Marks and Spencer 2003 Annual Report Download - page 34

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32 Marks and Spencer Gro up p.l.c.
Notes to the financial statements
3. Operating profit 2003 2002
Continuing1Discontinued Continuing Discontinued
operations operations Total operations operations Total
£m £m £m £m £m £m
Turnover 8,077.2 – 8,077.2 7,619.4 516.0 8,135.4
Cost of sales (5,137.9) – (5,137.9) (4,888.6) (302.8) (5,191.4)
Gross profit 2,939.3 – 2,939.3 2,730.8 213.2 2,944.0
Employee costs (see note 10) (1,116.2) – (1,116.2) (1,093.6) (99.8) (1,193.4)
Occupancy costs (264.7) – (264.7) (249.4) (60.1) (309.5)
Repairs, renewals and maintenance of fixed assets (114.8) – (114.8) (111.8) (4.6) (116.4)
Depreciation (234.9) – (234.9) (225.9) (23.7) (249.6)
Other costs2(490.8) – (490.8) (421.0) (52.8) (473.8)
Total net operating expenses3(2,221.4) – (2,221.4) (2,101.7) (241.0) (2,342.7)
Less provision made in 2001 –––– 42.5 42.5
Operating profit 717.9 – 717.9 629.1 14.7 643.8
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.
1Operating profit includes £43.9m exceptional operating charges, of which £2.5m is included within employee costs and £41.4m within other costs.
2Included in ‘Other costs’ is the auditors’ remuneration for audit and non-audit services as follows:
Group Company
2003 2002 2003 2002
£m £m £m £m
Audit fees 0.9 1.0 0.1 0.1
Non-audit services 1.4 2.5 –0.8
Included in non-audit fees above are amounts paid to PricewaterhouseCoopers LLP for non-audit related services, relating
to taxation services £0.4m (last year £0.3m), general advisory services £0.6m (last year £0.3m) and corporate finance and
assurance related services £0.4m (last year £1.9m).
3Included in ‘Total net operating expenses’ are rentals under operating leases, comprising £3.8m for hire of plant and machinery (last year £7.1m)
and £102.0m of other rental costs (last year £124.6m).
4. Exceptional items
A Exceptional operating charges 2003 2002
£m £m
Head office relocation 7.6 –
Restructuring of general merchandise logistics operations 36.3 –
Exceptional operating charges 43.9 –
B Profit on sale of property and other fixed assets 2003 2002
£m £m
Profit on sale of property and other fixed assets 1.6 41.2
C Loss on sale/termination of operations 2003 2002
£m £m
Loss on sale/termination (12.3) (102.8)
Goodwill previously written off –(368.2)
(12.3) (471.0)
Less provision made in 2001 10.8 104.3
Loss on sale/termination of operations (1.5) (366.7)
The loss on sale/termination of operations in the current year is analysed as follows: Continental Brooks
Europe Brothers Total
£m £m £m
Net closure costs (10.8) (1.5) (12.3)
Less provision made in 2001 10.8 – 10.8
Loss on sale/termination of operations – (1.5) (1.5)