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59Marks and Spencer Group plc
3 EXPENSE ANALYSIS
2006 2005
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
£m £m £m £m £m £m
Revenue 7,797.7 – 7,797.7 7,490.5 – 7,490.5
Cost of sales (4,812.1) – (4,812.1) (4,884.3) (3.3) (4,887.6)
Gross profit 2,985.6 – 2,985.6 2,606.2 (3.3) 2,602.9
Selling and marketing expenses (1,625.7) – (1,625.7) (1,493.0) (26.0) (1,519.0)
Administrative expenses (522.7) – (522.7) (476.8) (52.4) (529.2)
Other operating income 18.6 – 18.6 12.7 – 12.7
Loss on property disposals (5.7) – (5.7) (0.4) 31.1 30.7
Operating profit after exceptional items 850.1 – 850.1 648.7 (50.6) 598.1
The pre-exceptional selling and marketing expenses and administrative expenses in the table above are further analysed in the
table below:
Selling and Admini- Selling and Admini-
marketing strative marketing strative
expenses expenses Total expenses expenses Total
£m £m £m £m £m £m
Employee costs (see note 10A) 844.9 228.3 1,073.2 773.6 195.8 969.4
Occupancy costs 276.2 49.2 325.4 265.8 42.5 308.3
Repairs, renewals and maintenance of property 73.0 17.2 90.2 60.9 12.9 73.8
Depreciation and amortisation 243.5 30.5 274.0 226.0 29.0 255.0
Other costs 188.1 197.5 385.6 166.7 196.6 363.3
Operating expenses before exceptional items 1,625.7 522.7 2,148.4 1,493.0 476.8 1,969.8
Exceptional items are comprised of:
2006 2005
£m £m
Head office relocation –(8.8)
Head office change programme –(6.3)
Board restructure –(8.4)
Closure of Lifestore –(29.3)
Defence costs –(38.6)
Sale of head office premises –31.1
Release of provision held against European closure –9.7
Exceptional items –(50.6)