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101
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
OUR BUSINESSOUR PERFORMANCEGOVERNANCEFINANCIAL STATEMENTS
8 EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue
during the year.
The underlying earnings per share fi gures have also been calculated based on earnings before items that are one-o in nature, material
by size and are considered to be distortive of the true underlying performance of the business (see note 5). These have been calculated to
allow the shareholders to gain an understanding of the underlying trading performance of the Group.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. The Group has four classes of dilutive potential ordinary shares being those share options granted to employees
where the exercise price is less than the average market price of the Company’s ordinary shares during the year, unvested shares granted
under the Deferred Share Bonus Plan, unvested shares granted under the Restricted Share Plan and unvested shares within the
Performance Share Plan that have met the relevant performance conditions at the end of the reporting period.
Details of the underlying earnings per share are set out below:
2016
£m
2015
£m
Profi t attributable to equity shareholders of the Company 406.9 486.5
Add/(less) (net of tax):
Net M&S Bank charges incurred in relation to the insurance mis-selling provision 40.2 10.9
Restructuring credits/(costs) (7.3) 3.9
UK store review 21.7 –
UK one-o impairment costs 19.0 –
International – store closure costs and impairments 25.2 36.6
International – impairment of goodwill 19.1 –
International – other impairments 47.8 –
Profi t/(loss) on property disposal and impairment following a commitment being made to close stores 8.8 4.3
IAS 39 Fair value movement of embedded derivative 1.6 (1.0)
Net gain on acquisition of joint venture holding Bradford warehouse (9.7) –
Underlying profi t attributable to equity shareholders of the Company 573.3 541.2
Million Million
Weighted average number of ordinary shares in issue 1,635.9 1,635.6
Potentially dilutive share options under Group’s share option schemes 6.3 11 . 3
Weighted average number of diluted ordinary shares 1,642.2 1,646.9
Pence Pence
Basic earnings per share 24.9 29.7
Diluted earnings per share 24.8 29.5
Underlying basic earnings per share 35.0 33.1
Underlying diluted earnings per share 34.9 32.9
9 DIVIDENDS
2016
per share
2015
per share 2016
£m
2015
£m
Dividends on equity ordinary shares
Paid fi nal dividend 11.6p 10.8p 190.8 176.2
Paid interim dividend 6.8p 6.4p 110.9 104.5
18.4p 17.2p 301.7 280.7
The directors have proposed a fi nal dividend in respect of the year ended 2 April 2016 of 11.9p per share (last year 11.6p) amounting to a
dividend of £192.6m (last year £190.8m). The payment is subject to approval at the Annual General Meeting, to be held on 12 July 2016.
In addition, the Board have declared the payment of a Special dividend of 4.6p per share amounting to a dividend of c. £75m. Both the
Special and the Final dividends will be paid on 15 July 2016 to the shareholders on the register of members as at close of business on
3 June 2016. In line with the requirements of IAS 10 – ‘Events after the reporting period’, these dividends have not been recognised within
these results.
A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to invest their dividends in the shares of the Company.
The shares will go ex-dividend on 2 June 2016. For those shareholders electing to receive the DRIP the last date for receipt of a new election
is 24 June 2016.
The Group has a progressive dividend policy with dividends covered broadly twice by earnings as explained in the Financial Review on
page 23.