Marks and Spencer 1999 Annual Report Download - page 27

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25
MARKS AN D SPEN CER p.l.c.
2. Segmental information (CO N TIN UED )
(3) UKretail turnover including VAT comprises clothing, footwear and gifts £• m (last year £4,196.0m); home furnishings £• m (last year £308.0m) and
foods £• m (last year £2,787.6m).VAT on UK retail turnover was £• m (last year £690.5m).
(4) O perating profit includes pre-opening costs of £• m (last year £14.4m) for Europe and £• m (last year £0.1m) for Far East.
(5) Turnover originates in the following geographical segments: United Kingdom £• m (last year £7,082.2m);Europe £• m (last year £440.5m);The
Americas £• m (last year £629.5m) and Far East £• m (last year £71.8m).
(6) The value of goods exported from the UK, including shipments to overseas subsidiaries, amounted to £• m (last year £440.2m).
TURNOVER AND OPERATING PROFITS FOR THE AMERICAS AND FAR EAST COMPRISE:
TURN O VER O PERATIN G PRO FIT
2000 1999 2000 1999
£m £m £m £m
The Americas
Brooks Brothers (including Japan) 345.9 12.4
Kings Super Markets 245.5 10.0
Marks & Spencer (including Canada)(1) 40.0 (4.6)
Corporate expenses – (2.0)
631.4 15.8
Far East
Stores 90.8 (14.5)
O ther(2) – 11.0
90.8 (3.5)
(1) 1999 the operating loss for Marks & Spencer Canada included a charge for restructuring costs of £3.4m.
(2) The profits generated from sourcing merchandise and technological services in H ong 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 “other”.
The results of overseas subsidiaries have been translated using average rates of exchange ruling during the year. The movements in exchange rates used for
translation, compared to last year, have reduced overseas sales by £• m and overseas operating profit by £• m. In addition, despite the Group’s hedging
arrangements, the strength of sterling has led to an increase in the cost of sales for our overseas subsidiaries, who import UK sourced M&S merchandise.
The increase in cost of sales has reduced overseas margins by approximately £• m, £• m of which relates to Europe.
3. O perating profit
2000 1999
Before After
exceptional Exceptional exceptional
items items items As restated
£m £m £m £m
Tur no ve r 8,224.0
Cost of sales (5,450.7)
Gross profit 2,773.3
Staff costs (see note 9) 1,107.9
O ccupancy costs 288.3
Repairs, renewals and maintenance of fixed assets(6) 103.6
D epreciation(6) 300.4
O ther costs(3)(4) 461.1
Total net operating expenses(5) (2,261.3)
O perating profit 512.0
The directors consider that the nature of the business is such that the analysis of expenses shown above is more informative than that set out in the
formats of the Companies Act 1985.
(1) The £• m charge is in respect of UK restructuring costs and represents the cost of rationalising the Group’s head office functions.
(2) Following the recent deterioration in results, we reviewed the carrying value of fixed assets in accordance with FRS11,‘Impairment of Fixed Assets and
Goodwill’.This review indicated that it would be appropriate to adjust the carrying value of European fixed assets. Accordingly, a provision of £• m was
made in the first half of this year to adjust those fixed assets to their estimated recoverable amount.
N OTES TO THE FIN AN CIAL STATEMEN TS
ANNUAL REPORT AND FIN ANCIAL STATEMENTS 1999