11th Apr 2006 07:01
Marks & Spencer Group PLC11 April 2006 Issued: Tuesday, 11 April 2006 QUARTER 4 TRADING STATEMENT 2005/6 - 13 weeks to 1 April 2006 • UK sales +9.1%; general merchandise +9.9%; food +8.4%; • UK like for like sales +6.8%; general merchandise +8.2%; food +5.6%; • Full price sales of general merchandise +11.6%; • 2005/06 profit before tax expected to be in the range of £745 to £755m. UK sales for the 13 weeks to 1 April 2006 were +9.1% in total with generalmerchandise +9.9% and food +8.4%. Within this clothing was +8.5% and home+24.0%. Full price sales of general merchandise were +11.6% compared with +5.3%last quarter. The adjustment for the timing of Easter (March 2005 vs April 2006)would have added around 0.8% to both general merchandise and food sales. UK sales for the 52 weeks to 1 April 2006 were +3.4% in total with generalmerchandise level on the year and food +7.0%. Within this clothing was flat andhome +0.8%. Like for like sales % H1 Q3 Q4 Full Year 2005/06 2005/06 2005/06 2005/06 General merchandise -6.1 +0.8 +8.2 -1.0Food +1.6 +5.1 +5.6 +3.6Total -2.3 +2.9 +6.8 +1.3 This is a strong performance. In general merchandise we continue to focus onbetter buying, better values and better styling. Our food business has continuedits strong performance reflecting better innovation and the Simply Food openingprogramme. We are pleased with the customer response to our newly refurbished stores andplan to roll out the programme across the chain. As a consequence, we havereassessed the useful economic lives of some of our existing assets to reflecttheir earlier replacement. This will give rise to accelerated depreciation ofaround £26m in 2005/06. After taking into account accelerated depreciation, we expect profit before taxfor 2005/06 to be in the range of £745m to £755m. This expected range also takesinto account a one-off discretionary bonus to our customer assistants of £20mwhich will take expected bonus payments for the year to around £70m. Stuart Rose, Chief Executive said: "We are pleased with the progress we are making but there remains much to do.The trading environment remains difficult and we do not expect this to improvein the next financial year. Progress will become more demanding as we start tocome up against growth year on year." Guidance for financial year 2006/07: • The planned opening of new footage will add around 3% to total space, representing a c. 2% increase in general merchandise footage and c. 5% increase in food footage, on a weighted average basis. Total square footage at 1 April 2006 was around 13.1m square feet. • Group capital expenditure for 2006/07 is expected to be in the range of £520-570m. This includes £28m for the refurbishment of the Iceland stores. • Gross margin is expected to improve between 50 to 100bps. This will be driven mainly by improvements in general merchandise primary margin from better buying and improved supplier terms. • Operating costs, including costs associated with new space and the modernisation programme (including accelerated depreciation), but excluding provision for bonus payments, are expected to increase by 6% to 7%. Any bonus payment for 2006/07 will depend on the financial performance of the Group. Marks and Spencer Group plc's preliminary results for the year to 1 April 2006will be announced on 23 May 2006. Statements made in this announcement that look forward in time or that expressmanagement's beliefs, expectations or estimates regarding future occurrences andprospects are "forward-looking statements" within the meaning of the UnitedStates federal securities laws. These forward-looking statements reflect Marks &Spencer's current expectations concerning future events and actual results maydiffer materially from current expectations or historical results. Any suchforward-looking statements are subject to various risks and uncertainties,including failure by Marks & Spencer to predict accurately customer preferences;decline in the demand for products offered by Marks & Spencer; competitiveinfluences; changes in levels of store traffic or consumer spending habits;effectiveness of Marks & Spencer's brand awareness and marketing programmes;general economic conditions or a downturn in the retail or financial servicesindustries; acts of war or terrorism worldwide; work stoppages, slowdowns orstrikes; and changes in financial and equity markets. Contacts: Investor Relations:Amanda Mellor +44 (0)20 8718 3604Majda Rainer +44 (0)20 8718 1563 Corporate Press Office: +44 (0)20 8718 1919 Investors & Analysts Conference Call: This will be hosted by Stuart Rose and Ian Dyson at 08.30 (BST) on Tuesday 11April 2006: Dial in number: +44 (0) 20 7190 1232 0800 358 5260 A recording of this call will be available until Tuesday 18 April 2006: Dial in number: +44 (0) 20 8515 2499Pin number: 448603# This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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