Tesco 1999 Annual Report Download - page 27

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TESCO PLC ANNUAL REPORT 1999 25
1999 1998
Continuing operations Continuing Discontinued
Acquisitions Total operations operations Total
Note 2 Analysis of operating profit £m £m £m £m £m £m
Turnover excluding VAT 17,002 156 17,158 15,915 537 16,452
Cost of sales (15,695)(
155)(
15,850)(14,693) (524) (15,217)
Gross profit 1,307 1 1,308 1,222 13 1,235
Administration expenses (371)(
3
)(
374)(371) (15) (386)
Operating profit/(loss) 936 (2)934 851 (2) 849
Cost of sales includes distribution costs and store operating costs. Integration costs, goodwill amortisation and employee profit-sharing
are included within administration expenses.
Integration costs of £95m relating to our Irish businesses were included within administration expenses in 1998. These have been
restated in line with Financial Reporting Standard 12, ‘Provisions, Contingent Liabilities and Contingent Assets’, to reflect actual costs
incurred of £63m. The charge made for integration costs in 1999 is £26m.
Note 3 Employee profit-sharing
This represents the amount allocated to the trustees of the profit-sharing scheme and is based on the UK profit after interest before net
loss on disposal of fixed assets and taxation.
1999 1998
Note 4 Profit on ordinary activities before taxation £m £m
Profit on ordinary activities is stated after charging the following:
Depreciation 401 358
Goodwill amortisation 5–
Operating lease costs (a) 159 137
Auditors’ remuneration (b) 1–
Employment costs (note 5) 1,736 1,642
a) Operating lease costs include £35m for hire of plant and machinery (1998 – £19m).
b) Auditors’ remuneration amounted to £0.7m (1998 – £0.5m) and includes £0.1m (1998 – £0.1m) for the company. The auditors
also received £1.9m (1998 – £1.6m) in respect of non-audit services of which £1.1m (1998 – £0.5m) related to overseas
operations. These fees were principally in respect of acquisitions and systems implementation.
1999 1998
Note 5 Employment costs £m £m
a) Employment costs during the year
Wages and salaries 1,558 1,481
Social security costs 105 99
Other pension costs (note 26) 73 62
1,736 1,642
b) Number of persons employed
The average number of employees per week during the year was: UK 172,712 (1998 – 164,716), Rest of Europe 19,497 (1998 –
20,864), Thailand 6,133 (1998 – nil) and the average number of full-time equivalents was: UK 108,284 (1998 – 105,008), Rest of
Europe 17,116 (1998 – 19,164) and Thailand 5,631 (1998 – nil).