Marks and Spencer 2015 Annual Report Download - page 15

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OUR BUSINESSOUR PERFORMANCE
GOVERNANCE
FINANCIAL STATEMENTS
13
ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
OUR BUSINESSOUR PERFORMANCE
OUR PLAN IN ACTION:
STRONG CASH
GENERATION
We h ave bec ome a mor e a gil e a nd
fl exible organisation, resulting in
improved working capital. Tactical
supply chain initiatives such as our
move to ‘push allocation’ – whereby
stock is replenished automatically
based on customer demand – have
resulted in better, more e cient
stocking, saving us time and money.
Capital expenditure this year fell
to £527m, from £710m, following a
per iod of majo r invest ment to bring
our infrastructure up to date. We are
now in a good position to maintain
our existing assets while also having
the headroom to invest in new ones
as we fulfi l our ambition to be an
international, multi-channel retailer.
Prudent cost management has led to strong cash
generation across the business. We run our stores more
e ciently than in the past. This year we launched a new
Resource Planning System to increase the e ectiveness
of our colleagues’ work patterns. We also saw the benefi ts
of a new payroll system which centralised administration.
Our free cash fl ow before dividends was £524.2m this year,
compared to £427.9m last year.
See more in Financial review on p16-19