Marks and Spencer 2004 Annual Report Download - page 35

33
www.marksandspencer.com
2. SEGMENTAL INFORMATION
A Classes of business
The Group has two classes of business: Retailing and Financial Services.
Turnover Operating profit Operating assets
2003 2003 2003
2004 As restated 2004 As restated 2004 As restated
£m £m £m £m £m £m
Retailing activities 7,971.5 7,689.2 773.3 642.7 3,071.5 2,626.9
Before exceptional operating charges 815.4 686.6
Exceptional operating charges (42.1) (43.9)
Financial Services1330.0 329.9 50.6 86.4 601.2 648.7
Total 8,301.5 8,019.1 823.9 729.1 3,672.7 3,275.6
Profit on sale of property and other fixed assets 18.7 1.6
Net loss on sale/termination of operations –(1.5)
Net interest expense (45.8) (40.5)
Other finance (charges)/income (15.2) 27.0
Profit on ordinary activities before taxation 781.6 715.7 3,672.7 3,275.6
Unallocated net liabilities (1,218.7) (1,167.3)
Net assets 2,454.0 2,108.3
B Geographical split
The geographical segments disclose turnover and operating profit by destination and reflect management responsibility.
Turnover Operating profit Operating assets
2003 2003 2003
2004 As restated 2004 As restated 2004 As restated
£m £m £m £m £m £m
United Kingdom
Retail 7,293.7 7,027.1 725.9 599.9 2,954.2 2,510.2
Before exceptional operating charges 768.0 643.8
Exceptional operating charges (42.1) (43.9)
Financial Services1330.0 329.9 50.6 86.4 601.2 648.7
7,623.7 7,357.0 776.5 686.3 3,555.4 3,158.9
International Retail 677.8 662.1 47.4 42.8 117.3 116.7
Total 8,301.5 8,019.1 823.9 729.1 3,672.7 3,275.6
Application Note G of FRS 5 – ‘Revenue Recognition’ has been adopted for the first time in these financial statements.
The key areas affected by the adoption of the new guidance are as follows:
•a provision for customer returns has now been made representing the Group’s cumulative estimate of the amount
of merchandise sold during the year which will be returned and refunded in the following year;
•staff discounts, previously reported as part of employee costs, have been reclassified and are now deducted from
turnover; and
•discounts provided to certain customers at Kings Super Markets, previously reported as a deduction from gross
margin, have been reclassified as deductions from turnover.
These changes have been accounted for by way of a prior year adjustment and previously reported figures have been
restated accordingly. The impact of adopting the new policy for the current financial year is to reduce turnover by £49.8m
with a negligible impact on profit before tax. The impact of adopting the policy for the year ended 29 March 2003 was to
reduce turnover by £58.1m and profit before tax by £3.4m.
1Operating profit for Financial Services includes £9.3m of merchant fee income (last year £14.1m) arising on Marks & Spencer Chargecard transactions.
This fee is payable by UK Retail and has been deducted in arriving at UK Retail operating profit.
2UK Retail turnover including VAT comprises Clothing £4,032.6m (last year £3,976.5m); Home £526.6m (last year £542.6m) and Foods £3,490.2m (last
year £3,242.3m). VAT on UK Retail turnover was £755.7m (last year £734.3m). Since last year end, £138.0m of gifts have been reclassified to be
included within Home. Certain other product lines have also been reclassified to reflect management responsibility. As a result of this change,
comparative figures have been restated.
3Turnover from continuing operations originates in the following geographical segments: United Kingdom £7,783.4m (last year £7,500.5m) and
International £518.1m (last year £518.6m).
4The value of goods exported from the UK, including shipments to international subsidiaries, amounted to £293.0m (last year £271.6m).