - | 105.7 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional pension credit (net of | | | | | - | | - | (166.6) |
| tax) | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Adjusted earnings after tax | | | | | 215.9 | | 215.0 | 440.7 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | million | | million | million |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Weighted average number of ordinary | | | | | 1,571.7 | | 1,573.5 | 1,573.2 |
| shares in issue | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Potentially dilutive share options under Group's | | | 12.7 | | 1.4 | 0.8 |
| share option schemes | | | | | | |
+----------------------------------------------------------+------------+---------+-----------+----------+----------+---------------------+
| Weighted average number of diluted | | | | | 1,584.4 | | 1,574.9 | 1,574.0 |
| ordinary shares | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| A Basic earnings per share | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | pence | | pence | pence |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Basic earnings per share | | | | | 14.3 | | 14.2 | 32.3 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Property disposals per share | | | | | (0.6) | | (0.5) | (0.4) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional costs per share | | | | | - | | - | 6.7 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional pension credit per | | | | | - | | - | (10.6) |
| share | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Adjusted basic earnings per share | | | | | 13.7 | | 13.7 | 28.0 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| B Diluted earnings per share | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | pence | | pence | pence |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Diluted earnings per share | | | | | 14.2 | | 14.2 | 32.3 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Property disposals per share | | | | | (0.6) | | (0.5) | (0.4) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional costs per share | | | | | - | | - | 6.7 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Exceptional pension credit per | | | | | - | | - | (10.6) |
| share | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| Adjusted diluted earnings per share | | | | | 13.6 | | 13.7 | 28.0 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 6 Dividends | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Final dividend of 9.5p per share (last year | | | 149.6 | 224.1 | 224.1 |
| 14.2p per share) | | | | | |
+------------------------------------------------+---------+------------+---------------------+---------------------+---------------------+
| Prior period interim dividend of | | | | - | - | 130.5 |
| 8.3p per share | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | 149.6 | 224.1 | 354.6 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The Directors have approved an interim dividend of 5.5p per share (last half year 8.3p per share) which, in line |
| with the requirements of IAS 10 - 'Events after the Balance Sheet Date', has not been recognised within these |
| results. This results in an interim dividend of GBP86.9m (last half year GBP130.5m) which will be paid on 8 January |
| 2010 to shareholders whose names are on the Register of Members at the close of business on 13 November 2009. The |
| ordinary shares will be quoted ex dividend on 11 November 2009. Shareholders may choose to take this dividend in |
| shares or in cash. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 7 Retirement benefits | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Opening net retirement benefit | | | | (152.2) | 483.5 | 483.5 |
| (deficit)/asset | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Current service cost | | | | (28.1) | (37.1) | (72.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional pension credit | | | | - | - | 231.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Curtailment gain | | | | - | 4.0 | 5.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest cost | | | | (133.5) | (149.6) | (299.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Expected return on scheme assets | | | | 139.1 | 165.5 | 334.6 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Employer contributions | | | | 41.2 | 43.3 | 92.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Actuarial losses | | | | (388.0) | (233.2) | (927.1) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exchange movement | | | | 0.4 | - | (0.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Closing net retirement benefit | | | | (521.1) | 276.4 | (152.2) |
| (deficit)/asset | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Analysed on the balance sheet as: | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Retirement benefit asset | | | | - | 297.0 | - |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Retirement benefit deficit | | | | (521.1) | (20.6) | (152.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Closing net retirement benefit | | | | (521.1) | 276.4 | (152.2) |
| (deficit)/asset | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Total market value of assets | | | | 4,643.2 | 4,796.8 | 3,977.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Present value of scheme liabilities | | | | (5,147.6) | (4,500.6) | (4,112.4) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net funded pension plan | | | | (504.4) | 296.2 | (135.4) |
| (deficit)/asset | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Unfunded retirement benefits | | | | (0.9) | (1.1) | (1.0) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Post-retirement | | | | | (15.8) | (18.7) | (15.8) |
| healthcare | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Net retirement benefit | | | | (521.1) | 276.4 | (152.2) |
| (deficit)/asset | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The main financial assumptions used to assess the liabilities of the scheme have been updated by independent |
| qualified actuaries to assess the liabilities of the scheme. The most significant of these are the discount rate and |
| the inflation rate which are 5.5% (last full year 6.8%) and 3.0% (last full year 2.9%) respectively. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| The amount of the deficit varies if the main financial assumptions change, particularly the discount rate. If the |
| discount rate increased/decreased by 0.1% the IAS 19 deficit would decrease/increase by c.GBP110m. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 8 Capital expenditure and contingencies | | | | | | | | |
| | | | | | | | | |
+------------------------------------------------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| A Capital expenditure | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Additions to the cost of property, plant and equipment, investment property and intangible assets are GBP145.5m |
| (last half year GBP336.5m) and for the year ended 28 March 2009 were GBP652.0m. Disposals in net book value of |
| property, plant and equipment, investment property and intangible assets are GBP12.4m (last half year GBP34.3m) and |
| for the year ended 28 March 2009 were GBP75.7m. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| B Capital commitments | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Commitments in respect of properties in the course of | 32.4 | 72.5 | 52.1 |
| construction | | | |
+-----------------------------------------------------------------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| C Other material contracts | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| In the event of a material change in the trading arrangements with certain warehouse operators, the Group has a |
| commitment to purchase property, plant and equipment, at values ranging from historical net book value to market |
| value, which are currently owned and operated by them on the Group's behalf. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 9 Cash flow analysis | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on ordinary activities after | | | | 220.8 | 221.7 | 506.8 |
| taxation | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Income tax expense | | | | 85.9 | 86.1 | 199.4 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest payable and similar | | | | 73.0 | 102.5 | 214.5 |
| charges | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest receivable | | | | (6.3) | (27.9) | (50.0) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Operating profit | | | | 373.4 | 382.4 | 870.7 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Increase in inventories | | | | (121.7) | (99.6) | (46.0) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| (Increase)/decrease in receivables | | | | (10.4) | 16.5 | 55.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Payments to acquire leasehold | | | | - | - | (14.1) |
| properties | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Increase in payables | | | | 83.4 | 220.7 | 212.2 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional operating cash | | | | (23.0) | 1.0 | (27.4) |
| (outflow)/inflow | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Depreciation and amortisation | | | | 213.7 | 199.4 | 409.0 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Share-based payments | | | | 11.2 | 11.6 | 14.3 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Profit on property disposals | | | | (8.4) | (10.0) | (6.4) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional costs | | | | - | - | 135.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Exceptional pension credit | | | | - | - | (231.3) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash generated from operations | | | | 518.2 | 722.0 | 1,371.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 10 Reconciliation of net debt to | | | | | | | | | |
| balance sheet | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | 26 weeks ended | Year ended |
+-----------------+-------------------+----------+---------+------------+-------------------------------------------+---------------------+
| | | | | | 26 Sept 2009 | 27 Sept 2008 | 28 March 2009 |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | GBPm | GBPm | GBPm |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Balance sheet and related notes | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Cash and cash equivalents | | | | 296.5 | 353.2 | 422.9 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Current financial assets | | | | 89.5 | 47.6 | 53.1 |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Bank loans and overdrafts | | | | (199.4) | (203.9) | (159.1) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Syndicated bank facility | | | | (634.3) | (722.3) | (781.2) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Medium term notes | | | | (1,867.6) | (1,864.7) | (1,848.1) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Finance lease liabilities | | | | (100.4) | (102.0) | (101.9) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Partnership liability to the Marks & | | | (70.0) | (692.6) | (139.9) |
| Spencer UK Pension Scheme | | | | | |
+------------------------------------------------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | (2,485.7) | (3,184.7) | (2,554.2) |
+-----------------+-------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Interest payable included within | | | | 67.1 | 78.3 | 63.4 |
| related borrowings | | | | | | |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| Total net debt | | | | (2,418.6) | (3,106.4) | (2,490.8) |
+-------------------------------------+----------+---------+------------+---------------------+---------------------+---------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 11 Acquisitions | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | GBPm |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Net liabilities at fair value | | | | | | | | | (2.4) |
| (100%) | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Net liabilities acquired | | | | | | | | | (1.2) |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Cash consideration | | | | | | | | | 6.1 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Transaction costs | | | | | | | | | 0.8 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Total consideration | | | | | | | | | 6.9 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Goodwill arising on acquisition | | | | | | | | | 8.1 |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| On 31 March 2009, Marks and Spencer Reliance India Pvt Limited, a 51% subsidiary of the Group, completed the |
| acquisition of 100% of the issued share capital of Supreme Tradelinks Private Limited, which up until this date was |
| the Group's franchisee in India, for cash consideration of GBP6.1m and transaction costs of GBP0.8m. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| The acquisition has contributed GBP2.9m to sales and a GBP1.0m loss to operating profit in the period since |
| acquisition, which is the same contribution had the acquisition taken place on the first day of the financial |
| period. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| Goodwill has arisen on the acquisition due to the opportunities to facilitate a faster rate of growth and greater |
| operating efficiency that do not meet the criteria for recognition as an intangible asset at the date of |
| acquisition. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| 12 Related party transactions | | | | | | | | | |
+-------------------------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Supplier transactions occurred during the period between the Group and a company controlled by a close family member |
| of Kate Bostock, an executive director of the Group. These transactions amounted to GBP3.4m during the period (last |
| half year GBP2.7m) with an outstanding trade payable of GBP0.5m at 26 September 2009 (last half year GBP0.2m). The |
| company was a supplier prior to Kate's employment by the Group. |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
| Supplier transactions occurred during the period between the Group and a company controlled by Martha Lane Fox's |
| partner. Martha is a non-executive director of the Group. These transactions amount to GBP0.6m during the period |
| (last half year GBPnil) with an outstanding trade payable of GBP0.1m at 26 September 2009 (last half year GBPnil). |
+-----------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | |
+-----------------+-------------------+----------+---------+------------+---------+-----------+----------+----------+----------+----------+
Independent review report to Marks and Spencer Group Plc
Introduction
We have been engaged by the company to review the condensed consolidated interim
financial information in the half-yearly financial report for the 26 weeks ended
26 September 2009, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated statement of
financial position, statement of changes in equity, consolidated cash flow
statement, comparative figures and associated notes. We have read the other
information contained in the half-yearly financial report and considered whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial information.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority. As disclosed in note 1, the
annual financial statements of the group are prepared in accordance with IFRSs
as adopted by the European Union. The condensed consolidated interim financial
information included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
consolidated interim financial information in the half-yearly financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of the Disclosure and Transparency
Rules of the Financial Services Authority and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated interim financial information in the half-yearly
financial report for the 26 weeks period 26 September 2009 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
London
3 November 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
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