Marks and Spencer 2003 Annual Report Download - page 9

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www.marksandspencer.co m 7
Capital structure
The total movements in net debt comprise the amounts shown in the table below: £m
Opening net debt (1,907.0)
Free cash flow 606.1
Equity dividends (225.4)
Net sale of fixed asset investments 4.3
Acquisitions and disposals (30.8)
Issue of new shares under employee share schemes 19.6
Purchase of own shares (141.7)
Redemption of B shares (158.0)
Exchange movement 1.5
Closing net debt (1,831.4)
Purchase of own shares
During the financial year 44,894,601 ordinary shares (representing 2% of issued share capital of Marks and Spencer
Group p.l.c.) were purchased in the market for a total cost of £141.7m, at a weighted average price of 316p.
B share redemption
On 25 September 2002 and 25 March 2003, 181,478,363 and 43,905,265 B shares respectively, were redeemed at par, at
a total cost of £158.0m. Following this redemption, 168,819,801 B shares remain in issue. The next opportunity for
redemption will be September 2003.
Financing
The Medium Term Note (MTN) programme was renewed in September 2002 and Marks and Spencer Financial Services
p.l.c. was added as an Issuer. Five new MTNs were issued during the year by Marks and Spencer Financial Services with
a sterling equivalent of £75.1m and maturities ranging from one to three years. The Group’s total outstandings within this
programme at the end of the financial year were equivalent to £1,754.8m (last year £2,062.6m).
Debt raised to fund the Financial Services operation is a mix of short to medium term instruments designed to match, on a
portfolio basis, the income stream from its customers. The balance of debt, raised to introduce a level of gearing into the
retail balance sheet, has a range of maturity terms, the first being due for repayment in November 2006, to reduce the
repayment risk of the Group.
We currently have committed facilities of £385m available together with uncommitted bank facilities of £455m supporting
our £1bn Commercial Paper programme.
Average interest rates on borrowings were lower during the year at 5.8% (last year 5.9%). Interest cover was 17.7 times and
fixed charge cover was 7.6 times.
2,500
2,000
1,500
1,000
500
A
03 M
03 J
03 J
03 S
03 O
03 N
03 J
04 F
04 J
04 M
06 J
06 J
06 A
06 N
06 D
06 J
07 N
11 S
15
A
04 D
05 J
06
Cumulative UK Debt Maturity £m USD GBP EUR
D
26