Marks and Spencer 2005 Annual Report Download - page 7

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MARKS AND SPENCER GROUP PLC 5
International Retail
2005 2004
52 weeks 52 weeks
Turnover (£m)
– Marks & Spencer branded businesses 455.8 426.2
– Kings Super Markets 219.8 238.8
675.6 665.0
Operating profit (£m)
– Marks & Spencer branded businesses 60.7 41.8
– Kings Super Markets 4.3 2.4
65.0 44.2
Number of stores (at the end of the year)
– Owned 45 43
– Franchise 191 155
Selling space at the end of the year (000 sq ft)
– Owned 1,024 908
– Franchise 1,317 1,068
Turnover for the year in the Marks & Spencer branded businesses (Republic of Ireland, franchises and Hong Kong) increased by 6.9%
(9.1% at constant exchange rates).
Operating profit for the Marks & Spencer branded businesses increased by 45.2% to £60.7m. In the Republic of Ireland, sales were ahead
of last year and the performance of the new stores in Blanchardstown and Dundrum has been encouraging. Our franchisees have seen
good like-for-like sales increases and are investing in new footage. Hong Kong had a strong year, however, in 2005/06 some of our leases
will be surrendered to the landlord for development.
Sales at Kings Super Markets were broadly level over the period at constant exchange rates, compared with the same period last year.
Operating profit at Kings over the period was £4.3m as a result of actions taken last year to improve financial performance.
Financial Services
The Financial Services business was sold to HSBC on 9 November 2004 for £768.6m and the results of the business up to the date
of disposal have been included under the heading of discontinued operations.
The Group has also entered into an agreement with HSBC, whereby the Group will continue to share in the success of the Financial
Services business. Under this agreement, the Group will receive income in the form of fees representing an amount equivalent to costs
incurred, 50% of the profits of M&S Money (after a notional tax charge and after deducting agreed operating and capital costs) plus an
amount relating to the growth in sales of financial services products. Fees received under this agreement since the date of disposal have
been included within other operating income in UK Retail.
Exceptional items
The Group has recorded exceptional income of £126.8m in the year, as follows:
2005 2004
Exceptional items £m £m
Operating exceptional items
Head office relocation 8.8 19.6
Head office restructuring programme 6.3 22.5
Board restructure 8.4 –
Closure of Lifestore 29.3 –
Defence costs 38.6 –
91.4 42.1
Non-operating exceptional items
Loss/(profit) on sale of property and other fixed assets 0.4 (18.7)
Profit on disposal of Financial Services (208.9) –
Release of European closure provision (9.7) –
(218.2) (18.7)
Total exceptional (income)/charges (126.8) 23.4
During the year, £8.8m of revenue costs were incurred in connection with the relocation of the head office and have been charged as
exceptional operating costs. This relocation was completed at the end of October.