Marks and Spencer 2007 Annual Report Download - page 30

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28 MARKS AND SPENCER GROUP PLC www.marksandspencer.com/annualreport2007
Financial review
Revenue
UK Retail International Retail
2007 £7,977.5m £610.6m
2006 £7,275.0m £522.7m
Revenue
Total revenues were up 10.1% with strong performances in both
the UK and international businesses.
UK revenues were up 9.7% with like-for-like growth at 6.1%
despite much tougher comparatives in the second half of the
financial year and disruption to our stores as we continued the
store modernisation programme. During the year, we added
2.7% of space (on a weighted average basis), 4.5% in food and
1.8% in general merchandise.
International revenues were up 16.8% with strong performances
in both owned and franchised stores, up 14.0% and 21.5%
respectively. This was driven by strong like-for-like performance
and 23 new store openings.
Operating profit
UK Retail International Retail
2007 £956.5m £87.5m
2006 £790.1m £65.7m
Operating profit
Operating profit before property disposals was £1,044.0m,
up 22.0%.
In the UK, operating profit before property disposals was up
21.1% at £956.5m, reflecting strong revenue growth and further
gross margin gains. UK gross margin was 43.4%, an increase
of 60 basis points on the previous year. Although this was less
than we had indicated at the half year end, it reflects our
decision to keep inventory clean at the end of the fourth quarter.
At the same time we managed our operating costs tightly.
General merchandise gross margin was up 120 basis points to
52.6% driven by better buying. Food gross margin at 34.0%
was level on the year.
UK operating costs, before bonus, were up 7.7% to £2,431.7m
(last year £2,257.4m). This reflected the ongoing investment in
the growth of the business through our staff, stores and
marketing. Increasing underlying cost pressures in areas such
as energy, fuel, rent and rates have been well managed.
Total +21.1% +33.2%
Like-for-like +6.1% +8.3%
Total +9.7% +16.8%
Summary of results 2005 2006 2007
Group Summary £m £m £m
Continuing operations before property disposals and exceptional items
Revenue 7,490.5 7,797.7 8,588.1
Operating profit 649.1 855.8 1,044.0
Net finance costs (93.0) (104.4) (78.8)
Adjusted profit before tax 556.1 751.4 965.2
Profit/(loss) on property disposals (0.4) (5.7) 1.9
Exceptional items (50.6) – (30.4)
Group profit before tax from continuing operations 505.1 745.7 936.7
Revenue year on year (1.2%) +4.1% +10.1%
Operating profit year on year n/a +31.8% +22.0%
Interest cover 6.2x 7.0x 10.5x
Dividend per share 12.1p 14.0p 18.3p
Earnings per share from continuing operations
Basic 17.6p 31.3p 39.1p
Adjusted 19.2p 31.4p 40.4p