20th Oct 2005 07:01
Morrison(Wm.)Supermarkets PLC20 October 2005 Wm. Morrison Supermarkets plc Interim UK Gaap results and trading update 25 weeks to 24 July 2005 Operational Summary • Store conversion process will complete by end of 2005 • Optimisation of the new business now the priority, full details of optimisation plan to be presented in March 2006 • Good progress on corporate governance Financial Summary • Total turnover £5,853.7m, up 4.7% • Operating profit, pre exceptionals £50.7m (2004: £168.9m) • Exceptional items £118.8m (2004: £21.8m) • Loss before tax £73.7m (2004: profit of £121.6m) • Net debt at 24 July 2005 £1,120.1m (2004: £1,609.7m) • Operating cash flow £326.6m, down 2% • Interim dividend maintained at 0.625p per share • Like-for-like sales up 5.4% (1.7% excluding fuel) in last 12 weeks Commenting on the results, Sir Ken Morrison, Chairman, said: "The conversion of Safeway stores to Morrisons, and disposal of those that donot fit our operating model, has continued at pace. Converted stores saw a 23%increase in customers, emphasising the strength of Morrisons service and value.Optimising our performance in the newly converted stores and throughout thebusiness will provide real opportunities for material improvement." Enquiries Morrisons 0207 638 9571Sir Ken Morrison, Bob Stott, Richard Pennycook Morrisons Press Office 01274 356804Gillian Hall Citigate Dewe Rogerson 0207 638 9571Jonathan Clare, Simon Rigby, Sarah Gestetner, Anthony Kennaway Interim statement This statement covers trading in the 25 weeks to 24 July 2005, with resultspresented under UK GAAP in accordance with the accounting policies as disclosedin our statutory accounts for the 52 weeks ended 30 January 2005. A furtherreport, converting the results to international financial reporting standards,will be issued on 17 November 2005. 25 Weeks to 24 July 2005 The Group continues to move towards its chosen business model of operating largesupermarkets under the Morrisons brand name. The process of converting Safewaystores to Morrisons, and disposing of those that do not fit the model, hascontinued at pace. The Group began the period with 498 stores, 190 of which traded as Morrisons.Two new stores were opened, at Hamilton and Auchinlea, and 88 were convertedfrom Safeway to Morrisons. A further 67 Safeway stores were divested, to leavethe Group at the end of the period with 433 stores, of which 280 traded asMorrisons. Total turnover, excluding VAT, was £5,854m, a year on year increase of 4.7%.The result included a full 25 weeks trading from Safeway, whereas the previousyear's result contained only the 20 weeks post acquisition. As a result ofdivestments 442 stores on average were traded in the period compared with anaverage estate of 602 in the prior year (both figures excluding the BP jointventure). Additionally, approximately 50 store weeks were lost as a result ofclosures whilst conversion activity took place. Inevitably, in a period of great change, the underlying trading picture has beendifficult to read. The business has been impacted by the forced divestment of52 stores required by the OFT as part of its clearance for the acquisition ofSafeway, the further divestment of 129 stores that did not fit the Morrisonsmodel and the unavoidable disruption to trading caused by the stores conversionprogramme. In addition, the market backdrop has been exceptionally competitive.Despite these factors, total like for like sales were up 5% year on year, or2.6% excluding fuel. Morrison's success over many years has been driven by highfootfall in the stores, and it is pleasing to report that stores converted toMorrisons saw a 23% increase in customer numbers post conversion. Operating profit before exceptional items was £50.7m, compared to £168.9m in theprior year. Margins were 24.4%, down by 0.4%, reflecting both the full effectof moving premium priced Safeway stores to Morrisons value and the impact ofstrong, lower margin, fuel sales. Staff costs rose by 0.5% of sales andoverheads by 1.2% as the costs of integrating the two businesses were felt. Exceptional costs were £118.8m, compared with £21.8m in the prior year. Thelargest component was the conversion costs of stores - rebranding, andrefurbishing Safeway stores and retraining staff to apply Morrisons servicestandards. Cash flow was strong, with the result that the Group operated with much reducednet debt in the period, with closing debt of £1,120m compared with £1,610m ayear previously. The reduction reflects proceeds from the store disposalprogramme, which more than offset the investment requirements associated withthe conversion of stores to Morrisons. As a result, net interest payable was£17.9m compared with £29.1m in the previous year. The Board has maintained the interim dividend at 0.625p per share, and this willbe paid on 5 December 2005 to shareholders on the register on 28 October 2005. Conversion process Progress towards conversion in the first half confirmed that our ambitious goalof presenting a single face of Morrisons to the customer by the end of calendar2005 would be attained. The store conversion process, running at four storesper week, is an exacting task for our teams - it is much more fundamental than "rebadging". Store conversion entails training all store staff in Morrisonsstandards and processes, refurbishing and catching up on deferred routinemaintenance, implementing the Morrisons electronic point of sale and back officesystems, changing all point of sale signage and promotional literature,rebranding the store fascia and switching distribution and replenishment intothe Morrisons network. The conversion teams have been performing sterling work, and it is clear fromthe uplift in customer numbers immediately after conversion that the Morrisonsformat is being well received. It is equally clear that the process ofperfecting our game in these stores is only now beginning. The Morrisonsculture, developed successfully over many years prior to the acquisition, hasnow to be rooted in the new, bigger business. As the conversion phase ends,this optimisation phase will begin, and this represents the challenge for allareas of the business in 2006/07 and 2007/08. The process of store disposals has been equally intense - with 67 storesdisposed of in the period realising £154m, bringing to 181 the number ofdisposals made since the acquisition in March 2004. In each case, in order tomaximise proceeds, a full competitive process has been undertaken.Approximately £2.1bn of annual turnover has been divested, and we remain ontrack to realise over £1.3bn from this process and to make associated savings onrents. As the business settles towards the new model, with approximately 360 largestores all branded Morrisons, the process of optimising the supply chain andsupport functions can begin. We are in consultation with the distributionworkforce about the necessary network rationalisation to support the newbusiness model, and this may lead to the closure of a number of depots. The newregional distribution facility at Kettering opens this month. Safeway'sprevious head office in Hayes, will close by the financial year end. We arealso consulting with 230 staff in the Safeway shared service centre in SouthShields, which we anticipate will be much reduced in size. Our new head officein Bradford remains on track to open in the Spring of 2006, and will bringtogether approximately 1,500 staff currently sited in three separate locations. The period since the acquisition of Safeway in March 2004 has been one ofintense operational activity, and has put colleagues across the business undersignificant pressure. They have risen to the challenge, and we are mostgrateful to them. They can be proud to have won the Grocer Gold Awards for BestCustomer Service and Product Availability at a time when there was great scopefor distraction. For the 37 week period to 16 October 2005, sales per square foot are cumulative£18.20. This breaks down as follows: for those 35 stores in the second year ofconversion, cumulative sales per square foot are £19.53 and for those 161 storesconverted for less than a year, cumulative sales per square foot are £18.11. Board At the time of the AGM statement on 26 May 2005 we confirmed the appointment ofRichard Pennycook as Group Finance Director, and he took up his post on 1October. We also undertook to appoint a further four independent non Executivedirectors to support David Jones, the Deputy Chairman, and to provide balanceand strength to the Board. The appointments of Brian Flanagan, Paul Manduca,Susan Murray and Nigel Robertson have previously been announced. Theirinduction into the business is proceeding well, and they have all begun tocontribute positively to the workings of the Board. Looking further ahead to the next three to five years, and in order for us tohave sufficient time to make an appropriate appointment, the search for a newChief Executive Officer is commencing. Bob Stott will remain in post until thesuccession issue is determined and handover can be smoothly and efficientlydealt with. Due consideration will be given to both internal and externalcandidates. During the period the Board agreed terms of reference for its operation, and forthe Audit, Remuneration and Nominations Committees. The Chairmanships andmemberships of these Committees were also agreed, and we can confirm that PaulManduca will chair the Audit Committee and Susan Murray the RemunerationCommittee. The immediate task for the Board will be to oversee and approve a medium term "optimisation plan" for the business, as the conversion process completes, inorder to provide clear goals for extracting maximum value from the Safewayacquisition. Richard Pennycook will lead this process, and the plan will beapproved by the Board ahead of the preliminary results in March 2006, whenfurther details will be provided. Trading update for 12 weeks to 16 October 2005 Since 24 July 2005 a further 48 stores have converted from Safeway to Morrisonsand 31 stores have been divested. Like for like sales for the continuing business increased by 5.4%, or 1.7%excluding fuel. Stores now converted to Morrisons (from Safeway) saw like for like sales for theperiod post conversion increase by 13.7%, or 11.0% excluding fuel. Thecommensurate increase in customer numbers was 14.2%. Continuing Safeway stores awaiting conversion saw like for like sales increaseby 4.7%, or 2.8% excluding fuel. Like for like sales in the core Morrisons estate decreased by 0.6% and excludingfuel were down 5.2%. This continues to be driven by the one-time impact ofdivesting large stores to competitors as required by the OFT, creating somecannibalisation of core stores', turnover as neighbouring Safeways convert toMorrisons. Outlook As previously reported, the Board commissioned KPMG to assist in the review ofthe Group's financial forecasting procedures. Based on the completion of thiswork the Board confirms that its previous profit guidance for 2005/06 remainsappropriate, albeit with an expectation that profit before tax, exceptionalitems and goodwill will be towards the lower end of the range. We remain confident that the optimisation process will deliver significantfinancial benefit. It is clear that perfecting our game in the newly convertedstores, being able to focus again on our core business, rationalising the supplychain and bringing head office together in one place will provide realopportunities for material improvement. 20 October 2005 Wm. MORRISON SUPERMARKETS PLC ANNOUNCEMENT RELEASED THURSDAY 20 OCTOBER 2005 CONSOLIDATED UK GAAP PROFIT AND LOSS ACCOUNT FOR THE 25 WEEKS ENDED 24 JULY 2005 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January Note 2005 2004 2005 £m £m £m Turnover including BP joint venture 2 5,920.1 5,669.4 12,296.1Less share of BP joint venture turnover (66.4) (78.9) (180.0) ------------ ------------ ------------Group turnover 5,853.7 5,590.5 12,116.1 ------------ ------------ ------------Group operating profit pre exceptional costs 3 50.7 168.9 380.3Exceptional operating costs 4 (118.8) (21.8) (99.2) ------------ ------------ ------------Group operating profit/(loss) (68.1) 147.1 281.1BP - share of joint venture operating profit 2.9 1.4 3.6 ------------ ------------ ------------Total operating profit/(loss) (65.2) 148.5 284.7Profit on divestment of assets 5 2.5 4.3 17.9Amortisation of negative goodwill 8.3 - 58.2Net interest payable 6 (17.9) (29.1) (59.2)Other finance costs 7 (1.4) (2.1) (4.5) ------------ ------------ ------------Profit/(loss) before taxation (73.7) 121.6 297.1Taxation 8 14.1 (56.5) (91.4) ------------ ------------ ------------Profit/(loss) for the financial period (59.6) 65.1 205.7Dividends (15.8) (16.2) (98.1) ------------ ------------ ------------Profit/(loss) retained (75.4) 48.9 107.6 ------------ ------------ ------------ Dividend per ordinary share 9 0.625p 0.625p 3.70p ------------ ------------ ------------Basic earnings per share 10 (2.26p) 2.68p 8.10p ------------ ------------ ------------Diluted earnings per share 10 (2.25p) 2.66p 8.07p ------------ ------------ ------------ CONSOLIDATED UK GAAP BALANCE SHEET At At At 24 July 25 July 30 January Note 2005 2004 2005 £m £m £mTangible fixed assets - at cost 8,048.4 8,246.0 7,769.5 - accumulated depreciation (1,081.7) (784.1) (945.5) ------------- ------------- ------------- - at written down value 11 6,966.7 7,461.9 6,824.0Negative goodwill 12 (294.2) (287.2) (262.9)Share of net assets in BP joint venture 13 - 65.2 67.4Current assets 14 796.5 1,005.5 740.7Current liabilities 15 (2,027.2) (2,692.1) (1,811.8) ------------- ------------- -------------Total assets less current liabilities 5,441.8 5,553.3 5,557.4Creditors - amounts falling due after more than one year 16 (986.7) (994.9) (989.9)Provisions for liabilities and charges 17 (258.4) (338.1) (286.5) ------------- ------------- -------------Net assets - excluding pension liability 4,196.7 4,220.3 4,281.0Pension liability 18 (207.0) (166.2) (263.5) ------------- ------------- -------------Net assets - including pension liability 3,989.7 4,054.1 4,017.5 ------------- ------------- -------------Called up share capitalEquity & non equity 19 266.3 266.1 266.3Share premium account 19 20.6 16.8 20.1Merger reserve 19 2,578.3 2,578.3 2,578.3Investment in own shares 19 (40.7) (40.8) (40.7)Profit and loss account 20 1,165.2 1,233.7 1,193.5 ------------- ------------- -------------Shareholders' funds 21 3,989.7 4,054.1 4,017.5 ------------- ------------- -------------NBNet current liabilities (current assets less current liabilities) (1,230.7) (1,686.6) (1,071.1) ------------ ------------- ------------ CONSOLIDATED UK GAAP CASH FLOW STATEMENT 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January Note 2005 2004 2005 £m £m £mCash inflow from operating activities 22 326.6 332.4 442.9Net cash outflow for returns on investments and servicing of finance 23 (11.3) (15.5) (75.8)Taxation paid 24 (4.3) (90.2) (171.5)Capital expenditure 25 (338.2) (212.8) (428.3)Divestment proceeds 109.8 209.9 903.0Safeway acquisition - (820.4) (831.4)Sale of subsidiary undertakings 49.1 - -Dividends paid 26 (81.2) (71.2) (87.7) ------------- ------------- -------------Cash inflow/(outflow) before use of liquid resources and financing 50.5 (667.8) (248.8)Management of liquid resources 27 (38.6) (134.3) 220.7Financing - issue of shares 28 0.5 0.4 8.9Disposal of own shares - 0.9 12.0Increase/(decrease) in debt 29 96.5 848.3 (7.3) ------------ ------------- -------------Movement in cash in the period 30 108.9 47.5 (14.5) ------------- ------------- ------------- Reconciliation of net cash flow to movement in net debt in the period Increase/(decrease) in cash 108.9 47.5 (14.5)(Decrease)/increase in debt (96.5) (848.3) 7.3Increase/(decrease) in liquid resources 38.6 134.3 (220.7) ------------- ------------- -------------Change in net cash/(debt) resulting from cash flows 51.0 (666.5) (227.9)On acquisition - (1,149.8) (1,149.8)Opening net(debt) / cash (1,171.1) 206.6 206.6 ------------- ------------- -------------Closing net debt (1,120.1) (1,609.7) (1,171.1) ------------- ------------- ------------- ANALYSIS OF NET DEBT / CASH 25 weeks ended 25 weeks ended 52 weeks ended 24 July 2005 25 July 2004 30 January 2005 £m £m £m £m £m £m Bonds (976.2) (982.0) (978.2)Lease finance (6.9) (9.3) (8.1)Loan notes (3.6) (3.6) (3.6) ------------- ------------- -------------Debt due in more than one year (986.7) (994.9) (989.9)Short term loans (250.0) (1,000.0) (150.0)Bank overdrafts & uncleared bank items (15.7) (89.9) (122.1)Lease finance (2.3) (3.2) (2.6) ------------- ------------- -------------Debt due in less than one year (268.0) (1,093.1) (274.7) ------------- ------------- -------------Gross debt (1,254.7) (2,088.0) (1,264.6)Cash in hand 22.3 10.0 20.4Overnight deposits 73.7 113.3 73.1Longer term deposits 38.6 355.0 - ------------- ------------- ------------- (1,120.1) (1,609.7) (1,171.1) ------------- ------------- -------------Gross debt as a % of shareholders' funds 31.4 51.5 31.5Net debt as a % of shareholders' funds 28.1 39.7 29.1 CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Profit/(loss) for the financial period (59.6) 65.1 205.7Actuarial gain/(loss) recognised in the pension scheme 66.2 60.0 (81.8)Current tax thereon 4.4 - 1.0Deferred tax thereon (24.2) (18.1) 23.5 ---------- ------------- ----------Total recognised gains and (losses) since last annual report (13.2) 107.0 148.4 ---------- ------------- ---------- Notes 1. Results These results for the 25 weeks ended 24 July 2005 are unaudited and presented under UK GAAP in accordance with theaccounting policies as disclosed in our statutory accounts for the 52 weeks ended 30 January 2005. Statutory accountsfor 2005 have been delivered to the registrar of companies. The auditors have reported on those accounts; their reportwas unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The interimresults will be issued under International Financial Reporting Standards (IFRS) on 17 November 2005 2. Turnover including BP joint venture The analysis of group turnover is as follows:- 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Till transaction values - Stores 5,559.5 5,390.8 11,772.6 - Fuel 1,191.1 988.6 2,102.1 ------------ ----------- ------------ 6,750.6 6,379.4 13,874.7Multisave deductions (411.6) (354.3) (845.6) ------------ ----------- ------------Supermarket takings 6,339.0 6,025.1 13,029.1VAT (488.9) (452.0) (1,003.6)Share of BP joint venture turnover 66.4 78.9 180.0Other turnover and adjustments 3.6 17.4 90.6 ------------ ----------- ------------Turnover 5,920.1 5,669.4 12,296.1 ------------ ----------- ------------ The departmental analysis of the like for like increase/(decrease) in supermarket takings is as follows:- 25 weeks to 24 July 2005 Core Converted Morrison stores Safeway Total % % % % Food (2.56) 16.08 2.69 2.85Off Licence (0.85) 8.88 4.12 3.08 ------------ ------------ ------------ ------------ (2.35) 14.95 2.91 2.88Home and leisure (7.56) 25.75 (11.54) (1.90) ------------ ------------ ------------ ------------Total excluding forecourt (2.71) 15.58 2.01 2.57Forecourt 22.47 16.29 7.60 16.77 ------------ ------------ ------------ ------------Total 1.14 15.73 3.00 5.02 ------------ ------------ ------------ ------------ 3. Group operating profit pre exceptional costs 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Turnover including BP joint venture 5,920.1 5,669.4 12,296.1Less share of BP joint venture turnover (66.4) (78.9) (180.0) ------------- ------------ ------------Group turnover 5,853.7 5,590.5 12,116.1Change in stocks 15.4 (2.3) 11.7Other operating income 3.8 1.6 5.9 ------------- ------------ ------------ 5,872.9 5,589.8 12,133.7Raw materials and consumables (4,441.7) (4,205.0) (9,179.7) ------------- ------------ ------------Gross operating profit 1,431.2 1,384.8 2,954.0Staff costs (781.2) (718.3) (1,583.2)Depreciation (144.2) (140.0) (264.9)Other operating charges (455.1) (357.6) (725.6) ------------- ------------ ------------Group operating profit pre exceptional costs 50.7 168.9 380.3 ------------- ------------ ------------ Other operating income comprisesProfit on sale of tangible fixed assets (0.2) 0.2 -Sundry income 4.0 1.4 5.9 ------------- ------------ ------------ 3.8 1.6 5.9 ------------- ------------ ------------ Staff costs comprise of Wages and National Insurance 737.7 676.9 1,490.1Profit related pay 12.0 12.1 19.7Pension costs 25.1 21.4 57.6Share option costs 5.3 0.2 4.6Other staff costs 1.1 7.7 11.2 ------------- ------------ ------------ 781.2 718.3 1,583.2 ------------- ------------ ------------ 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005Margins % % % Gross operating profit 24.4 24.8 24.4Staff costs (13.3) (12.8) (13.1)Depreciation (2.5) (2.5) (2.2)Other operating charges (7.7) (6.5) (6.0) ------------ ----------- -----------Group operating profit pre exceptional costs 0.9 3.0 3.1 ------------ ----------- ----------- 4. Exceptional costs 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Acquisition costs - 0.8 0.3Redundancy costs 9.9 17.6 23.8Divestment costs 0.5 0.5 2.7Store conversion costs 90.7 2.9 57.5Fixtures written off on 17.7 - 14.9conversion ------------ ------------ ------------ 118.8 21.8 99.2 ------------ ------------ ------------ 5. Profit on divestment of assets 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Proceeds from asset sales 109.8 172.7 903.0Written down value of assets sold (67.8) (88.0) (543.4) ---------- ---------- ----------Profit on original book value 42.0 84.7 359.6Adjusted against fair value (39.7) (80.2) (341.7) ---------- ---------- ---------- 2.3 4.5 17.9 ---------- ---------- ----------Accounted for in group operating profit -Fixtures, fittings and vehicles 0.2 (0.2) - ----------- ---------- ----------Profit on divestment assets in period 2.5 4.3 17.9 ---------- ---------- ---------- 6. Net interest payable 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Interest payable on short term loans and bank overdrafts (5.1) (16.9) (33.9)Bonds (28.1) (22.0) (52.8)Interest capitalised 6.6 2.5 6.4 ---------- ---------- ---------- (26.6) (36.4) (80.3)Interest receivable on short term deposits 8.7 7.3 21.1 ---------- ---------- ---------- (17.9) (29.1) (59.2) ---------- ---------- ---------- Interest capitalised reflects the cost of financing property developments prior to their opening date. 7. Other finance costs 25 weeks 25 weeks 52 weeks ended ended ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m Expected return on pension scheme assets 39.1 27.6 64.1Interest on pension scheme liabilities (40.5) (29.7) (68.6) ---------- ---------- ---------- (1.4) (2.1) (4.5) ---------- ---------- ---------- 8. Taxation 25 weeks ended 25 weeks ended 52 weeks ended 24 July 2005 25 July 2004 30 January 2005 Effective Effective Effective £m rate % £m rate % £m rate %Current yearCorporation tax at 30% - - 66.8 54.9 112.0 37.7Deferred tax at 30% (24.5) 33.2 (11.1) (9.1) (27.1) (9.0)Current tax on pension 4.4 (6.0) - - 1.0 0.3schemeOverseas tax 2.6 (3.5) 0.8 0.7 4.0 1.3Prior years - corporation tax - - - - 4.8 1.6 - deferred tax 3.4 (4.6) - - (3.3) (1.1) ------------ ------------ ------------ ------------ ------------ ------------ (14.1) 19.1 56.5 46.5 91.4 30.8 ------------ ------------ ------------ ------------ ------------ ------------ % % %UK standard rate of corporation tax 30.0 30.0 30.0Expenses disallowed (4.8) 2.2 5.5Non qualifying depreciation/fairvalue/ profit on disposal (19.8) 14.9 8.8Capitalised interest deducted fortax purposes 2.7 (0.6) (0.6)Other movements 15.6 - (13.4) ------------ ------------ ------------Current year 23.7 46.5 30.3Prior year adjustments (4.6) - 0.5 ------------ ------------ ------------ 19.1 46.5 30.8 ------------ ------------ ------------ 9. DividendsThe directors propose to pay an interim dividend of 0.625p per ordinary share. Dividend warrants will be paid on 5December 2005 to those members registered in the books of the company on 28 October 2005. Participants in the dividend reinvestment plan will receive their statements and, if applicable, share certificates by13 December 2005. 10. Earnings per share BasicThe earnings per share are based on the profit for the financial period.In the case of basic earnings per share this is reduced by the preference dividend.The average number of ordinary shares in issue during the period was 2,640,928,000 (2004 2,431,323,000) after adjustingfor own shares held. DilutedThe earnings per share are based on profit for the financial period.In the case of diluted earnings per share a presumption is made that share options have been exercised at their fairvalue.The average number of ordinary shares in issue (as adjusted during the period) was 2,650,256,000 (2004 2,446,558,000) 11. Tangible fixed assets at written down value At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Opening balance 6,824.0 1,738.7 1,738.7Acquired from Safeway at fair value - 5,813.6 5,806.0Additions at cost 365.3 215.3 422.9Assets acquired as a result of BP 46.4 - -dissolutionSale of subsidiaries - Jersey/Guernsey (23.9) - -Interest capitalised 6.6 2.5 6.4Proceeds from divestments of assets (109.8) (172.7) (903.0)Profit on divestments of assets 2.3 4.5 17.9Depreciation charged in the period (144.2) (140.0) (264.9) ------------ ----------- ------------ 6,966.7 7,461.9 6,824.0 ------------ ----------- ------------ 12. Negative goodwill At 24 July 2005 £m Balance brought forward 262.9Hindsight adjustments:Dissolution of BP joint venture 11.0Provision movement 2.5Other movements 26.1Amortisation (8.3) ----------- 294.2 ----------- 13. Share of net assets in BP joint venture At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Acquired at fair value - 63.8 63.8Share of BP joint venture profit - 1.4 3.6 ------------ ----------- ------------ - 65.2 67.4 ------------ ----------- ------------ 14. Current assets At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Stocks - goods for resale 440.0 410.6 424.6Debtors & prepayments 218.2 116.6 222.6Deposits - overnight 73.7 113.3 73.1 - longer term 38.6 355.0 -Cash in hand 22.3 10.0 20.4Corporation tax recoverable 3.7 - - ------------ ----------- ------------ 796.5 1,005.5 740.7 ------------ ----------- ------------ 15. Current liabilities At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Bank overdrafts 0.1 2.2 9.4Uncleared banking items 15.6 87.7 112.7Trade creditors 1,629.3 1,457.9 1,381.6Provision for debit balances 40.0 - 40.0Loans due within one year 250.0 1,000.0 150.0Interest creditor 30.3 43.4 17.1Fixed asset creditors 43.0 23.8 15.9Deposits on divestment stores - 37.2 -Lease finance 2.3 3.2 2.6Corporation tax - 20.1 0.5Dividends 16.6 16.6 82.0 ------------ ----------- ------------ 2,027.2 2,692.1 1,811.8 ------------ ----------- ------------ 16. Creditors - amounts falling due after more than one year At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Bonds 976.2 982.0 978.2Lease finance 6.9 9.3 8.1Loan notes 3.6 3.6 3.6 ------------ ----------- ------------ 986.7 994.9 989.9 ------------ ----------- ------------ 17. Provisions for liabilities and charges At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Deferred taxation 185.6 200.7 206.2Petrol filling station decommissioning reserve 20.4 23.4 21.5Onerous contract re leases 52.4 114.0 58.8 ------------ ----------- ------------ 258.4 338.1 286.5 ------------ ----------- ------------ 25 weeks ended 24 July 2005 25 weeks 52 weeks Deferred Other Total ended ended Taxation 25 July 30 January 2004 2005 £m £m £m £m £m Balance brought forward 206.2 80.3 286.5 51.5 51.5Acquired at fair value - - - 298.3 272.7Sale of subsidiaries 0.5 - 0.5 - -Utilised in the period - (6.4) (6.4) (0.8) (5.9)Charged in the period (21.1) (1.1) (22.2) (10.9) (31.8) ------------ ------------ ------------ ----------- ------------ 185.6 72.8 258.4 338.1 286.5 ------------ ------------ ------------ ----------- ------------ 18. Pension liability 25 weeks ended 24 July 2005 25 weeks 52 weeks Gross Deferred Net ended ended Taxation 25 July 30 January 2004 2005 £m £m £m £m £m Balance brought forward (376.4) 112.9 (263.5) (47.5) (47.5)Acquired at fair value - - - (160.7) (160.7)Movement in the period 80.7 (24.2) 56.5 42.0 (55.3) ------------- ------------ ------------ ----------- ------------ (295.7) 88.7 (207.0) (166.2) (263.5) ------------- ------------ ------------ ----------- ------------ 19. Share capital and other reserves At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Equity & non equity 266.3 266.1 266.3 ------------ ----------- ------------Share premium account 20.6 16.8 20.1 ------------ ----------- ------------Merger reserve 2,578.3 2,578.3 2,578.3 ------------ ----------- ------------Investment in own shares (40.7) (40.8) (40.7) ------------- ----------- ------------ Share Capital 25 weeks ended 24 July 2005 Equity Non Share Merger Equity Premium Reserve Account £m £m £m £m Opening balance 265.8 0.5 20.1 2,578.3Shares issued - - 0.4 -Preference shares converted 0.1 (0.1) 0.1 - ----------- ----------- ------------ ------------- 265.9 0.4 20.6 2,578.3 ----------- ------------ ------------ ------------- Investment in own shares 25 weeks ended 24 July 2005 Opening Closing Movement £m £m £m Investment in own shares 40.7 (40.7) 0.0 ----------- ------------ ------------- 20. Profit and loss account At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Opening balance 1,193.5 1,142.2 1,142.7Retained in the period (75.4) 48.9 107.6Share option reserve 0.7 0.7 0.5Actuarial profit/(loss) on pension scheme 66.2 60.0 (81.8)Tax arising on actuarial profit/loss (19.8) (18.1) 24.5 ------------ ----------- ------------ 1,165.2 1,233.7 1,193.5 ------------ ----------- ------------ 21. Reconciliation of movements in shareholder's funds At At At 24 July 25 July 30 January 2005 2004 2005 £m £m £m Opening shareholder's funds 4,017.5 1,317.4 1,317.4Profit/(loss) for the financial period (59.6) 65.1 205.7Dividends payable (15.8) (16.2) (98.1) ------------ ----------- ------------ 3,942.1 1,366.3 1,425.0Other recognised gains and losses 46.4 41.9 (57.3)Investment in own shares - (40.8) (40.7)Share option reserve 0.7 0.2 0.5New share capital subscribed 0.5 2,686.5 2,690.0 ------------ ----------- ------------Closing shareholder's funds 3,989.7 4,054.1 4,017.5 ------------ ----------- ------------ 22. Cash inflow from operating activities 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended ended 25 July 30 January 2004 2005 £m £m £m £m £m (Increase)/decrease in stock 424.6 (440.0) (15.4) 2.3 (11.7)Decrease/(increase) in 222.6 (218.2) 4.4 (31.0) (81.1)debtorsIncrease in creditors (1,421.6) 1,669.3 247.7 76.5 4.0Decrease in operating provisions (80.3) 72.8 (7.5) (0.4) (7.5) ------------ ------------ ------------ ----------- ------------ (854.7) 1,083.9 229.2 47.4 (96.3) ------------ ------------Group operating profit/(loss) (68.1) 147.1 281.1Depreciation 144.2 140.0 264.9Profit on divestment of assets 0.2 (0.2) -Provision movement taken to negative goodwill 2.5 - -Working capital net of tax on sale of subsidiaries ( 1.0) - -Working capital movement on dissolution of joint venture 34.9 - -Excess of contributions over pension service cost (15.9) (2.1) (7.3)Share option reserve 0.6 0.2 0.5 ------------ ----------- ------------ 326.6 332.4 442.9 ------------ ----------- ------------ 23. Returns on investments and servicing of finance 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended ended 25 July 30 January 2004 2005 £m £m £m £m £m Interest creditor (17.1) 30.3 13.2 16.1 (10.2) ------------ ------------Interest paid (33.2) (38.9) (86.7)Interest received 8.7 7.3 21.1 ------------ ----------- ------------ (11.3) (15.5) (75.8) ------------ ----------- ------------ 24. Taxation 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended ended 25 July 30 January 2004 2005 £m £m £m £m £m Corporation tax (0.5) (3.7)Deferred tax (206.2) 185.6 ------------ ------------ (206.7) 181.9 (24.8) (33.7) (81.1) ------------ ------------Charged in period 14.1 (56.5) (91.4)Current tax on pension liability 4.4 - 1.0Tax credit disposed on sale of 2.0 - -subsidiaries ------------ ----------- ------------ (4.3) (90.2) (171.5) ------------ ----------- ------------ 25. Capital expenditure 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended Ended 25 July 30 January 2004 2005 £m £m £m £m £m Creditor (15.9) 43.0 27.1 2.5 (5.4) ------------ ------------Additions (365.3) (215.3) (422.9) ------------ ----------- ------------ (338.2) (212.8) (428.3) ------------ ----------- ------------ 26. Dividends paid 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended Ended 25 July 30 January 2004 2005 £m £m £m £m £m Creditor (82.0) 16.6 (65.4) (55.0) 10.4 ------------ ------------Charged in period (15.8) (16.2) (98.1) ------------ ----------- ------------ (81.2) (71.2) (87.7) ------------ ----------- ------------ 27. Management of liquid resources 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended Ended 25 July 30 January 2004 2005 £m £m £m £m(Increase)/decrease in longer term deposits 0.0 (38.6) (38.6) (134.3) 220.7 ------------ ------------ ------------ ----------- ------------ 28. Financing - issue of shares 25 weeks 25 weeks 52 weeks Ended ended Ended 24 July 25 July 30 January 2005 2004 2005 £m £m £m New share capital subscribed 0.5 2,686.5 2,690.0Less created to acquire Safeway - (2,686.1) (2,681.1) ------------- ----------- ------------- 0.5 0.4 8.9 ------------- ----------- ------------- 29. Increase/(decrease) in debt 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended ended 25 July 30 January 2004 2005 £m £m £m £m £m Bonds (978.2) 976.2 (2.0) (150.0) (153.8)Lease finance (10.7) 9.2 (1.5) (1.6) (3.4)Loan notes (3.6) 3.6 - (0.1) (0.1)Short term loans (150.0) 250.0 100.0 1,000.0 150.0 ------------- ------------- ------------- --------------- -------------- (1,142.5) 1,239.0 96.5 848.3 (7.3) ------------- ------------- ------------- ------------- ------------- 30. Movement in cash 25 weeks ended 24 July 2005 25 weeks 52 weeks Opening Closing Movement ended ended 25 July 30 January 2004 2005 £m £m £m £m £m Bank overdrafts 9.4 (0.1) 9.3 (2.2) (9.4)Uncleared banking items 112.7 (15.6) 97.1 21.1 (3.9)Cash (20.4) 22.3 1.9 1.2 11.6Deposits - overnight (73.1) 73.7 0.6 27.4 (12.8) ------------ ------------ ------------ ----------- ------------ 28.6 80.3 108.9 47.5 (14.5) ------------ ------------ ------------ ----------- ------------ 31 Dissolution of BP Joint Venture At 24 July 2005 £m Investment brought forward 67.4Profit in the period 2.9Release of fair value provision 11.0 ------------ 81.3Cash drawings (34.9)Assets acquired as part of dissolution (46.4) ------------ - ------------ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MRW.L