Marks and Spencer 1998 Annual Report Download - page 56

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1998 1997
£m £m £m £m
Turnover 8,243.3 7,841.9
Cost of sales (5,322.9) (5,103.8)
Gross profit 2,920.4 2,738.1
Staff costs (see note 9) 985.7 907.8
Occupancy costs 257.0 242.8
Repairs, renewals and maintenance of fixed assets 92.9 79.5
Depreciation 166.5 162.8
Other costs before exceptional operating income(1) 354.8 307.3
Exceptional operating income( 2) (53.2) Ð
Total other costs 301.6 307.3
Total net other ex penses( 3) (1,803.7) (1,700.2)
Operating profit 1,116.7 1,037.9
The directors consider that the nature of the business is such that the analysis of ex penses shown above is more informative than that
set out in the formats of the Companies A ct 1985.
(1) Included in other costs is the remuneration of the auditors for the Group audit of £1.0m (last year £0.9m) and £0.4m (last year £0.3m)
for the Company audit. A lso included in other costs is the remuneration of the auditors for the provision of non-audit services to the
Group of £0.7m (last year £0.7m) of which £0.2m (last year £0.3m) relates to the Company.
(2) Other costs are stated after crediting £53.2m received in respect of VAT overpaid on sales of earlier accounting periods following the
Court of Appeal decision in a case brought by Littlewoods Home Shopping. The decision clarified how VAT should be calculated on
retail sales, amending previous interpretation. The overpayment of £53.2m was repaid in full following the acceptance of the Cour t of
Appeal decision by the tax authorities.
(3) Included in total other ex penses are rentals under operating leases, comprising £7.5m for hire of plant and machinery (last year
£11.4m) and £104.2m of other rental costs (last year £92.2m).
1998 1997( 1)
£m £m £m £m
Bank and other interest income 275.2 246.1
Less: amounts included in turnover of Financial Services (221.1) (179.7)
54.1 66.4
Interest ex penditure (58.8) (60.1)
Less: intra group interest charged to cost of sales 58.8 59.6
–(0.5)
Net interest income 54.1 65.9
Interest ex penditure comprises:
Amounts repayable within five years:
Bank loans, overdrafts and commercial paper (26.5) (32.2)
Medium term notes (4.4) Ð
81
/4% Guaranteed bonds 1996 –(1.4)
73
/8% Guaranteed bonds 1998 (10.2) (8.7)
US$ Promissory note 1998 (17.7) (17.8)
(58.8) (60.1)
(1) Last year, Òbank and other interest incomeÓ and Òinterest ex penditureÓ were both shown gross of intra group receipts/ payments of
interest amounting to £33.1m. Comparative amounts have been restated to ex clude intra group interest. There is no effect on net
interest income or net cash inflow from returns on investments and ser vicing of finance.
3 OPERATING PROFIT
4 NET INTEREST INCOME
NO TES TO TH E FIN AN CIAL STATEM EN TS
54