Marks and Spencer 2000 Annual Report Download - page 6

Cash flow
The analysis of the increase in net debt shows the operating cash
flows within Retailing and Financial Services activities. The cash
outflow from Financial Services operating activities includes a
£206.2m increase in loans and advances to customers.
Of the resulting net debt of £1,251m, £1,616m relates to
Financial Services. (See Balance Sheet commentary below.)
Cash flow analysis £m
Net debt at 31 M arch 1999 (1,182)
Cash inflow from Retail operating activities 728
Cash outflow from Financial Services
operating activities (87)
Capital expenditure (net of disposals) (167)
Dividends (413)
Tax (146)
Other 16
Increase in net debt (69)
Net debt at 31 M arch 2000 (1,251)
New footage
During the year, total worldwide footage (excluding Canadian
closures) increased by 300,000 sq ft as shown below:
sq ft
UK 300,000
Europe (130,000)
North America 130,000
300,000
Stores totalling 300,000 sq ft were closed in Canada, leaving
net worldwide footage unchanged at 15.4m sq ft.
New store openings account for 66% of additional UK
footage mainly because of the new Braehead store in Glasgow
(91,000 sq ft) and the relocation of our Manchester store
(198,400 sq ft replacing the 98,800 sq ft temporary site).
Seven European stores were closed during the year –
Dortmund, Essen, Wuppertal and Frankfurt (Nord West Zentrum)
in Germany and Grand Littoral (Marseille), Rouen and Parinor
in France. Two new stores were opened (Plaza Catalunya in
Barcelona and the Zeil in Frankfurt). The overall effect was
to reduce European footage by 130,000 sq ft.
Brooks Brothers US opened 19 new stores, and closed
four stores, resulting in net additional footage of 83,000 sq ft.
Openings include a new flagship store at Fifth Avenue in
New York (22,400 sq ft).
Capital expenditure
Capital expenditure (gross) during the year totalled £451m.
Capital expenditure is expected to fall in the financial year
2000/01. We plan to open a further 230,000 sq ft of selling
space, 64% of which will be in the UK.
Financing
During the financial year the Medium Term Note (‘MTN’)
programme was increased to £2.0bn and this has been used as a
flexible and cost effective source of funds. 23 MTNs were issued
during the year in various currencies with a sterling equivalent of
£768m. Maturities ranged from 6 months to 7 years and were
swapped into operating currencies. The Group’s total
outstandings within this programme at the end of the financial
year were equivalent to £1,387m.
Other sources of finance were US$ Commercial Paper and
bank borrowings both in the London money market and by
individual international subsidiaries. A committed facility of
$50m and uncommitted credit facilities of £655m are in place
in the UK.
Details of the maturity profile of borrowings are given in
note 21B, page 37.
During the year, both the leading credit agencies reduced
the Group’s long-term credit ratings: Standard & Poor’s to AA
and Moody’s to Aa3.
Balance sheet
The Group balance sheet consolidates Retailing and Financial
Services businesses which have very different characteristics.
The salient figures are disaggregated below:
Retail & Financial Services balance sheets 1 April 2000
FINANCIAL TOTAL
RETAILING SERVICES GROUP
2000 2000 2000
£m £m £m
Fixed assets 4,282.0 16.4 4,298.4
Stocks 474.4 – 474.4
Loans & advances to customers – 2,141.4 2,141.4
Other debtors 334.9 78.9 413.8
Net cash/(debt) 364.5 (1,615.9) (1,251.4)
Trade & other creditors (982.7) (172.1) (1,154.8)
Net assets 4,473.1(1) 448.7 4,921.8
(1) Retailing includes £21.4m of liabilities classified as
unallocated in the segmental analysis (see note 2, page 25).
Loans and advances to customers have increased to £2.1bn (last
year £1.9bn). Within this, £1.5bn relates to personal lending
with the balance representing storecard debt.
4Marks and Spencer p.l.c.
Financial review