Marks and Spencer 2005 Annual Report Download - page 29

MARKS AND SPENCER GROUP PLC 27
Directors’ report
Principal activities
During the year, the principal activities of the Group were Retailing and Financial Services. Financial Services activities were discontinued
during the period.
Retailing consists of the Group’s retail activities under the Marks & Spencer and Kings Super Markets brand names.
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, minority interests and non-equity dividends, amounts to £584.2m (last year £549.3m).
The directors have declared dividends as follows:
Ordinary shares £m
Paid interim dividend of 4.6p per share (last year 4.4p per share) 76.3
Proposed final dividend of 7.5p per share (last year 7.1p per share) 124.2
Total ordinary dividend, 12.1p per share (last year 11.5p per share) 200.5
During the year, dividends of £2.8m (last year £3.0m) have been paid on non-equity shares.
The final ordinary dividend will be paid on 15 July 2005 to shareholders whose names are on the Register of Members at the close
of business on 3 June 2005.
Changes in share capital
(i) Issue of new ordinary shares
During the period, 28,309,324 ordinary shares in the Company were issued as follows:
•4,102,080 shares under the terms of the 1997 Executive Share Option Scheme at prices between 261p and 358p;
•11,072,116 shares under the terms of the 2000 Executive Share Option Scheme at prices between 195p and 350p;
•1,805,439 shares under the terms of the 2002 Executive Share Option Scheme at prices between 270p and 353p; and
•11,329,689 shares under the terms of the United Kingdom Employees’ Save As You Earn Share Option Scheme at prices
between 156p and 324p.
(ii) Purchase of ordinary 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. The Company engages in share buy-backs to create value for the shareholders, when cash flow
permits and there is not an immediate alternative investment use for the funds. During the year, no shares were bought back under this
authority. This authority is renewable annually and approval will be sought from shareholders at the Annual General Meeting in 2005 to
renew the authority for a further year.
(iii) Tender Offer
Under authority granted to the Company by the shareholders at the Extraordinary General Meeting held on 22 October 2004, the
Company purchased, and subsequently cancelled, by way of Tender Offer, 635,359,116 ordinary shares at a cost of £2.3bn, with
a nominal value of £158.8m, at a price of 362p, representing 27.9% of the issued share capital.
(iv) Redemption of B shares
During the year, the Company redeemed 27,421,847 B shares, with a nominal value of £19.2m.
Major shareholders
As at 10 May 2005, the Company’s register of substantial shareholdings showed the following interests in 3% or more of the
Company’s shares:
Ordinary % share
shares capital
Brandes Investment Partners, LLC 251,969,136 15.30
Legal & General Investment Management 55,510,977 3.37
Directors and their interests
On 23 May 2005, the directors were Paul Myners, Stuart Rose, Charles Wilson, Anthony Habgood, Steven Holliday, Jack Keenan and
Kevin Lomax. Their biographical details, together with those of Ian Dyson who joins the Board on 27 June 2005 and Lord Burns who joins
the Board on 1 October 2005, are given on page 17 of the Annual review and summary financial statement.
Paul Myners was appointed as Chairman in May 2004, having been appointed to the Board in April 2002 as non-executive director.
Stuart Rose was appointed as Chief Executive and Charles Wilson was appointed as executive director of the Company on 31 May 2004.
On 15 July 2004, Anthony Habgood and Steven Holliday were appointed non-executive directors. Ian Dyson will join as Finance Director
on 27 June 2005. Lord Burns will join as Deputy Chairman on 1 October 2005 and will become Chairman from the Annual General
Meeting in July 2006.
Luc Vandevelde retired as Chairman and Roger Holmes retired as Chief Executive on 31 May 2004. Alison Reed retired as Group Finance
Director on 30 April 2005. Vittorio Radice retired as an executive director on 11 June 2004. Laurel Powers-Freeling and Maurice Helfgott