Marks and Spencer 2005 Annual Report Download - page 39

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MARKS AND SPENCER GROUP PLC 37
4EXCEPTIONAL ITEMS
A Exceptional operating charges 2005 2004
£m £m
Head office relocation 8.8 19.6
Head office restructuring programme 6.3 22.5
Board restructure 8.4 –
Closure of Lifestore 29.3 –
Defence costs 38.6 –
91.4 42.1
B (Loss)/profit on sale of property and other fixed assets 2005 2004
£m £m
(Loss)/profit on sale of property and other fixed assets (0.4) 18.7
C Profit on sale/closure of operations 2005 2004
£m £m
Profit/(loss) arising on sale/closure 208.9 (26.8)
Release/utilisation of prior year provision 9.7 26.8
218.6 –
Financial Continental
Services Europe Total
£m £m £m
Net sale proceeds less net assets 208.9 – 208.9
Release of prior year provision – 9.7 9.7
Net profit on sale/closure of operations 208.9 9.7 218.6
The loss on sale/closure of operations in the prior year relates to the closure of the Continental European operations.
On 9 November 2004, the Group completed the sale of Marks and Spencer Retail Financial Services Holdings Limited to HSBC Holdings
plc. The net sale proceeds were £533.6m (see note 30B) after accounting for a pre-sale dividend of £235.0m together with associated
disposal costs. At the same time, the Group and HSBC entered into a relationship under which the Group will continue to share in the
success of the business. Under this relationship, the Group will receive income in the form of fees representing an amount equivalent to
costs incurred, 50% of the profits of M&S Money (after a notional tax charge and after deducting agreed operating and capital costs)
together with an amount relating to sales growth. In the period since 9 November 2004, the fees received were £16.4m.
In addition, the Group has also received £15.1m for costs incurred as part of the transition of M&S Money to HSBC and £1.1m for rent.
The Group also conducts settlement transactions with M&S Money in the normal course of business. At 2 April 2005, the amount owed
by M&S Money was £16.2m.
5NET INTEREST EXPENSE 2005 2004
£m £m £m £m
Bank and other interest income 169.9 248.5
Less: amounts included in turnover of Financial Services (153.2) (235.2)
16.7 13.3
Interest expenditure (183.6) (136.1)
Less: interest charged to cost of sales of Financial Services 64.6 77.0
(119.0) (59.1)
Net interest expense (102.3) (45.8)
Interest expenditure comprises:
Amounts repayable within five years:
Bank loans, overdrafts and other borrowings (43.5) (22.2)
Syndicated bank facility (7.8) –
Medium term notes (64.6) (68.1)
Securitised loan notes (1.4) (1.2)
(117.3) (91.5)
Amounts repayable after five years:
Medium term notes (47.2) (24.8)
Securitised loan notes (19.1) (19.8)
(66.3) (44.6)
(183.6) (136.1)