Marks and Spencer 2004 Annual Report Download - page 27

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www.marksandspencer.com
Directors’ report
Principal activities
The principal activities of the Group are Retailing and Financial Services.
Retailing consists of the Group’s retail activities under the Marks & Spencer and Kings Super Markets brand names.
Financial Services consists of the operations of the Group’s retail financial services companies, which provide credit and
account cards, personal loans, unit trust management, life assurance, personal insurance and pensions. The Group’s captive
insurance company is also included in this segment as the major part of its business is generated from the provision
of related insurance services.
Review of activities and future performance
A review of the Group’s activities and of the future development of the Group is contained within the Annual Review and
Summary Financial Statement.
Profit and dividends
The profit for the financial year, after taxation, minority interests and non-equity dividends, amounts to £549.3m (last year
£500.5m). The directors have declared dividends as follows:
Ordinary shares £m
Paid interim dividend of 4.4p per share (last year 4.0p per share) 99.5
Proposed final dividend of 7.1p per share (last year 6.5p per share) 160.7
Total ordinary dividend, 11.5p per share (last year 10.5p per share) 260.2
During the year, dividends of £3.0m (last year £6.8m) have been paid on non-equity shares.
The final ordinary dividend will be paid on 16 July 2004 to shareholders whose names are on the Register of Members at the
close of business on 4 June 2004.
Changes in share capital
(i) Issue of new ordinary shares
During the period, 13,616,646 ordinary shares in the Company were issued as follows:
•732,848 shares under the terms of the 1997 Executive Share Option Scheme at prices between 260p and 305p;
•2,347,981 shares under the terms of the 2000 Executive Share Option Scheme at prices between 195p and 256p; and
•10,535,817 shares were issued under the terms of the United Kingdom Employees’ Save As You Earn Share Option
Scheme at prices between 156p and 330p.
(ii) Purchase of ordinary shares
The Company is authorised by the shareholders to purchase, in the market, the Company’s own shares, as permitted under
the Company’s Articles of Association. The Company engages in share buybacks to create value for the shareholder, when
cash flow permits and there is not an immediate alternative investment use for the funds. During the year, the Company
purchased and subsequently cancelled 18,490,000 ordinary shares at a cost of £52.9m, with a nominal value of £4.6m,
at prices between 268.2p and 313.4p, representing 0.8% of its weighted average issued share capital. This authority is
renewable annually and approval will be sought from shareholders at the Annual General Meeting in 2004 to renew the
authority for a further year.
(iii) Redemption of B shares
During the year the Company redeemed 47,575,038 B shares at par.
Major shareholders
As at 11 May 2004, the Company’s register of substantial shareholdings showed the following interests in 3% or more of the
Company’s shares:
Ordinary % share
shares capital
Brandes Investment Partners, LLC 293,253,186 12.94
The Capital Group Companies, Inc. 108,607,956 4.79
Artisan Partners Limited Partnership 83,676,290 3.69
Legal & General Investment Management 80,630,319 3.56
In addition, JP Morgan has notified a holding of 123,275,970 ordinary shares (5.44%) in the form of American Depositary
Receipts, 118,808,154 of which are included in the above figures for Brandes Investment Partners.