TIDMDEB
RNS Number : 0727K
Debenhams plc
13 April 2010
13 April 2010
DEBENHAMS PLC
HALF YEAR RESULTS FOR 26 WEEKS ENDED 27 FEBRUARY 2010
Financial Highlights
· Gross transaction value up 8.4%
· Like-for-like sales up 0.3%
· Gross margin up 70bps
· Headline profit before tax and exceptionals* ahead of market expectations
at GBP123.6m, up 18.6%
· Adjusted earnings per share 6.5p (H1 2009: 8.3p)**
· Net debt at 27 February 2010 GBP511.5m, down GBP415.7m from a year ago
· Current trading for 31 weeks to 3 April 2010: gross transaction value up
8.6%, like-for-like sales up 0.3%, continued strong gross margin performance
*After adding back amortisation on capitalised bank fees of GBP3.1m (H1 2009:
GBP2.0m) and exceptional items of GBP6.0m (H1 2009: GBPnil)
**After adding back exceptional costs (net of tax) of GBP4.1m (H1 2009: GBPnil)
and an adjustment in respect of the prior periods for the H1 2009 taxation
charge (GBP8.4m)
Operating Highlights
· Good sales performance from own bought ranges, particularly Designers at
Debenhams
· Further progress in market share, especially childrenswear, menswear and
home*
· Exclusive Designers at Debenhams portfolio extended through launch of new
brands Principles by Ben de Lisi and H! by Henry Holland
· 4 new stores opened, creating over 400 new jobs
· Acquisition of Denmark's leading department store chain Magasin du Nord
· Continued strong growth in multi-channel business; sales up 85.9%
· 7 new international franchise stores opened year-to-date
*Sources: clothing Kantar Worldpanel Fashion 24 weeks market share data to 28
February 2010 vs. 2009; home GfK 52 weeks to December 2009.
Rob Templeman, Chief Executive of Debenhams, said:
"Throughout the last 18 months of recession, Debenhams has consistently achieved
growth in sales, margins and trading profits. We made further progress in
delivering our strategy in the first half and are pleased with our performance.
"Looking forward, we expect the trading environment to be broadly neutral for
Debenhams in the second half. We will maintain our focus on driving the
business forward through self help measures to achieve our strategic goals and
build on the good performance of the first half. We believe that the work we
have done to improve our own bought ranges, including Designers at Debenhams,
both in terms of product design, quality and value and increasing the own bought
mix, will continue to find favour with customers and provide a solid platform
for margin expansion and market share growth."
FINANCIAL SUMMARY
Note: all numbers include Magasin du Nord unless otherwise stated.
+--------------------------------+-------------+-------------+-----------+
| | H1 2010 | H1 2009 | Change |
+--------------------------------+-------------+-------------+-----------+
| Gross transaction value (GTV) | GBP1,417.2m | GBP1,307.2m | +8.4% |
| - including Magasin | | | |
+--------------------------------+-------------+-------------+-----------+
| Gross transaction value (GTV) | GBP1,329.0m | GBP1,307.2m | +1.7% |
| - excluding Magasin | | | |
+--------------------------------+-------------+-------------+-----------+
| Statutory revenue | GBP1,187.8m | GBP1,064.8m | +11.6% |
+--------------------------------+-------------+-------------+-----------+
| Like-for-like sales | | | +0.3% |
+--------------------------------+-------------+-------------+-----------+
| Gross margin(a) - including | | | +70bps |
| Magasin | | | |
+--------------------------------+-------------+-------------+-----------+
| Gross margin(a) - excluding | | | +140bps |
| Magasin | | | |
+--------------------------------+-------------+-------------+-----------+
| Operating profit before | GBP146.6m | GBP134.7m | +8.8% |
| exceptionals | | | |
+--------------------------------+-------------+-------------+-----------+
| Headline profit before tax and | GBP123.6m | GBP104.2m | +18.6% |
| exceptionals(b) | | | |
+--------------------------------+-------------+-------------+-----------+
| Profit before tax and | GBP120.5m | GBP102.2m | +17.9% |
| exceptionals | | | |
+--------------------------------+-------------+-------------+-----------+
| Net exceptional costs before | GBP6.0m | - | - |
| tax | | | |
+--------------------------------+-------------+-------------+-----------+
| Basic earnings per share(c) | 6.2p | 9.3p | -3.1p |
+--------------------------------+-------------+-------------+-----------+
| Adjusted earnings per share | 6.5p | 8.3p | -1.8p |
| (c) (d) | | | |
+--------------------------------+-------------+-------------+-----------+
| Dividend per share | Nil | Nil | N/A |
+--------------------------------+-------------+-------------+-----------+
| | 27-02-10 | 28-02-09 | |
+--------------------------------+-------------+-------------+-----------+
| Net debt | GBP511.5m | GBP927.2m | GBP415.7m |
+--------------------------------+-------------+-------------+-----------+
(a) Gross margin: gross transaction value less cost of goods sold, as a
percentage of gross transaction value
(b) After adding back GBP3.1m of amortisation on capitalised bank fees (H1
2009: GBP2.0m)
(c) Reflects the issue of 404.0m new shares in the June 2009 capital raising
(d) After adding back exceptional costs (net of tax) of GBP4.1m (H1 2009:
GBPnil) and an adjustment in respect of the prior periods for the H1 2009
taxation charge (GBP8.4m)
Enquiries
Debenhams plc
Rob Templeman, Chief Executive
Chris Woodhouse, Finance Director
Lisa Williams, Investor Relations 020 7408 3304 / 07908
483841
Financial Dynamics
Jonathon Brill 020 7269
7170
Billy Clegg 020 7269
7157
Caroline Stewart 020 7269 7227
High resolution images are available for media to view and download free of
charge from www.prshots.com/Debenhams.
A presentation will be held for analysts and investors today at 9:00am at the
Ground Floor Auditorium, Bank of America Merrill Lynch, 2 King Edward Street,
London EC1A 1HQ.
REVIEW OF THE FIRST HALF
MARKET CONDITIONS
Trading conditions across the retail sector were broadly stable during the first
half as consumers' concerns over unemployment and government finances were
countered by low interest rates and higher disposable income. The Christmas
trading period held up reasonably well in November and December. Sales were
impacted by poor weather across the UK and the Republic of Ireland in early
January but recovered in the final weeks of the half.
FINANCIAL PERFORMANCE
Debenhams recorded a good financial performance in the first half, delivering
increases in sales, margins, trading profits and market share.
Gross transaction value for the period grew by 8.4% to GBP1,417.2 million.
Excluding the impact of the acquisition of Magasin du Nord, gross transaction
value increased by 1.7%.
Like-for-like sales grew by 0.3% in the first half. A significant strand of
Debenhams' strategy is to increase sales of own bought products, whereby higher
own bought margins more than offset lower own bought sales densities. In the
fourth quarter of last year extensive in-store space moves were undertaken to
create space for both new and expanded own bought brands by reducing concession
space. The detrimental impact on like-for-like sales resulting from these moves
is estimated to be some 1.5% throughout the current financial year.
Gross margin for the 26 week period was 70 basis points higher than last year.
This includes the impact of the Magasin business which has a lower gross margin
due to its higher mix of concession sales. Excluding Magasin, gross margin
increased by 140 basis points in the half versus last year. The gross margin
gain was driven by stronger own bought sales versus concessions, careful stock
control and lower cost prices, offset by the adverse movement of sterling versus
the US dollar. Looking forward, gross margin guidance for the year is flat
including Magasin which equates to an increase of some 80 basis points excluding
Magasin (previous guidance for the latter was an increase of 50-60 basis
points).
Profitability moved ahead strongly during the first half. EBITDA before
exceptional items for the period was 5.9% higher than last year at GBP194.2
million. Headline profit before tax and exceptional items (which adds back
amortisation on capitalised debt fees of GBP3.1 million and excludes exceptional
items of GBP6.0 million) for the first half was GBP123.6 million, compared with
GBP104.2 million last year, an increase of 18.6% and ahead of market
expectations. Profit before tax and exceptional items was 17.9% higher than a
year ago at GBP120.5 million.
Net exceptional costs (before tax) of GBP6.0 million were recorded in the first
half. These are detailed in Note 4 to the financial statements. The largest
component was an exceptional cost of GBP10.1 million arising out of the
restructuring of the business in the Republic of Ireland which will ensure the
business has the flexible and right-sized workforce it needs for the future.
Basic earnings per share of 6.2 pence compared with 9.3 pence for the first half
of last year. Adjusted earnings per share (before exceptionals and a tax charge
adjustment in respect of prior periods) of 6.5 pence per share compared with 8.3
pence last year. Earnings per share calculations have been impacted by the
404.0 million of additional shares in issue following the capital raising which
took place in June 2009.
Further investment was made in Debenhams' business during the half resulting in
capital investment of GBP49.4 million, of which GBP10.1 million related to the
acquisition of Magasin. The acquisition of Magasin and the acceleration of the
store refit programme in the second half of 2010 have resulted in an increase in
the capital expenditure guidance for the full year to c.GBP115 million.
The business was strongly cash generative in the half with cash inflow from
operating activities of GBP154.4 million (H1 2009: GBP120.8 million). Net debt
at the end of the half on 27 February 2010 was GBP511.5 million. This was an
improvement of GBP415.7 million over the position at the end of the first half
last year (28 February 2009) and GBP78.8 million better than at the end of the
last financial year (29 August 2009).
The board is not proposing to pay an interim dividend.
STRATEGY UPDATE AND OPERATIONAL REVIEW
Debenhams has continued to deliver on the strategy set out 18 months ago by
focusing on measures to expand margins and gain market share whilst continuing
to invest in the future development of the business. This involves four key
areas of focus: product strategy, space expansion, multi-channel development and
balance sheet management.
Product Strategy
Debenhams' product strategy is centred around a unique mix of exclusive and
third party brands. In particular, the focus is on providing choice and
differentiation through the development of own bought product ranges, including
Designers at Debenhams.
Debenhams made further progress in market share in the first half despite the
impact in some categories of lower own bought sales densities. In the most
recently available data for the UK (source: Kantar Worldpanel Fashion 24 weeks
market share data to 28 February 2010 vs. 2009), Debenhams' total market share
in clothing, footwear and accessories remained stable. The strongest market
share performances were delivered by menswear (up 20 basis points) and
childrenswear (up 40 basis points). Womenswear market share has been impacted
by the move into lower sales density own bought ranges and the ongoing
underperformance of some of the remaining concessions. The performance of own
bought womenswear was in line with management expectations during the half.
Debenhams' share of the home market in the UK has also increased (source: GfK 52
weeks ended December 2009).
Own bought products continued to outperform concessions in the first half of the
year. Designers at Debenhams was again the strongest performing category with
sales of GBP282.1 million, up 17.7% in the first half compared with the prior
year. Overall, own bought sales increased by 9.4% over the previous year whilst
concessions declined by 22.5% (all numbers exclude Magasin and VAT).
Further progress was made during the first half to increase the own bought sales
mix, which is a key part of Debenhams' product strategy. For the core business,
excluding Magasin, own bought sales accounted for 81.4% of gross transaction
value in the first half, up from 75.6% in the same period last year. Including
Magasin, which at present has much lower own bought participation, own bought
sales accounted for 78.6% of gross transaction value in the half.
A number of new product ranges were introduced during the first half, most
notably Principles by Ben de Lisi and H! by Henry Holland which joined the
Designers at Debenhams portfolio. The launch of Principles in 125 stores saw
the return of a much-loved, much-missed high street favourite, now designed by
Ben de Lisi. Customers have responded extremely favourably to the new
collection, which arrived in store in early February, and the brand will be
expanded to all stores for Autumn Winter 2010. H! by Henry Holland is a new
direction for Designers at Debenhams, being the first in the portfolio designed
for young fashion customers. The brand launched in 60 stores at the very end of
the half and early indications are again favourable.
The new own bought brands introduced over the past 12 months have continued to
thrive and grow with extensions to both product range and store coverage in a
number including Butterfly by Matthew Williamson, women's Mantaray, Ben de Lisi
home and sports and leisure. Childrenswear brand Bluezoo has undoubtedly
contributed to the market share growth in that category over the past six
months.
Stock levels continue to be managed tightly. Total stock in the business has
increased by 14.8%, largely as a result of the significant increase in own
bought space and the acquisition of Magasin. However stock density on a
like-for-like basis was 2.5% lower at the end of the first half than the
corresponding time last year. At the end of the half terminal stocks were at an
historically low level of 2.6%.
There has been significant cost pressure on many elements of the supply chain
during the first half, including commodity prices, fuel/energy prices and
freight prices. Sterling has also continued to devalue against the US dollar.
Significant effort has therefore been required to mitigate these cost pressures.
The nature of the Debenhams' supply chain, whereby the majority of products are
sourced directly from suppliers on a "freight on board" basis - and the
longstanding supplier relationships that this model facilitates - has enabled
these cost pressures to be mitigated such that there has in fact been a margin
gain in the first half from lower cost prices compared to last year.
Space Expansion
A disciplined approach to capital expenditure which focuses on the features that
make a real difference to customers results in Debenhams achieving strong
returns from new store space and from refitting existing core stores. As such,
opening new stores and upgrading older stores are key parts of the Group's
strategy.
New stores
Total space increased by 1,085,000 square feet in the first half, including
897,000 square feet from the Magasin du Nord acquisition. Space at the end of
the first half of 12,131,000 square feet was 9.8% higher than at the start of
the period. Average space increased by 7.1% during the half (2.0% excluding
Magasin).
Four new stores were opened during the first half. These comprise a flagship
department store in Newcastle-upon-Tyne which opened in February 2010 and three
Desire stores in Kidderminster (opened September 2009), Monks Cross (opened
October 2009) and Witney (opened October 2009). Returns from new stores
continue to be very attractive and all new stores opened year-to-date are
performing in line with or better than expectations. Two further department
stores are scheduled to open in the second half of the year: Carmarthen in April
2010 and Bury in July 2010.
Store refits
It was announced at the time of the full year results in October that the store
refit programme would recommence after the Christmas/January sale trading period
having been largely on hold for the past 18 months,. The good performance of
the Cardiff store which was refitted last summer has led to an acceleration of
the programme. Major refits are underway in Glasgow, Manchester and Swindon
which will be completed by the summer. A number of store makeovers are also
planned for the second half, including the Bristol store. Brand makeovers of
Rocha.John Rocha, Red Herring and Jeff Banks are also being rolled out across
the store estate.
Looking forward, two department stores are scheduled to open in the 2011
financial year: a 125,000 square feet store in Bath which is due to open in
September 2010 and the resited Newbury store in April 2011.
International franchise stores
New international franchise stores were opened during the first half in Iran and
Vietnam, taking the total at the end of the half to 51 stores in 18 countries
(including three closures). A further five new stores have opened since the end
of the half, including market entry in Egypt and Malta. In the remainder of the
second half, new stores are scheduled to open in Azerbaijan, Iran, Kazakhstan
and Slovakia.
The international business continues to perform well despite some signs of
softening in the retail sector in some of the markets of operation. Sales
increased by 4.3% during the first half to 2.3% of the Group's gross transaction
value.
Magasin du Nord
Debenhams acquired Magasin du Nord, the leading department store chain in
Denmark, during the first half. The Group took control of the business in
November 2009.
Magasin du Nord comprises six department stores, four in the Copenhagen area
plus Århus and Odense.
Magasin has performed in line with internal expectations since acquisition and
work is now commencing to deliver the anticipated returns. This centres around:
margin expansion through increasing the own bought sales mix by introducing
selected Debenhams' brands; leveraging the Debenhams' buying infrastructure and
lowering prices to widen customer appeal; operational synergies to reduce costs;
space expansion; and introducing multi-channel activities.
Multi-channel development
Developing a true multi-channel business - rather than just a "bricks-and-mortar
retailer with a website" - is an important strategic aim. The focus is around
employing technology to increase customer choice and to widen availability and
ranging.
The multi-channel business continued to grow strongly in the first half of the
year. Sales increased by 85.9% to GBP50.6 million in the period. Some 1.5
million visits have been recorded per week.
The new look website launched in November 2009 with many additional features,
improved navigation and better online merchandising.
A number of important developments have also now been launched. In-store
ordering is now available in all stores on an assisted basis and is generating
strong returns. Technology is currently being sourced to facilitate the
introduction of self-service customer order and service points during next year.
Collect-from-store was introduced in all stores in March and is also proving
popular with customers, accounting for 22% of orders in the first month.
International delivery to seven destinations has also been launched and is
generating incremental business even though the service has yet to be marketed.
Balance sheet management
Ensuring the business has the right capital structure whilst at the same time
maintaining an appropriate level of investment for future growth continues to be
an important issue for the board.
Net debt has been reduced substantially over the past year and ended the half
GBP415.7 million lower than at the same point last year due to the capital
raising that took place in June 2009 and strong cash generation from within the
business.
During the first half, GBP175.0 million of debt was repaid (comprising GBP100.0
million in October and GBP75.0 million in January). A further GBP17.0 million
was bought back in the market in the first half. As at 13 April 2010, a total
of GBP84.7 million of debt has been bought back since the programme commenced at
an aggregate discount of c.4%.
All scheduled debt repayments of the term loan have been made including the
GBP150.0 million repayment which was originally due in May 2010. On the back of
strong cash generation and good progress on reducing net debt, work is already
well advanced towards refinancing the Group's debt prior to the May 2011
repayment date.
BOARD OF DIRECTORS
Nigel Northridge joined the board on 1 January 2010 and was appointed chairman
on 1 April 2010 following the retirement of John Lovering on 31 March 2010.
Paul Pindar will retire from the board when his term as a non-executive director
ends on 30 April 2010. The board would like to thank Mr. Pindar for his wise
counsel and valuable contribution to the Company. Dennis Millard will succeed
Mr. Pindar as senior independent director.
The board of directors as at 13 April is as follows: Nigel Northridge
(chairman), Rob Templeman (chief executive), Michael Sharp (deputy chief
executive), Chris Woodhouse (finance director), Adam Crozier (non-executive
director), Martina King (non-executive director), Dennis Millard (non-executive
director), Paul Pindar (non-executive director) and Sophie Turner Laing
(non-executive director).
RISKS AND UNCERTAINTIES
The principal risks and uncertainties for the remainder of the year are
unchanged from those detailed in the Company's Annual Report and Accounts for
2009 (see pages 36 to 38 of that document). The risks which are most relevant
to the second half of the financial year are: factors outside Debenhams' control
such as adverse economic conditions or a downturn in the retail industry;
competitive pressures in the highly competitive retail sector; and Debenhams'
ability to predict or fulfil customer demands or preferences.
CURRENT TRADING AND OUTLOOK
For the 31 weeks to 3 April 2010, gross transaction value increased by 8.6%
compared with the previous year. Like-for-like sales increased by 0.3% for the
same period. Gross margin continued to be significantly ahead of last year.
Looking forward, the trading environment is expected to be broadly neutral for
Debenhams in the second half. We will maintain our focus on driving the
business forward through self help measures to achieve our strategic goals and
build on the good performance of the first half. We believe that the work we
have done to improve our own bought ranges, including Designers at Debenhams,
both in terms of product design, quality and value and increasing the own bought
mix, will continue to find favour with customers and provide a solid platform
for margin expansion and market share growth.
Note on future reporting: from now on, Debenhams will provide current trading
information four times a year: January IMS, half year trading update, July IMS
and full year trading update. Current trading information will no longer be
provided with the announcement of the half year or full year results.
Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences and
prospects are "forward-looking statements" within the meaning of the United
States federal securities laws. These forward-looking statements reflect
Debenhams' current expectations concerning future events and actual results may
differ materially from current expectations or historical results.
Notes to Editors
Debenhams is a leading department stores group with a strong presence in key
product categories including womenswear, menswear, childrenswear, home and
health and beauty. Debenhams is the second largest department store chain in
the UK.
Debenhams operates 164 stores in the UK, Republic of Ireland and Denmark,
comprising 151 full departments stores and 13 Desire by Debenhams stores, which
is a small store concept featuring an edited product range. Debenhams also has
56 international franchise stores in 20 countries. Debenhams' online store is
available at www.debenhams.com.
Designers at Debenhams include Ted Baker, Jasper Conran, Erickson Beamon,
FrostFrench, Henry Holland, Betty Jackson, Ben de Lisi, Julien Macdonald,
Melissa Odabash, Jane Packer, Pearce Fionda, Janet Reger, John Rocha and Matthew
Williamson.
Independent review report to Debenhams plc
Introduction
We have been engaged by the Company to review the interim condensed consolidated
financial information in the half-yearly financial report for the 26 weeks ended
27 February 2010, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet,
consolidated statement of changes in equity, consolidated cash flow statement
and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The interim
condensed consolidated financial informationincluded in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the interim
condensed consolidated financial informationin the half-yearly financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the Company for the purpose of the Disclosure and Transparency
Rules of the Financial Services Authority and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the interim condensed consolidated financial information in the half-yearly
financial report for the 26 weeks ended 27 February 2010 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
13 April 2010
Consolidated Income Statement
For the 26 weeks ended 27 February 2010
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | |
+---------------------------------+-----+------+---------------------+-----------------------+
| | | | Unaudited | Unaudited | Audited |
| | | | | | |
| | | | 26 weeks | 26 weeks | 52 |
| | |Note | to | to | weeks |
| | | | 27 | 28 | to |
| | | | February | February | 29 |
| | | | 2010 | 2009 | August |
| | | | | | 2009 |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | GBPm | GBPm | GBPm |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Revenue | | 2 | 1,187.8 | 1,064.8 | 1,915.6 |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Cost of sales | | | (1,001.2) | (886.0) | (1,650.7) |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Analysed as | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Cost of sales before | | | (991.1) | (886.0) | (1,650.7) |
| exceptional items | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Exceptional cost of sales | | 4 | (10.1) | - | - |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Gross profit | | | 186.6 | 178.8 | 264.9 |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Distribution costs | | | (28.9) | (24.9) | (45.3) |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Administrative expenses | | | (23.7) | (19.2) | (37.4) |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Analysed as | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Administrative expenses before | | | (21.2) | (19.2) | (37.4) |
| exceptional items | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Exceptional administrative | | 4 | (2.5) | - | - |
| expenses | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Other exceptional income | | 4,5 | 6.6 | - | - |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Operating profit | | | 140.6 | 134.7 | 182.2 |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Analysed as | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Operating profit before | | | 146.6 | 134.7 | 182.2 |
| exceptional items | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Exceptional items | | 4,5 | (6.0) | - | - |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Interest receivable and similar | | 6 | 4.4 | 0.6 | 1.3 |
| income | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Interest payable and similar | | 7 | (30.5) | (33.1) | (62.7) |
| charges | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Profit before taxation | | | 114.5 | 102.2 | 120.8 |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Taxation | | 8 | (34.4) | (21.0) | (25.7) |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Analysed as | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Taxation before exceptional | | 8 | (36.3) | (21.0) | (25.7) |
| items | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| Taxation credit on exceptional | | | 1.9 | - | - |
| items | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
| | | | | |
+---------------------------------------+------+---------------------+-----------+-----------+
| Profit for the financial period | | 80.1 | 81.2 | 95.1 |
| attributable to equity shareholders | | | | |
+---------------------------------------+------+---------------------+-----------+-----------+
| | | | | | |
+---------------------------------+-----+------+---------------------+-----------+-----------+
Earnings per share attributable to the equity shareholders
+------------------------------------+-----+----+----+----+--+----+-----+--+----+---------+
| | | | | | | |
+------------------------------------+-----+--------------+--+----------+--+--------------+
| | | | Pence per | Pence per | Pence |
| | | | share | share | per |
| | | | | | share |
+------------------------------------+----------+----+------------+-------------+---------+
| | | | | | |
+------------------------------------+----------+----+------------+-------------+---------+
| Basic | |10 | 6.2 | 9.3 | 10.0 |
+------------------------------------+----------+----+------------+-------------+---------+
| | | | | | |
+------------------------------------+----------+----+------------+-------------+---------+
| Diluted | |10 | 6.2 | 9.3 | 10.0 |
+------------------------------------+----------+----+------------+-------------+---------+
| | | | | | |
+------------------------------------+----------+----+------------+-------------+---------+
| | | | | | | | | | | |
+------------------------------------+-----+----+----+----+--+----+-----+--+----+---------+
The notes on pages 16 to 23 form an integral part of this condensed consolidated
interim financial information.
Consolidated Statement of Comprehensive Income
For the 26 weeks ended 27 February 2010
+----------------------------------+--------+--+---+------------------+-----------+------------------+
| |Note | Unaudited | Unaudited | Audited |
| | | | | |
| | | 26 weeks | 26 weeks | 52 |
| | | to | to | weeks |
| | | 27 | 28 | to |
| | | February | February | 29 |
| | | 2010 | 2009 | August |
| | | | | 2009 |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | GBPm | GBPm | GBPm |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Profit for the financial period | | 80.1 | 81.2 | 95.1 |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Other comprehensive income | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Actuarial gain/(loss) on pension schemes | 12 | 13.1 | (41.3) | (93.6) |
+-------------------------------------------+------+------------------+-----------+------------------+
| Deferred tax movement on pension schemes | | (3.7) | 11.6 | 26.2 |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Change in the value of available for sale | | (0.3) | (2.9) | (2.2) |
| investments | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Currency translation differences | | (3.4) | (1.0) | (0.3) |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| Cash flow hedges | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| - net fair value gains/(losses) | | 21.3 | 3.1 | (12.8) |
+-------------------------------------------+------+------------------+-----------+------------------+
| - tax on net fair value (gains)/losses | | (6.0) | (0.9) | 3.6 |
+-------------------------------------------+------+------------------+-----------+------------------+
| - reclassified and reported in net profit | 3.8 | 0.8 | - |
+--------------------------------------------------+------------------+-----------+------------------+
| - tax on items reclassified and reported | | (1.1) | (0.2) | - |
| in net profit | | | | |
+-------------------------------------------+------+------------------+-----------+------------------+
| - recycled and adjusted against the cost of | (0.5) | (15.7) | (27.9) |
| inventory | | | |
+--------------------------------------------------+------------------+-----------+------------------+
| - tax on amounts recycled against the cost of | 0.1 | 4.5 | 7.8 |
| inventory | | | |
+--------------------------------------------------+------------------+-----------+------------------+
| | | | | |
+----------------------------------------------+---+------------------+-----------+------------------+
| | | | | |
+----------------------------------------------+---+------------------+-----------+------------------+
| Total other comprehensive income/(expense) | | 23.3 | (42.0) | (99.2) |
+----------------------------------------------+---+------------------+-----------+------------------+
| | | | | |
+----------------------------------------------+---+------------------+-----------+------------------+
| | | | | |
+----------------------------------------------+---+------------------+-----------+------------------+
| Total comprehensive income/(expense) for the | 103.4 | 39.2 | (4.1) |
| period | | | |
+--------------------------------------------------+------------------+-----------+------------------+
| | | | | |
+----------------------------------+--------+-------------------------+-----------+------------------+
| | | | | | | |
+----------------------------------+--------+--+---+------------------+-----------+------------------+
The notes on pages 16 to 23 form an integral part of this condensed consolidated
interim financial information.
Consolidated Balance Sheet
At 27 February 2010
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | Unaudited27 | Unaudited28February | Audited |
| | | | February | 2009 | 29 |
| |Note | | 2010 | | August |
| | | | | | 2009 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | GBPm | GBPm | GBPm |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| ASSETS | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Non-current assets | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Intangible assets | 11 | | 841.6 | 838.5 | 839.9 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Property, plant and equipment | 11 | | 668.2 | 677.4 | 669.2 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Financial assets | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Available-for-sale | | | 8.5 | 8.1 | 8.8 |
| investments | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Derivative financial | | | 3.6 | 2.9 | 0.2 |
| instruments | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Other receivables | 5 | | 17.5 | - | - |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Deferred tax assets | | | 75.4 | 56.7 | 80.6 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | 1,614.8 | 1,583.6 | 1,598.7 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Current assets | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Inventories | | | 286.9 | 249.9 | 270.9 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Trade and other receivables | | | 72.5 | 58.6 | 68.5 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Derivative financial | | | 10.3 | 40.0 | 9.5 |
| instruments | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Cash and cash equivalents | | | 92.4 | 139.3 | 188.2 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | 462.1 | 487.8 | 537.1 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| LIABILITIES | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Current liabilities | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Financial liabilities | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Bank overdraft and | | | (2.3) | (173.5) | (92.6) |
| borrowings | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Derivative financial | | | (5.6) | (0.9) | (24.2) |
| instruments | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Trade and other payables | | | (483.8) | (415.5) | (458.6) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Current tax liabilities | | | (50.3) | (41.7) | (34.0) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Provisions for liabilities and | | | (5.9) | (0.6) | (2.1) |
| charges | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | (547.9) | (632.2) | (611.5) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Net current liabilities | | | (85.8) | (144.4) | (74.4) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Non-current liabilities | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Financial liabilities | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Bank overdraft and | | | (601.6) | (893.0) | (685.9) |
| borrowings | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| - Derivative financial | | | (4.4) | (28.3) | (8.0) |
| instruments | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Deferred tax liabilities | | | (79.0) | (77.9) | (78.3) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Other non-current liabilities | | | (280.7) | (268.5) | (273.0) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Provisions for liabilities and | | | (0.5) | (0.2) | (0.2) |
| charges | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Retirement benefit obligations | 12 | | (35.9) | (8.7) | (53.6) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | (1,002.1) | (1,276.6) | (1,099.0) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| NET ASSETS | | | 526.9 | 162.6 | 425.3 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| SHAREHOLDERS' EQUITY | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Share capital | 13 | | 0.1 | 0.1 | 0.1 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Share premium | | | 682.9 | 682.9 | 682.9 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Merger reserve | | | 1,504.7 | 1,200.9 | 1,504.7 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Reverse acquisition reserve | | | (1,199.9) | (1,199.9) | (1,199.9) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Hedging reserve | | | (0.9) | 2.4 | (18.5) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Other reserves | | | (1.1) | 1.1 | 2.6 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| Retained earnings | | | (458.9) | (524.9) | (546.6) |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| TOTAL EQUITY | | | 526.9 | 162.6 | 425.3 |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
| | | | | | |
+--------------------------------+------+----------+-------------+---------------------+-----------+
The notes on pages 16 to 23 form an integral part of this condensed consolidated
interim financial information.
Consolidated Statement of Changes in Equity
At 27 February 2010
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | Share | Merger | Reverse | Retained | Hedging | Other | Total |
| | capital | reserve | acquisition | earnings | reserve | reserve | |
| | and | | reserve | | | | |
| | Share | | | | | | |
| | premium | | | | | | |
| | | | | | | | |
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Balance at 31 August 2008 | 683.0 | 1,200.9 | (1,199.9) | (574.6) | 10.8 | 5.1 | 125.3 |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Profit for the financial | - | - | - | 81.2 | - | - | 81.2 |
| period | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Actuarial loss on pension | - | - | - | (41.3) | - | - | (41.3) |
| schemes | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Deferred tax movement on | - | - | - | 11.6 | - | - | 11.6 |
| pension schemes | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Change in the value of | - | - | - | - | - | (3.0) | (3.0) |
| available for sale | | | | | | | |
| investments | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Currency translation | - | - | - | - | - | (1.0) | (1.0) |
| differences | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Cash flow hedges | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| - net fair value gains | - | - | - | - | 2.2 | - | 2.2 |
| (net of tax) | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| - reclassified and | - | - | - | - | 0.6 | - | 0.6 |
| reported in net profit | | | | | | | |
| (net of tax) | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| - recycled and adjusted | - | - | - | - | (11.2) | - | (11.2) |
| against the cost of | | | | | | | |
| inventory (net of tax) | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Total comprehensive | - | - | - | 51.5 | (8.4) | (4.0) | 39.1 |
| income and expense for | | | | | | | |
| the financial period | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Share based payment | - | - | - | 0.6 | - | - | 0.6 |
| charge | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Dividends paid | - | - | - | (4.3) | - | - | (4.3) |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Shares issued in lieu of | - | - | - | 1.9 | - | - | 1.9 |
| dividends | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Total transactions with | - | - | - | (1.8) | - | - | (1.8) |
| owners | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Balance at 28 February | 683.0 | 1,200.9 | (1,199.9) | (524.9) | 2.4 | 1.1 | 162.6 |
| 2009 | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Balance at 31 August 2008 | 683.0 | 1,200.9 | (1,199.9) | (574.6) | 10.8 | 5.1 | 125.3 |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Profit for the financial | - | - | - | 95.1 | - | - | 95.1 |
| period | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Actuarial loss on pension | - | - | - | (93.6) | - | - | (93.6) |
| schemes | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Deferred tax movement on | - | - | - | 26.2 | - | - | 26.2 |
| pension schemes | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Change in the value of | - | - | - | - | - | (2.2) | (2.2) |
| available for sale | | | | | | | |
| investments | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Currency translation | - | - | - | - | - | (0.3) | (0.3) |
| differences | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Cash flow hedges | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| - net fair value losses | - | - | - | - | (9.2) | - | (9.2) |
| (net of tax) | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| - recycled and adjusted | - | - | - | - | (20.1) | - | (20.1) |
| against the acquisition | | | | | | | |
| cost of inventory | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Total comprehensive | - | - | - | 27.7 | (29.3) | (2.5) | ( 4.1) |
| income and expense for | | | | | | | |
| the financial year | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Share based payment | - | - | - | 0.3 | - | - | 0.3 |
| charge | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Share issue | - | 303.8 | - | - | - | - | 303.8 |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Discount arising on | - | - | - | 2.4 | - | - | 2.4 |
| repurchase of term loan | | | | | | | |
| facility (net of tax) | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Dividends paid | - | - | - | (4.3) | - | - | (4.3) |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Shares issued in lieu of | - | - | - | 1.9 | - | - | 1.9 |
| dividends | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Total transactions with | - | 303.8 | - | 0.3 | - | - | 304.1 |
| owners | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| | | | | | | | |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
| Balance at 29 August 2009 | 683.0 | 1,504.7 | (1,199.9) | (546.6) | (18.5) | 2.6 | 425.3 |
+---------------------------+---------+------------+-------------+----------+------------+---------+----------------+
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| | Share | Merger | Reverse | Retained | Hedging | Other | Total |
| | capital | reserve | Acquisition | earnings | reserve | reserve | |
| | and | | reserve | | | | |
| | Share | | | | | | |
| | premium | | | | | | |
| | | | | | | | |
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Balance at 29 August | 683.0 | 1,504.7 | (1,199.9) | (546.6) | (18.5) | 2.6 | 425.3 |
| 2009 | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Profit for the | - | - | - | 80.1 | - | - | 80.1 |
| financial period | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Actuarial gain on | - | - | - | 13.1 | - | - | 13.1 |
| pension schemes | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Deferred tax movement | - | - | - | (3.7) | - | - | (3.7) |
| on pension schemes | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Change in the value of | - | - | - | - | - | (0.3) | (0.3) |
| available for sale | | | | | | | |
| investments | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Currency translation | - | - | - | - | - | (3.4) | (3.4) |
| differences | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Cash flow hedges | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| - net fair value gains | - | - | - | - | 15.3 | - | 15.3 |
| (net of tax) | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| - reclassified and | - | - | - | - | 2.7 | - | 2.7 |
| reported in net profit | | | | | | | |
| (net of tax) | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| - recycled and | - | - | - | - | (0.4) | - | (0.4) |
| adjusted against the | | | | | | | |
| cost of inventory (net | | | | | | | |
| of tax) | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Total comprehensive | - | - | - | 89.5 | 17.6 | (3.7) | 103.4 |
| income and expense for | | | | | | | |
| the financial period | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Share based payment | - | - | - | 0.6 | - | - | |
| charge | | | | | | | 0.6 |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Discount arising on | - | - | - | (2.4) | - | - | (2.4) |
| repurchase of term | | | | | | | |
| loan facility (net of | | | | | | | |
| tax) | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Total transactions | - | - | - | (1.8) | - | - | (1.8) |
| with owners | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
| Balance at 27 February | 683.0 | 1,504.7 | (1,199.9) | (458.9) | (0.9) | (1.1) | 526.9 |
| 2010 | | | | | | | |
+------------------------+---------+---------+-------------+------------+--------------+----------+-------------+
The notes on pages 16 to 23 form an integral part of this condensed consolidated
interim financial information.
Consolidated Cash Flow Statement
For the 26 weeks ended 27 February 2010
+-----------------------------------+----+----------+------+-----------+-----------+---------+
| | | | Unaudited | Unaudited | Audited |
| | | | | | |
| | | | 26 weeks | 26 weeks | 52 |
| | |Note | to | to | weeks |
| | | | 27 | 28 | to |
| | | | February | February | 29 |
| | | | 2010 | 2009 | August |
| | | | | | 2009 |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | GBPm | GBPm | GBPm |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Cash flows from operating activities | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Cash generated from operations | | 14 | 203.9 | 160.4 | 241.0 |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Interest received | | | 1.6 | 0.6 | 1.1 |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Interest paid | | | (29.1) | (29.3) | (58.4) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Tax paid | | | (21.7) | (10.9) | (25.3) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Transaction costs on acquisition of | | | (0.3) | - | - |
| Magasin | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Net cash generated from operating | | | 154.4 | 120.8 | 158.4 |
| activities | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Cash flows from investing activities | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Purchase of property, plant and | | | (36.1) | (50.4) | (77.0) |
| equipment | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Purchase of intangible assets | | | (3.2) | (0.8) | (7.5) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Purchase of subsidiary - Magasin | | | (7.5) | - | - |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Net debt acquired on acquisition of | | | (2.3) | - | - |
| Magasin | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| - | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | |
+---------------------------------------------------+------+-----------+-----------+---------+
| Net cash used in investing activities | | (49.1) | (51.2) | (84.5) |
+---------------------------------------------------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Cash flows from financing activities | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Repayment of term loan facility | | | (159.7) | - | (150.0) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Repurchase of term loan facility | | | (39.1) | - | (35.5) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Proceeds from issue of new shares | | | - | - | 323.2 |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Share issue costs | | | (4.7) | - | (14.7) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Dividends paid | | | - | (2.4) | (2.4) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Finance lease payments | | | - | (0.1) | (0.1) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Capitalised debt issue costs | | | - | - | (3.3) |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Net cash (used in)/generated from | | | (203.5) | (2.5) | 117.2 |
| financing activities | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Net (decrease)/increase in cash and cash | | (98.2) | 67.1 | 191.1 |
| equivalents | | | | |
+---------------------------------------------------+------+-----------+-----------+---------+
| | | | | | |
+-----------------------------------+---------------+------+-----------+-----------+---------+
| Cash and cash equivalents at beginning of | | 188.2 | (2.9) | (2.9) |
| financial period | | | | |
+---------------------------------------------------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| Cash and cash equivalents at end of | | 15 | 90.0 | 64.2 | 188.2 |
| financial period | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | |
+----------------------------------------+----------+------+-----------+-----------+---------+
| | | | | | | |
+-----------------------------------+----+----------+------+-----------+-----------+---------+
The notes on pages 16 to 23 form an integral part of this condensed consolidated
interim financial information.
1 Basis of preparation
This Interim Report has been prepared in accordance with the Disclosure and
Transparency Rules of the UK Financial Services Authority, International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) as adopted by the European Union (EU). The
accounting policies applied are consistent with those described in the Annual
Report and Financial Statements 2009 except as described below. The Interim
Report has been prepared in accordance with IAS 34 \'Interim Financial Reporting'
and should be read in conjunction with the Annual Report and Financial
Statements 2009.
The Group's interim condensed consolidated financial information is not audited
and does not constitute statutory financial statements as defined in Section 434
of the Companies Act 2006. Comparative figures for the 52 weeks ended 29 August
2009 have been extracted from the Group's 2009 Annual Report and Financial
Statements, on which the auditors gave an unqualified opinion and did not
include a statement under Section 498 of the Companies Act 2006. The full
financial statements for those 52 weeks have been filed with the Registrar of
Companies.
The Group has adopted the following new standards and interpretations for the
first time for the 52 weeks beginning 30 August 2009:
· IAS 1 (Revised) 'Presentation of Financial Statements' requires that the
Group presents either one performance statement - 'Statement of Comprehensive
Income'; or two statements - 'Income Statement' and 'Statement of Comprehensive
Income'. The Group has elected to present two statements. IAS 1 also requires
the presentation of a 'Statement of Changes in Equity' to be presented with the
same prominence as all other statements. The interim report has been prepared
using these revised disclosures.
· IFRS 8 'Operating Segments' requires a management approach to the
reporting of segmental information. Further details regarding the adoption of
this standard and the new disclosures required are set out in note 3.
· IFRS 3 (revised) 'Business Combinations' requires that all costs
associated with business combinations are expensed directly to the income
statement. Additionally any changes to contingent consideration must now be
dealt with through the income statement subsequent to acquisition.
· IFRS 7 (Revised) 'Financial Instruments - Disclosures'. The amendment
requires additional disclosures regarding fair value measurement and liquidity
risk. Full disclosures will be made in the Group accounts for the 52 weeks ended
28 August 2010.
· IAS 27 (Revised) 'Consolidated and Separate Financial Statements'. This
standard has not had a material impact on the Group.
The following new standards and interpretations are mandatory for the first time
for the 52 weeks beginning 30 August 2009; however these are not currently
relevant to the Group:
· IFRIC 12 'Service Concession Arrangements'
· IFRIC 14/IAS 19 'The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction'.
· IFRIC 16 'Hedges of a Net Investment in a Foreign Operation'.
· IFRIC 17 'Distributions of Non-Cash Assets to Owners'.
· Amendment to IFRS 2 'Amendment to Vesting Conditions and Cancellations'.
· IAS 23 (Revised) 'Borrowing Costs'.
· Amendment to IAS 32 'Financial Instruments: Presentation'.
· Amendment to IAS 39 'Financial Instruments: Recognition and Measurement'.
The following new standards and interpretations have been issued but are not
effective for the 52 weeks beginning 30 August 2009 and have not been adopted
early.
+-----------+------------------------------------------------+-------------+
| | |
| International Accounting Standards (IFRS) | Effective |
| | date |
+------------------------------------------------------------+-------------+
| IFRS 2 | Share Based Payments - Group Settled share | 1 January |
| amendment | based payment transactions | 2010 |
+-----------+------------------------------------------------+-------------+
| IFRS 9 | Financial Instruments | 1 January |
| | | 2013 |
+-----------+------------------------------------------------+-------------+
| IAS 32 | Presentation on classification of rights issue | 1 February |
| amendment | | 2010 |
+-----------+------------------------------------------------+-------------+
| IAS 24 | Related Party Disclosures | 1 January |
| amendment | | 2011 |
+-----------+------------------------------------------------+-------------+
| | | |
+-----------+------------------------------------------------+-------------+
| IFRIC Interpretations |
+--------------------------------------------------------------------------+
| IFRIC | Agreements for the Construction of Real Estate | 1 January |
| 15 | | 2010 |
+-----------+------------------------------------------------+-------------+
| IFRIC | Transfers of Assets from Customers | 31 October |
| 18 | | 2009 |
+-----------+------------------------------------------------+-------------+
| IFRIC | Extinguishing Financial liabilities with | 1 January |
| 19 | Equity Instruments | 2010 |
+-----------+------------------------------------------------+-------------+
| IFRIC | Prepayments on a Minimum Funding Requirement | 1 January |
| 14 | | 2011 |
| amendment | | |
+-----------+------------------------------------------------+-------------+
2 Gross transaction value
Revenue from concessions is required to be shown on a net basis, being the
commission received rather than the gross value achieved by the concessionaire
on the sale. Management believes that gross transaction value, which presents
revenue on a gross basis before adjusting for concessions and staff discounts,
represents a better guide to the value of the overall activity of the Group.
+-----------------------------+-----+--------+----------+----------+---------+
| | | | 26 | 26 | 52 |
| | | | weeks | weeks | weeks |
| | | | to | to | to |
| | | | 27 | 28 | 29 |
| | | | February | February | August |
| | | | 2010 | 2009 | |
| | | | | | 2009 |
+-----------------------------+-----+--------+----------+----------+---------+
| | | | GBPm | GBPm | GBPm |
+-----------------------------+-----+--------+----------+----------+---------+
| | | | | | |
+-----------------------------+-----+--------+----------+----------+---------+
| Gross transaction value | | | 1,417.2 | 1,307.2 | 2,339.7 |
+-----------------------------+-----+--------+----------+----------+---------+
| | | | | | |
+-----------------------------+-----+--------+----------+----------+---------+
3 Segmental information
IFRS 8 requires disclosure of the operating segments which are reported to the
Chief Operating Decision Maker ("CODM"). The CODM has been identified as the
executive management board, which includes the executive directors and other key
management. It is the executive board who have responsibility for planning and
controlling the activities of the Group.
The Group's reportable segment has been identified as Retail. The operating
segment Magasin is not a reportable segment as it does not exceed 10 per cent of
Group revenues, profits or gross assets; however it has been presented
separately within the segmental analysis below. The segments are reported to the
CODM to operating profit level, using the same accounting policies as applied to
the Group accounts.
+------------------------------------+------------------------------------+---------+---------+---------+
| Segmental analysis of results | | Retail | Magasin | Total |
| | | GBPm | GBPm | GBPm |
+ +------------------------------------+ + + +
| | | | | |
+------------------------------------+------------------------------------+ + + +
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| 26 weeks ended 27 February 2010 | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Gross transaction value | | 1,329.0 | 88.2 | 1,417.2 |
+------------------------------------+------------------------------------+---------+---------+---------+
| Concessions and staff discounts | | (190.5) | (38.9) | (229.4) |
+------------------------------------+------------------------------------+---------+---------+---------+
| External revenue | | 1,138.5 | 49.3 | 1,187.8 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Operating profit before | | 143.5 | 3.1 | 146.6 |
| exceptional items | | | | |
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Exceptional items | | (4.2) | (1.8) | (6.0) |
+------------------------------------+------------------------------------+---------+---------+---------+
| Operating profit after exceptional | | 139.3 | 1.3 | 140.6 |
| items | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest receivable and similar | | 4.4 | - | 4.4 |
| income | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest payable and similar costs | | (30.1) | (0.4) | (30.5) |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Profit before tax | | 113.6 | 0.9 | 114.5 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| 26 weeks ended 28 February 2009 | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Gross transaction value | | 1,307.2 | - | 1,307.2 |
+------------------------------------+------------------------------------+---------+---------+---------+
| Concessions and staff discounts | | (242.4) | - | (242.4) |
+------------------------------------+------------------------------------+---------+---------+---------+
| External revenue | | 1,064.8 | - | 1,064.8 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Operating profit | | 134.7 | - | 134.7 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | - | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest receivable and similar | | 0.6 | - | 0.6 |
| income | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest payable and similar costs | | (33.1) | - | (33.1) |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | - | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Profit before tax | | 102.2 | - | 102.2 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Year ended 29 August 2009 | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Gross transaction value | | 2,339.7 | - | 2,339.7 |
+------------------------------------+------------------------------------+---------+---------+---------+
| Concessions and staff discounts | | (424.1) | - | (424.1) |
+------------------------------------+------------------------------------+---------+---------+---------+
| External revenue | | 1,915.6 | - | 1,915.6 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Operating profit | | 182.2 | - | 182.2 |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest receivable and similar | | 1.3 | - | 1.3 |
| income | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Interest payable and similar costs | | (62.7) | - | (62.7) |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| Profit before tax | | 120.8 | - | 120.8 |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+---------+---------+---------+
4 Exceptional items
Exceptional items comprise the following (the reportable segment of each item is
shown in brackets):
+------------------------------------+--------+--------+----------+----------+
| | | Note | 26 |
| | | | weeks |
| | | | to 27 |
| | | | February |
| | | | 2010 |
| | | | GBPm |
+---------------------------------------------+ + + +
| | | | | |
+------------------------------------+--------+--------+----------+----------+
| | | | | |
+------------------------------------+--------+--------+----------+----------+
| Exceptional cost of sales | | | |
+---------------------------------------------+--------+----------+----------+
| Provision for restructuring (Retail) | | a | (10.1) |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Exceptional administrative expenses | | | |
+---------------------------------------------+--------+----------+----------+
| Provision for restructuring (Magasin) | b | (1.8) |
+------------------------------------------------------+----------+----------+
| Costs on acquisition of Magasin | | | c | (0.7) |
| (Retail) | | | | |
+------------------------------------+--------+--------+----------+----------+
| | | (2.5) |
+------------------------------------------------------+----------+----------+
| Other exceptional income | | | |
+---------------------------------------------+--------+----------+----------+
| Bargain purchase credit - Magasin | | | d | 6.6 |
| (Retail) | | | | |
+------------------------------------+--------+--------+----------+----------+
| | | | | |
+------------------------------------+--------+--------+----------+----------+
| Net exceptional items | | | | (6.0) |
+------------------------------------+--------+--------+----------+----------+
| | | | | |
+------------------------------------+--------+--------+----------+----------+
There were no exceptional costs in the 26 weeks to 28 February 2009 or in the 52
weeks to 29 August 2009.
a The provision for redundancy recognised in cost of sales represents the amount
expected to be incurred within the Republic of Ireland.
b The provision for restructuring recognised in administrative expenses is the
Group's best estimate of the amount expected to be incurred for restructuring
costs in Magasin. Further details of this amount are set out in note 5.
c The total of the directly attributable transaction costs on the acquisition of
Magasin included in the accounts within exceptional administrative expenses is
GBP0.7m.
d Further details of the bargain purchase credit on acquisition of Magasin are
set out in note 5.
5 Acquisition of Magasin du Nord ('Magasin')
On 7 November 2009 the Group entered into an agreement to purchase 100 per cent
of the shares of A/S Th. Wessell & Vett, Magasin du Nord ('Magasin'), a company
registered in Denmark owning six department stores. Consideration of DKK 63.6m
(GBP7.5m) was paid in January 2010 in cash.
A further amount of up to DKK 15m (GBP1.8m) of contingent consideration has been
deferred until September 2010 at the latest. A provision for Magasin
restructuring costs has been recognised for GBP1.8m, which has been charged to
exceptional administrative expenses during the period. No amount has been
recognised in the purchase price of Magasin relating to this contingent
consideration, as the Group considers, in accordance with the agreement between
the parties, that it is entitled to use the full amount towards restructuring
costs of Magasin.
An initial estimate of the fair value of the assets acquired is set out below:
+------------------------------------+--------+--------+-------+----------------+
| | | | Fair |
| | | | value |
| | | | GBPm |
+---------------------------------------------+ + + +
| Recognised assets and liabilities of | | | |
| Magasin at 7 November 2009 | | | |
+---------------------------------------------+ + + +
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
| Property, plant and equipment | | | | 11.1 |
+------------------------------------+--------+--------+-------+----------------+
| Intangible assets | | | | 2.6 |
+------------------------------------+--------+--------+-------+----------------+
| Inventories | | | | 13.2 |
+------------------------------------+--------+--------+-------+----------------+
| Trade and other receivables | | | | 23.7 |
+------------------------------------+--------+--------+-------+----------------+
| Trade and other payables | | | | (34.2) |
+------------------------------------+--------+--------+-------+----------------+
| Bank overdrafts and borrowings | | | | (2.3) |
+------------------------------------+--------+--------+-------+----------------+
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
| Total | | | | 14.1 |
+------------------------------------+--------+--------+-------+----------------+
| | | | | |
| | | | | |
| | | | | |
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
| Fair value of consideration | | | | 7.5 |
| transferred | | | | |
+------------------------------------+--------+--------+-------+----------------+
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
| Bargain purchase credit | | | | 6.6 |
+------------------------------------+--------+--------+-------+----------------+
| | | | | |
+------------------------------------+--------+--------+-------+----------------+
The Group has recognised a bargain purchase credit within other exceptional
income in operating profit, of GBP6.6m, relating to the acquisition of Magasin,
as the fair value of the net assets was in excess of the amount paid. The Group
considers that the bargain purchase credit arose due to the economic climate.
The Group is in the process of finalising the acquisition of Magasin and the
above values may be amended in the financial statements for the year ending 28
August 2010.
Total trade and other receivables include contractual lease deposits of
GBP17.5m. These amounts have been presented as non current assets within other
receivables. Trade and other receivables are all stated at fair value.
The impact on the results of Debenhams plc for the period from acquisition to 27
February 2010 is to increase revenue by GBP49.3m and increase operating profit
before exceptional items by GBP3.1m.
Magasin demerged certain business activities on 31 October 2009. Prior to this
date Magasin reported all businesses as one unit within its management accounts.
For this reason it has not been practicable to estimate the effects of the
acquisition of Magasin on the results for the full 26 week period to 27 February
2010.
6 Interest receivable and similar income
+----------------------------------------+---------+----------+----+-----+-----+--+
| | | 26 | 26 | 52 |
| | | weeks | weeks to | weeks |
| | | to 27 | 28 | to |
| | | February | February | 29 |
| | | 2010 | 2009 | August |
| | | | | |
| | | | | 2009 |
+----------------------------------------+---------+----------+----------+--------+
| | | GBPm | GBPm | GBPm |
+----------------------------------------+---------+----------+----------+--------+
| | | | | |
+----------------------------------------+---------+----------+----------+--------+
| Interest on bank deposits | | 0.6 | 0.6 | 1.3 |
+----------------------------------------+---------+----------+----------+--------+
| Discount arising on debt repurchase | | 3.8 | - | - |
+----------------------------------------+---------+----------+----------+--------+
| | | | | |
+----------------------------------------+---------+----------+----------+--------+
| Interest receivable and similar income | | 4.4 | 0.6 | 1.3 |
+----------------------------------------+---------+----------+----------+--------+
| | | | | |
+----------------------------------------+---------+----------+----------+--------+
| | | | | | |
+----------------------------------------+---------+----------+----+-----------+--+
| | | | | | | |
+----------------------------------------+---------+----------+----+-----+-----+--+
7 Interest payable and similar charges
+------------------------------------+--------+----------+----------+--------+
| | | 26 | 26 | 52 |
| | | weeks | weeks | weeks |
| | | to | to | to |
| | | 27 | 28 | 29 |
| | | February | February | August |
| | | 2010 | 2009 | |
| | | GBPm | GBPm | 2009 |
| | | | | GBPm |
+------------------------------------+--------+ + + +
| | | | | |
+------------------------------------+--------+ + + +
| | | | | |
+------------------------------------+--------+----------+----------+--------+
| | | | | |
+------------------------------------+--------+----------+----------+--------+
| Interest payable and similar | | | | |
| charges | | | | |
+------------------------------------+--------+----------+----------+--------+
| Bank loans and overdrafts | | (22.4) | (29.3) | (55.0) |
+------------------------------------+--------+----------+----------+--------+
| Charge arising from recycling of | | (3.8) | - | - |
| cash flow hedge | | | | |
+------------------------------------+--------+----------+----------+--------+
| Amortisation of issue costs on | | (3.1) | (2.0) | (4.4) |
| loans | | | | |
+------------------------------------+--------+----------+----------+--------+
| Interest payable on finance leases | | (1.2) | (1.8) | (3.3) |
+------------------------------------+--------+----------+----------+--------+
| | | | | |
+------------------------------------+--------+----------+----------+--------+
| Interest payable and similar | | (30.5) | (33.1) | (62.7) |
| charges | | | | |
+------------------------------------+--------+----------+----------+--------+
| | | | | |
| | | | | |
| | | | | |
| | | | | |
+------------------------------------+--------+----------+----------+--------+
8 Taxation
The taxation charge for the 26 weeks ended 27 February 2010 is based on an
estimated effective tax rate for the full year of 30.1% (52 weeks ended 29
August 2009: 21.3%). This is higher than the standard rate of corporation tax
(28%) due to variances between UK and overseas tax rates and items not
deductible for tax purposes. The rate for the 52 weeks ended 29 August 2009 is
low due to adjustments in respect of prior periods.
9 Dividends
The Company did not pay a final dividend in respect of the 52 weeks ended 29
August 2009. The directors are not proposing a dividend in respect of the 26
weeks ended 27 February 2010 (26 weeks to 28 February 2009: GBPnil).
10 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
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 one class of dilutive potential ordinary shares; share
options granted to employees where the exercise price is less than the market
price of the Company's ordinary shares during the period.
+---------------------+------+---------+---------+--------+---------+--------+---------+
| Basic and diluted earnings | 26 weeks | 26 weeks | 52 weeks to |
| per share | to27 | to28 | 29 August |
| | February2010 | February2009 | 2009 |
+----------------------------+-------------------+------------------+------------------+
| | | Basic | Diluted | Basic | Diluted | Basic | Diluted |
+---------------------+------+---------+---------+--------+---------+--------+---------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+---------------------+------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| Profit for the financial | 80.1 | 80.1 | 81.2 | 81.2 | 95.1 | 95.1 |
| period | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | | |
+---------------------+------+---------+---------+--------+---------+--------+---------+
| | | | | | | | |
+---------------------+------+---------+---------+--------+---------+--------+---------+
| | Number | Number | Number | Number | Number | Number |
| | m | m | m | m | m | m |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| Weighted average number of | 1,286.8 | 1,286.8 | 876.7 | 876.7 | 950.8 | 950.8 |
| shares | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| Shares held by ESOP | | (1.0) | (1.0) | (1.4) | (1.4) | (1.4) | (1.4) |
| (weighted) | | | | | | | |
| | | | | | | | |
+---------------------+------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| Adjusted weighted average | 1,285.8 | 1,285.8 | 875.3 | 875.3 | 949.4 | 949.4 |
| number of shares | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | Pence | Pence | Pence | Pence | Pence | Pence |
| | per | per | | | per | per |
| | share | share | per | per | share | share |
| | | | share | share | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| Earnings per share | 6.2 | 6.2 | 9.3 | 9.3 | 10.0 | 10.0 |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | |
+----------------------------+---------+---------+--------+---------+--------+---------+
| | | | | | | | |
+---------------------+------+---------+---------+--------+---------+--------+---------+
11 Tangible and intangible assets and commitments
+-----------------------------+-------+-------+----------+----------+---------+
| | | | Tangible |
| | | | and intangible assets |
+-----------------------------+-------+-------+-------------------------------+
| | | | 27 | 28 | 29 |
| | | | February | February | August |
| | | | | 2009 | 2009 |
| | | | 2010 | | |
+-----------------------------+-------+-------+----------+----------+---------+
| | | | GBPm | GBPm | GBPm |
+-----------------------------+-------+-------+----------+----------+---------+
| | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
| Opening net book amount | | | 1,509.1 | 1,534.1 | 1,534.1 |
+-----------------------------+-------+-------+----------+----------+---------+
| Additions | | | 47.6 | 26.3 | 67.1 |
+-----------------------------+-------+-------+----------+----------+---------+
| Foreign currency | | | 0.7 | 4.2 | 4.2 |
| revaluation | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
| Disposals | | | (0.1) | (0.1) | (0.2) |
+-----------------------------+-------+-------+----------+----------+---------+
| Depreciation and | | | (47.5) | (48.0) | (96.0) |
| amortisation | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
| Accelerated depreciation | | | - | (0.6) | (0.1) |
+-----------------------------+-------+-------+----------+----------+---------+
| | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
| | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
| Closing net book amount | | | 1,509.8 | 1,515.9 | 1,509.1 |
+-----------------------------+-------+-------+----------+----------+---------+
| | | | | | |
+-----------------------------+-------+-------+----------+----------+---------+
Capital commitments contracted but not provided for by the Group amounted to
GBP8.1 million (29 August 2009: GBP7.2 million; 28 February 2009: GBP1.8
million).
12 Defined benefit pension plans
The Group operates defined benefit type pension schemes, being the Debenhams
Executive Pension Plan and the Debenhams Retirement Scheme, the assets of which
are held in separate trustee-administered funds.
Both pension schemes were closed for future service accrual from 31 October
2006. The closure to future accrual will not affect the pensions of those who
have retired or the deferred benefits of those who have left service or opted
out before 31 October 2006. Future pension arrangements are provided through a
money purchase stakeholder plan or a defined contribution scheme for the
employees in the Republic of Ireland.
Actuarial valuations of the Group's pension schemes using the projected unit
basis were carried out at 31 March 2008 and are updated as at each relevant
period-end for the purposes of IAS 19 'Employee benefits' by Towers Watson
Limited, a qualified independent actuary. Relevant data obtained by the actuary
from this valuation has been used when calculating the IAS 19 'Employee
benefits' valuation at 27 February 2010, 29 August 2009 and 28 February 2009.
The major assumptions used by the actuary are given below. The mortality
assumptions remain consistent with those disclosed in the Group's 2009 Annual
Report and Financial Statements.
+------------------+-----------+------------+----------+----------+--------+
| | | | 27 | 28 | 29 |
| | | | February | February | August |
| | | | | 2009 | |
| | | | 2010 | | 2009 |
+------------------+-----------+------------+----------+----------+--------+
| | | | % pa | % pa | % pa |
+------------------+-----------+------------+----------+----------+--------+
| | | | | | |
+------------------+-----------+------------+----------+----------+--------+
| Discount rate | | 5.70 | 6.90 | 5.45 |
+------------------------------+------------+----------+----------+--------+
| Price inflation | | 3.50 | 3.20 | 3.30 |
+------------------------------+------------+----------+----------+--------+
| Rate of increase in salaries | | 3.50 | 3.20 | 3.30 |
+------------------------------+------------+----------+----------+--------+
| Rate of increase in pension | | 3.50 | 3.20 | 3.30 |
| payments | | | | |
+------------------------------+------------+----------+----------+--------+
| Rate of increase for | | 3.50 | 3.20 | 3.30 |
| deferred pensioners | | | | |
+------------------------------+------------+----------+----------+--------+
| | | | | |
+------------------+-----------+------------+----------+----------+--------+
The movement in the net pension (liability)/asset is as follows:
+------------------+-----------+------------+----------+----------+--------+
| | | | 27 | 28 | 29 |
| | | | February | February | August |
| | | | | 2009 | |
| | | | 2010 | | 2009 |
+------------------+-----------+------------+----------+----------+--------+
| | | | GBPm | GBPm | GBPm |
+------------------+-----------+------------+----------+----------+--------+
| | | | | | |
+------------------+-----------+------------+----------+----------+--------+
| (Deficit)/surplus at the | | (53.6) | 25.0 | 25.0 |
| start of the period | | | | |
+------------------------------+------------+----------+----------+--------+
| | | | | |
+------------------------------+------------+----------+----------+--------+
| Contributions | | 3.6 | 3.6 | 7.1 |
+------------------------------+------------+----------+----------+--------+
| Interest credit | | 1.0 | 4.0 | 7.9 |
+------------------------------+------------+----------+----------+--------+
| Net actuarial gains/(losses) on change of | 13.1 | (41.3) | (93.6) |
| assumptions | | | |
+-------------------------------------------+----------+----------+--------+
| | | | | | |
+------------------+-----------+------------+----------+----------+--------+
| | | | | |
+------------------------------+------------+----------+----------+--------+
| Deficit at the end of the | | (35.9) | (8.7) | (53.6) |
| period | | | | |
+------------------------------+------------+----------+----------+--------+
| | | | | | |
+------------------+-----------+------------+----------+----------+--------+
13 Share capital
+-----------------------------------------+--------+----------+----------+---------+---------------+
| | | |
| | | |
+-----------------------------------------+------------------------------+-------------------------+
| | | | GBP | Number |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| Ordinary shares of GBP0.0001 each | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| Authorised - At 27 February 2010, 29 August 2009 | | | 167,285 | 1,672,848,189 |
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| Authorised - At 28 February 2009 | | | 128,846 | 1,288,461,539 |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | |
+--------------------------------------------------+---------------------+-------------------------+
| | | | GBP | Number |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| Issued and fully paid - Ordinary shares of | | | | |
| GBP0.0001 each | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| At 28 February 2009 | | | 88,282 | 882,825,016 |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| Firm placing and placing | | | 33,059 | 330,592,432 |
+--------------------------------------------------+----------+----------+---------+---------------+
| Open offer | | | 7,339 | 73,388,851 |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| At 29 August 2009 and at 27 February 2010 | | | 128,680 | 1,286,806,299 |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | |
+--------------------------------------------------+----------+----------+---------+---------------+
| | | | | | |
+-----------------------------------------+--------+----------+----------+---------+---------------+
14 Cash generated from operations
+------------------------------------+---------+----------+----------+--------+
| | 26 | 26 | 52 |
| | weeks | weeks | weeks |
| | to | to | to |
| | 27 | 28 | 29 |
| | February | February | August |
| | | 2009 | |
| | 2010 | GBPm | 2009 |
| | GBPm | | GBPm |
+----------------------------------------------+----------+----------+--------+
| | | | | |
+------------------------------------+---------+----------+----------+--------+
| Profit for the financial period | | 80.1 | 81.2 | 95.1 |
+------------------------------------+ +----------+----------+--------+
| Taxation | | 34.4 | 21.0 | 25.7 |
+------------------------------------+ +----------+----------+--------+
| Depreciation and amortisation | | 47.5 | 48.0 | 96.0 |
| (note 11) | | | | |
+------------------------------------+ +----------+----------+--------+
| Accelerated depreciation (note 11) | | - | 0.6 | 0.1 |
+------------------------------------+---------+----------+----------+--------+
| Loss on disposal of property, plant and | 0.1 | 0.1 | 0.2 |
| equipment | | | |
+----------------------------------------------+----------+----------+--------+
| Bargain purchase credit on acquisition on | (6.6) | - | - |
| Magasin (note 5) | | | |
+----------------------------------------------+----------+----------+--------+
| Transaction costs of acquisition | 0.7 | - | - |
+----------------------------------------------+----------+----------+--------+
| Employee options granted during the year | 0.6 | 0.6 | 0.3 |
+----------------------------------------------+----------+----------+--------+
| Fair value losses/(gains) on derivative | 0.7 | (7.8) | (0.6) |
| instruments | | | |
+----------------------------------------------+----------+----------+--------+
| Net movements in provisions for liabilities | 2.9 | (0.2) | 1.3 |
| and charges | | | |
+----------------------------------------------+----------+----------+--------+
| Interest income (note 6) | (4.4) | (0.6) | (1.3) |
+----------------------------------------------+----------+----------+--------+
| Interest expense (note 7) | 30.5 | 33.1 | 62.7 |
+----------------------------------------------+----------+----------+--------+
| Difference between pension charge and | (4.6) | (7.6) | (15.0) |
| contributions paid | | | |
+----------------------------------------------+----------+----------+--------+
| Net movement in other non-current | 7.7 | 42.7 | 47.2 |
| liabilities | | | |
+----------------------------------------------+----------+----------+--------+
| | | | |
+----------------------------------------------+----------+----------+--------+
| Changes in working capital | | | |
+----------------------------------------------+----------+----------+--------+
| Increase in inventories | (2.7) | (12.4) | (33.4) |
+----------------------------------------------+----------+----------+--------+
| Decrease/(increase) in trade and other | 1.9 | (1.8) | (7.3) |
| receivables | | | |
+----------------------------------------------+----------+----------+--------+
| Increase/(decrease) in trade and other | 15.1 | (36.5) | (30.0) |
| payables | | | |
+----------------------------------------------+----------+----------+--------+
| | | | |
+----------------------------------------------+----------+----------+--------+
| | | | |
+----------------------------------------------+----------+----------+--------+
| Cash generated from operations | 203.9 | 160.4 | 241.0 |
+----------------------------------------------+----------+----------+--------+
| | | | |
+------------------------------------+---------+----------+----------+--------+
15 Analysis of changes in net debt
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | At | Cash | Non | At |
| | | 29 | flow | cash | 27 |
| | | August | | movements | February |
| | | 2009 | | | 2010 |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | GBPm | GBPm | GBPm | GBPm |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Analysis of net debt | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Cash and cash equivalents | | 188.2 | (95.8) | - | 92.4 |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Bank overdrafts | | - | (2.4) | - | (2.4) |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Cash, cash equivalents and bank | | 188.2 | (98.2) | - | 90.0 |
| overdrafts | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Debt due within one year | | (88.9) | 114.4 | (21.2) | 4.3 |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Debt due after one year | | (642.8) | 84.4 | (2.4) | (560.8) |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Finance lease obligations due | | (3.7) | - | (0.5) | (4.2) |
| within one year | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| Finance lease obligations due | | (43.1) | - | 2.3 | (40.8) |
| after one year | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | (590.3) | 100.6 | (21.8) | (511.5) |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
| | | | | | |
+----------------------------------+----------+---------+-----------------+-----------+----------+
The debt due after more than one year matures in May 2011.
16 Related parties
There have been no significant related party transactions during the period.
17 Financial information
Copies of the statutory accounts are available from the Company's registrars,
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
(Tel: 0871 384 2766), and at the Company's registered office, 1 Welbeck Street,
London, W1G 0AA.
Statement of Directors' Responsibilities
The directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union and that the
interim management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The directors of Debenhams plc are listed on page 7 of this interim report.
By order of the board
Paul Eardley
Company Secretary
13 April 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ITMRTMBIBBRM
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