Marks and Spencer 2013 Annual Report Download - page 37

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Financial review Marks and Spencer Group plc Annual report and financial statements 2013 35
Overview Strategic review Financial review Governance Financial statements and other information
Summary of results
52 weeks ended
30 March
2013
£m
31 March
2012
£m % variance
Group revenue 10,026.8 9,934.3 +0.9
UK 8,951.4 8,868.2 +0.9
International 1,075.4 1,066.1 +0.9
Underlying operating profit 781.6 810.0 -3.5
UK 661.4 676.6 -2.2
International 120.2 133.4 -9.9
Underlying profit before tax 665.2 705.9 -5.8
Non-underlying items (100.9) (47.9)
Profit before tax 564.3 658.0 -14.2
Underlying earnings per share 32.7p 34.9p -6.3
Basic earnings per share 29.2p 32.5p -10.2
Dividend per share (declared) 17.0p 17.0p level
Revenues
Group revenues were up 0.9% (+1.3% on a constant currency
basis), driven by sales growth in both International and the UK,
with particularly strong growth in Food.
Total revenue % Q1 Q2 Q3 Q4 FY
UK
Clothing -5.0 0.2 -2.1 -2.6 -2.4
Home -6.1 -1.4 -2.5 1.4 -2.2
General Merchandise -5.1 0.1 -2.2 -2.2 -2.4
Food 2.9 3.9 2.7 6.3 3.9
Total UK -0.9 2.1 0.3 2.6 0.9
International* 0.9 6.1 4.1 7.0 4.5
Total Group* -0.7 2.5 0.6 3.1 1.3
Like-for-like revenue % Q1 Q2 Q3 Q4 FY
UK
General Merchandise -6.8 -1.8 -3.8 -3.8 -4.1
Food 0.6 1.6 0.3 4.0 1.7
Total UK -2.8 0.0 -1.8 0.6 -1.0
* At constant currency
UK revenues were up 0.9% in total with a like-for-like decrease
of 1.0%. We added 2.8% of space, 2.6% in General
Merchandise and 3.1% in Food, on a weighted average basis.
International revenues were up 0.9%, (4.5% on a constant
currency basis). Our owned businesses in India and China
delivered a strong performance, driven by good like-for-like
growth and the opening of new space. Similarly, our franchise
business continued to perform well, especially the Middle East
region which delivered strong growth. Despite continuing tough
trading conditions impacting the full year performance in the
Czech Republic and the Republic of Ireland, there was an
improvement in trend in the second half of the year.
Operating profit
Underlying operating profit was £781.6m, down 3.5%.
In the UK, underlying operating profit was down 2.2% at
£661.4m. Gross margin was up 10bps at 40.9%. General
Merchandise gross margin was up 45bps at 51.8% as a result
of improved markdown management and ongoing sourcing
initiatives, which more than offset input cost pressures from
areas such as wages. Food gross margin was up 35bps at
31.7% due to improved buying, combined with better
management of promotional spend offsetting commodity price
inflation.
Underlying UK operating costs were up 1.8% to £3,049.8m. A
breakdown of the costs is shown below:
52 weeks ended
30 March
2013
£m
31 March
2012
£m
%
variance
Retail staffing 928.9 889.2 +4.5
Retail occupancy 1,030.7 1,030.9 –
Distribution 405.1 398.1 +1.8
Marketing and related 155.3 161.8 -4.0
Support 529.8 515.0 +2.9
Total 3,049.8 2,995.0 +1.8
Retail staffing costs increased due to investment made in
delivering customer service and increased space together with
the impact of the annual pay review.
Occupancy costs were level on the year with increases from
rent, rates and utilities offset by a decrease in depreciation.
Distribution costs continue to be managed tightly despite
inflationary pressure and volume increases in Food and
Multi-channel, as we continued to see the benefits of initiatives
to improve supply chain efficiency.
The reduction in Marketing and related costs reflects more
effective use of marketing spend within both Foods and GM.
Increase in support costs reflect the impact of annual pay
increases and higher pension costs associated with auto-
enrolment, which will continue into the coming year.
The underlying UK operating profit includes a contribution from
the Group’s continuing economic interest in M&S Bank of
£51.1m, last year £50.7m.