Marks and Spencer 2002 Annual Report Download - page 24

Directors’ report
22 Marks and Spencer Group p.l.c.
Capital reorganisation
Effective from 19 March 2002 the Company acquired 100% of the issued share capital of Marks and Spencer p.l.c.
following implementation of a Scheme of Arrangement under Section 425 of the Companies Act 1985. References
throughout the Annual Report and Financial Statements to the ‘Company’ refer to Marks and Spencer Group p.l.c.
from 19 March 2002 onwards and prior to that to Marks and Spencer p.l.c.
Principal activities
The principal activities of the Group are Retailing and Financial Services.
Retailing consists of the Group’s retail activities under the Marks & Spencer, Brooks Brothers (until 28 December
2001) and Kings Super Markets brand names.
Financial Services consists of the operations of the Group’s retail Financial Services companies, which provide
account cards, personal loans, unit trust management, life assurance, personal insurance and pensions. The Group’s
captive insurance company is also included in this segment as the major part of its business is generated from the
provision of related insurance services.
Review of activities and future performance
A review of the Group’s activities and of the future development of the Group is contained within the Annual
Review and Summary Financial Statement.
Profit and dividends
The profit for the financial year, after taxation and minority interests, amounts to £153.0m (last year £5.5m loss).
The directors have declared dividends as follows:
Ordinary shares £m
Interim paid, 3.7p per share (last year 3.7p) 105.2
Proposed final, 5.8p per share (last year 5.3p) 133.7
Total ordinary dividends, 9.5p per share (last year 9.0p) 238.9
The final dividend will be paid on 19 July 2002 to shareholders whose names are on the Register of Members at the
close of business on 31 May 2002.
Share capital
Changes in the period to the issued share capital of Marks and Spencer p.l.c.
(i) Issue of new shares
During the period to 18 March 2002, 2,449,658 ordinary shares in the Company were issued as follows:
•2,414,644 under the terms of the Executive Share Option Schemes at prices between 215p and 358p;
•35,000 issued into the Qualifying Employee Share Ownership Trust at a price of 268.25p; and
•14 as part of the capital reorganisation.
(ii) Purchase of own shares
The Company is authorised by the shareholders to purchase, in the market, the Company’s own shares, as permitted
under the Company’s Articles of Association. During the year the Company purchased a total of 21,446,162 ordinary
shares for cancellation at a cost of £52.0m, representing 0.8% of its issued share capital. This authority is renewable
annually and approval will be sought from shareholders at the AGM in 2002 to renew the authority for a further year.
On 18 March 2002, Marks and Spencer p.l.c. had 2,848,387,227 shares in issue.
Scheme of Arrangement
Effective from 19 March 2002, the Company acquired 100% of the issued share capital of Marks and Spencer p.l.c.
following implementation of a Scheme of Arrangement under section 425 of the Companies Act 1985. This scheme
involved the issue of 17 ordinary shares and 21 redeemable B shares by the Company for every 21 ordinary shares
held by the shareholders of Marks and Spencer p.l.c. (Further details of this are given in note 24 to the financial
statements.)
Changes in the period to the issued share capital of Marks and Spencer Group p.l.c.
In the period from 19 March 2002 to 30 March 2002, 1,114,664 ordinary shares in the Company were issued under
the terms of the Group’s employee share schemes at prices between 156p and 389p.
Major shareholders
As at 7 May 2002, the Company’s share register of substantial shareholdings showed the following interests in 3%
or more of the Company’s shares: Ordinary % share
shares capital
Brandes Investment Partners, L.P. 135,324,632 5.87
The Capital Group Companies, Inc. 95,850,531 4.15
Legal and General Investment Management 77,783,788 3.37