Marks and Spencer 1998 Annual Report Download - page 55

(2) The geographical segments disclose turnover and operating profit by destination and reflect directorial responsibility.
(3)
UK retail turnover including VAT comprises clothing, footwear and gifts £4,309.5m (last year £3,988.2m); home furnishings £320.4m
(last year £297.3m) and foods £2,776.1m (last year £2,714.3m). VAT on UK retail turnover was £710.2m (last year £650.3m). Since
the last financial year, sales of certain lines have been transferred from gifts to home furnishings. Comparatives have been restated.
(4) Operating profit includes pre-opening costs of £7.6m (last year £11.6m) for Europe and £2.0m (last year £0.7m) for Far East.
(5) Turnover originates in the following geographical segments: United Kingdom £7,123.5m (last year £6,713.7m); Europe £421.5m
(last year £446.2m); The Americas £603.8m (last year £577.5m) and Far East £94.5m (last year £104.5m).
The value of goods ex por ted from the UK, including shipments to overseas subsidiaries, amounted to £469.6m
(last year £ 458.5 m).
TURNOVER AND OPERATING PROFITS FOR THE AMERICAS AND FAR EAST COMPRISE:
TURNOVER OPERATING PROFIT
1998 1997 1998 1997
£m £m £m £m
The Americas
Brooks Brothers (including Japan) 329.6 304.4 15.8 15.4
Kings Super Markets 232.3 229.2 10.4 11.6
Marks & Spencer (including Canada)(1) 44.3 46.4 (8.3) (5.0)
Corporate ex penses –Ð(1.1) (1.0)
606.2 580.0 16.8 21.0
Far East
Stores 128.3 144.8 6.4 22.9
Other( 2) –Ð11.9 9.8
128.3 144.8 18.3 32.7
(1) The operating loss for Marks & Spencer Canada is stated after a charge of £3.4m for restructuring costs (last year £nil).
(2) The profits generated from sourcing merchandise and technological services in Hong Kong together with the costs of an overseas
office in mainland China and related research costs in Taiwan and Japan, are grouped within Far East under ÒotherÓ.
The results of overseas subsidiaries have been translated using average rates of ex change prevailing during the financial year. The
changes in rates compared with last year have had a significant effect on overseas turnover and operating profits repor ted above. The
table below sets out the percentage increases in repor ted turnover and operating profit for each overseas segment together with the
increase that would have been reported had ex change rates remained constant.
TURNOVER Inc./ (Dec.) % OPERATING PROFIT Inc./ (Dec.) %
As repor ted At constant As reported At constant rates
rates Translation Transactions(1)
and Translation
Europe (ex cluding UK) (2.4) 10.1 (13.0) (5.7) 25.7
The A mericas 4.5 8.9 (20.0) (16.3) (15.4)
Far East (11.4) (9.4) (44.0) (42.6) (40.9)
Total Overseas (0.3) 7.3 (25.7) (21.3) (7.6)
(1) A djusts for the effect of ex change rate movements on the local currency operating profits of overseas subsidiaries which impor t UK
sourced M&S merchandise for sale in the local market, as well as the effects of translation.
The movements in ex change rates compared to the same period last year have resulted in translation losses which reduced reported
overseas sales by £97.2m and operating profits by £4.0m.
In addition, despite the GroupÕs hedging arrangements, the strength of sterling has led to an increase in the cost of sales for our
overseas subsidiaries, which import UK sourced M&S merchandise. The increase in cost of sales has reduced overseas margins by
approximately
£12.6m, of which £11.8m relates to Europe.
2 SEGMENTAL INFORMATION continued
NO TES TO TH E FIN AN CIAL STATEM EN TS
MA RKS A ND SPENCER p.l.c. 53