Marks and Spencer 2002 Annual Report Download - page 35

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www.marksandspencer.com 33
4. Operating profit 2002 2001
Continuing Discontinued Continuing Discontinued
operations operations Total operations
1
operations Total
£m £m £m £m £m £m
Turnover 7,619.4 516.0 8,135.4 7,342.6 733.1 8,075.7
Cost of sales (4,888.6) (302.8) (5,191.4) (4,822.6) (414.5) (5,237.1)
Gross profit 2,730.8 213.2 2,944.0 2,520.0 318.6 2,838.6
Employee costs (see note 11) 1,093.6 99.8 1,193.4 987.1 130.7 1,117.8
Occupancy costs 249.4 60.1 309.5 231.2 80.3 311.5
Repairs, renewals and maintenance of fixed assets 111.8 4.6 116.4 84.5 6.7 91.2
Depreciation 225.9 23.7 249.6 243.4 32.5 275.9
Other costs2421.0 52.8 473.8 519.4 82.3 601.7
Total net operating expenses3(2,101.7) (241.0) (2,342.7) (2,065.6) (332.5) (2,398.1)
Less provision made last year – 42.5 42.5 –––
Operating profit 629.1 14.7 643.8 454.4 (13.9) 440.5
The directors consider that the nature of the business is such that the analysis of expenses shown above is more
informative than that set out in the formats of the Companies Act 1985.
1After exceptional charges of £26.5m comprising employee costs of £17.0m and other costs of £9.5m.
2Included in ‘Other costs’ is the remuneration to the auditors for audit and non-audit services as follows:
Group Company
2002 2001 2002
£m £m £m
Audit fees 1.0 1.1 0.1
Non-audit services 2.5 2.1 0.8
Included in non-audit fees above are amounts paid to PricewaterhouseCoopers for audit related services, principally
relating to the corporate restructuring, of £1.9m (last year £0.5m), taxation advice £0.3m (last year £0.4m) and general
consulting of £0.3m (last year £1.2m).
3Included in ‘Total net operating expenses’ are rentals under operating leases, comprising £7.1m for hire of plant and machinery (last
year £4.5m) and £124.6m of other rental costs (last year £124.1m).
5. Exceptional items
A Exceptional operating charges 2002 2001
£m £m
UK restructuring costs –(26.5)
The £26.5m charge last year was in respect of the closure of the ‘Direct‘ catalogue business (£16.5m) and the
reduction of roles at the Group’s head office (£10.0m).
B Profit/(loss) on sale of property and other fixed assets 2002 2001
£m £m
Provision for loss on ‘Direct’ assets1–(19.0)
Other asset disposals241.2 (64.2)
Profit/(loss) on sale of property and other fixed assets 41.2 (83.2)
1Including the restructuring cost of £16.5m disclosed in note 5A above, this gave rise to total closure costs for the ‘Direct’ catalogue
business of £35.5m.
2Other asset disposals mainly relate to the disposal of UK stores.
C Provision for loss on operations to be discontinued 2002 2001
£m £m
Net closure costs –(225.3)
Goodwill previously credited to reserves –1.3
Provision for loss on operations to be discontinued –(224.0)
The provision for loss on operations to be discontinued represented the expected cost of the closure of the Group’s
Continental European subsidiaries. Net closure costs included provisions for future trading losses, losses on disposal
of fixed assets, property exit costs and redundancy costs.