Marks and Spencer 2006 Annual Report Download - page 26

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24 Marks and Spencer Group plc
Financial review continued
During the year, the Group acquired tangible non-current assets
of £326.8m (last year £218.5m). The major components are
analysed in the chart below:
The increase in capital expenditure in the year mainly relates to
new space and the store modernisation programme. In total,
we added 250,000 square feet of new space in the year. By the
end of the year we had modernised 23 stores comprising
approximately one million square feet. We are now rolling out
the modernisation programme and expect to modernise a
further 60 to 70 stores by the end of 2006/07 as part of a
£520m to £570m capital expenditure programme.
After taking into account the timing of payments, the cash
outflow for capital expenditure was £298.5m (last year
£232.2m). This excludes the £38.0m the Group paid to acquire
28 properties from Iceland which is included as a movement in
working capital, reflecting the revised classification of leasehold
properties.
Free cash flow was £701.8m compared to £1,205.9m last year.
After taking into account the proceeds from the issue of new
shares, the payment of dividends and other movements, net
debt at the end of the year was £1,729.3m, a decrease
of £547.9m.
Balance sheet
2006 2005
£m £m
Intangible non-current assets 163.5 165.4
Tangible non-current assets 3,614.3 3,624.8
Other non-current assets 290.6 244.8
Inventories 374.3 338.9
Other receivables 210.5 213.8
Derivative financial instruments 58.9 –
Net assets of Kings (excl. net cash) 27.3 –
Trade and other payables (1,031.6) (809.9)
Provisions (28.3) (44.9)
Retirement benefit obligations (794.9) (676.0)
Net debt (1,729.3) (2,147.7)
Net assets 1,155.3 909.2
Gearing % (including
post-retirement liability) 69.7% 75.8%
Change in net debt
Opening
net debt
Free cash
flow
Proceeds
from shares
issue
DividendsOther
cash flow
movements
Closing
net debt
£m
0
(2,500)
(2,000)
(1,500)
(1,000)
(500)
701.8
61.8 (204.1)
(11.6) (1,729.3)
(2,277.2)
Capital expenditure
£m
150
0
30
60
90
120
New
stores
Moderni-
sation
Main-
tenance
capex
Inter-
national
New
stores
Moderni-
sation
Main-
tenance
capex
Inter-
national
This year Last year
83 89
141
25
84
71
19
34