Marks and Spencer 1998 Annual Report Download - page 36

SALES
An analysis of the 5.8% increase in UK sales (including VAT) for
the year is given below, divided between the three product groups
and the four repor ting periods for the year:
First Second 17 weeks 9 weeks
Quar ter Quar ter to 24 Jan to 28 Mar Total
Inc % Inc % Inc % Inc % Inc %
Clothing, Footwear & Gifts 9.7 7.8 8.4 4.9 8.1
Home Furnishings 13.8 7.5 6.9 2.4 7.8
Foods 0.8 3.9 2.8 0.9 2.3
Total 6.2 6.3 6.4 3.1 5.8
Our food price deflation for the year averaged Ð0.5%.
In calendar years 1996 and 1997, the timing of Easter was such
that the impor tant pre-Easter weeks both fell within our 1996/ 97
financial year. For 1998, the corresponding week falls within our
1998/ 99 financial year. A djusting for this, food sales in the nine
weeks to 28 March grew by 3.2% and for the year as a whole by
3.0%.
The analysis of overseas sales is given in the segmental
analysis on page 53, with the sales increases given based on
average and constant rates of ex change. At constant rates, total
overseas sales grew by 7.3%
FOOTAGE AND NEW STORES
The increase in footage was more concentrated towards the end
of the financial year as shown in the table below:
Opening First Second Closing
Footage Half Half Footage
Net sales footage: 000 sq ft 000 sq ft 000 sq ft 000 sq ft
UK* 10,576 77 336 10,989
Republic of Ireland 173 9 Ð 182
Continental Europe 992 39 43 1,074
European Franchises 448 74 28 550
Hong Kong 132 45 7 184
Far East Franchises 241 38 15 294
Brooks Brothers 746 5 34 785
Kings Super Markets 354 18 15 387
Canada 330 (3) Ð 327
American Franchises 19 Ð (3) 16
Total 14,011 302 475 14,788
*Within UK footage, the allocation to Foods was 97,000 sq ft or 23.5% of the new UK footage.
In the UK, the 336,000 sq ft which was opened in the second
half included 230,000 sq ft in March, with new stores at Cribbs
Causeway near Bristol (102,000 sq ft), Kew (41,000 sq ft) and
Newry (27,000 sq ft).
New European stores included Wijnegem in Belgium (39,000 sq
ft) and Z aragoza in Spain (30,000 sq ft). In Hong Kong, two new
stores opened totalling 45,000 sq ft.
On average, we traded on 2.6% more footage in the UK in
1997/ 98 and on an additional 10.1% footage overseas.
In the nex t two years, we plan to open 2.4m sq ft of new selling
space. The pattern of new openings, analysed between UK and
overseas (ex cluding franchises) is shown in the nex t table against
the last three years:
CAPITAL EXPENDITURE
Capital ex penditure during the year totalled £740 million, the main
components of this figure being:
Total capital ex penditure in 1998/ 99 is ex pected to reach
£800 million, including £157 million on the Littlewoods stores
prior to their opening in Autumn 1998 and the modernisation of
ex isting Marks & Spencer stores in the same locations. The
ex pected pattern of ex penditure in the years to 31 March 2000 is
shown below compared to the last three years:
COSTS
A number of special factors affected UK costs in 1997/ 98, and
will impact profits in the year ahead. These include the following:
UK pension fund
Provision has been made for an increase of £20 million in the
CompanyÕs contribution following the A CT changes. The cost will
be more accurately defined when the triennial actuarial valuation
is completed in 1998/ 99.
1000
750
500
250
01995/ 96 1996/ 97 1997/ 98 1998/ 99 1999/ 2000
ADDITIONAL FOOTAGE
000 sq ft UK OVERSEAS
600
500
400
300
200
100
01995/ 96 1996/ 97 1997/ 98 1998/ 99 1999/ 2000
CAPITAL EXPENDITURE
£ million UK OVERSEAS
•
•
Total £739.7m
•
UK footage
development and
modernisation £276.1m
Other UK £152.9m
Littlewoods
acquisition £192.5m
Overseas £118.2m
•
FINAN CIAL REVIEW
34