RNS Number:9543A
Woolworths Group PLC
10 September 2002
Woolworths Group Plc - 2002/3 Interim Results
Highlights
Financial Performance
* Reduced loss before tax and after exceptional items by #16.6m to #46.2m
(2001: #62.8m)
* Losses before exceptionals and tax #41.2m, down from #46.1m for the same
period last year
* Group sales up by 7% to #1053.7m (2001: #983.8m)
* Group like-for-like sales decline of 0.3%. Improved trend in Q2 with
like-for-like sales up 0.6% following a decline in Q1 of 1.1%
* Improvement has continued in first five weeks of second half with Group
like-for-like sales up 1.4%
* Tight control of cash; stock down #32.7m on last year and capital
expenditure at #20.5m, less than half last year's level
* 8% increase in interim dividend to 0.325p (H1, 2001: 0.3p)
Good Progress on Operational Initiatives
* Shrinkage in counted stores down by 0.2% of sales
* Continued investment in systems - 40% of retail space with new EPOS by year
end
* Measures taken to integrate functions and deliver #5m annualised cost
savings
* Plans for Christmas well advanced with significant improvements on last
year:
- 6000 additional staff in stores
- over 800 extra tills to deal with peak demand
- increased distribution capacity and delivery frequency
- stronger product ranges and merchandising
Strategic Review
* Woolworths operational review complete and plans in place to drive the
recovery by; simplifying the business; strengthening the infrastructure;
rebuilding core retail competencies; and, developing a clearer
customer proposition
* Clear strategy for the Woolworths Mainchain has been developed and is being
trialled
Commenting on the results and the recovery programme, Trevor Bish-Jones,
Chief Executive said:
"We have made good progress in the first half in addressing some immediate
operational issues in the business. We have reduced the first half loss and
are in good shape to deliver an improved performance in the full
year. We are well prepared for the critical Christmas period, with stronger
product ranges, better distribution and recruitment underway for 6,000
additional colleagues in store."
"We have a clear plan in place to simplify the business; strengthen the
infrastructure and rebuild core retail competencies to deliver an improved
operational performance at Woolworths. We now have a better understanding of
our customers, and a clear strategy to focus on Kids and Celebrations, whilst
continuing to provide a convenient range of household essentials."
For further information contact:
Christopher Rogers, Finance Director 0207 479 5179
Nicole Lander, Corporate Affairs 0207 706 5653
Tulchan Communications 0207 353 4200
Chairman's Statement
This Interim Report presents the results of Woolworths Group plc for the
half-year to 3 August 2002 and comes just under one year following the demerger
of the Group from Kingfisher, which was completed on 28 August 2001.
Much of our first year has been spent stabilising the business, clearing over
#100 million of excess stock, paying off the debt inherited at the demerger,
taking action on loss making businesses and formats and strengthening the
management. We are now progressing well with Phase 2 of our programme with
profit improvement being the major priority. The results in the first half show
an improvement on the same period last year, with a reduction in the loss before
tax and after exceptional items of #16.6 million, down from #62.8 million to
#46.2 million.
The Group loss before tax and exceptional items after charging goodwill
amortisation was #41.2 million, down #4.9 million on last year. This improved
result was despite a Group administration charge now that Woolworths is an
independent company and was due to a better performance from the Entertainment
businesses; an improvement in Woolworths driven mainly by the absence of losses
from e Woolworths plus a lower interest charge as a result of strong financial
management.
Group sales increased by 7 per cent in the period to #1,053.7 million.
Like-for-like sales declined by 0.3 per cent - a decline of 1.1 per cent in the
first quarter, and an increase of 0.6 per cent in the second quarter. The
recent positive trend in like-for-like sales has continued since the half year
with an increase of like-for-like sales in the first five weeks of the second
half of 1.4%. Gross margins across the Group were similar to last year.
An exceptional charge of #5 million has been taken in the period, reflecting the
decision to terminate the General Store format and the associated restructuring
that took place at the Woolworths head office.
The Group's new Chief Executive, Trevor Bish-Jones, joined us on 18 March this
year. Good progress has been made on delivering operating improvements,
simplifying the business, raising standards, and improving the supply chain.
Most importantly, Trevor has reviewed the Woolworths Mainchain retail
proposition, Woolworths General Stores and Woolworths big W, our out-of-town
format. The results are outlined in his Chief Executive's Review. Changes to
our Mainchain format are being trialled in 30 stores from November. We are
confident that operational improvements and a refocused proposition will deliver
improved performance. We will update shareholders on the results of these
trials at the time of the full year results next March.
We are a highly seasonal business and the Christmas trading period is crucial.
Our Christmas plans are well advanced compared to last year. Improvements to
the supply chain, better product availability, a revamped marketing programme,
improvements instore and a more competitive, superior product offer should form
the basis of a better trading performance this Christmas. An additional 6,000
store colleagues are being recruited to improve service levels at this important
time compared with 4,000 last year.
Profit will benefit from continued operating and systems improvements, a
refurbishment programme in the Mainchain which draws on lessons learnt from this
year's 30 store trial, improving the returns from Woolworths big W and continued
growth in our Entertainment businesses. Even after this year's anticipated
recovery, net margins will still be well under half what the business has
achieved in the past. It is our task to realise the full potential of the
brand, its customer base and our powerful position in the market place.
The financial disciplines put in place last year have continued, with stock
levels down #32.7 million on the same period last year and capital expenditure
at #20.5 million, less than half last years level of #41.8 million. At the half
year net debt stood at #162.6 million reflecting the half year loss and the
build of working capital ahead of the peak Christmas trading period. The
underlying cashflow remains robust.
Reflecting the progress made in the year to date and the Board's confidence in
the steps taken to underpin the performance for the full financial year, the
Board is declaring an interim dividend of 0.325p per share, an increase of 8 per
cent. This will be paid on 4 December 2002 to shareholders on the register at
the close of business on 20 September 2002.
Finally, I would like to thank, on behalf of the Board, all colleagues
throughout the Woolworths Group for their hard work and commitment so far this
year. It is only with their continuing support that our plans for success can
come to fruition, this Christmas and in the years ahead.
Gerald Corbett
Chairman
Chief Executive's Review
Group sales in the period increased by 7 per cent to #1,053.7 million, with
Group like-for-like sales down 0.3 per cent. In the second quarter, Group
like-for-like sales growth was 0.6 per cent, following a first quarter decline
of 1.1 per cent. The Woolworths Mainchain like-for-like sales were up 0.3 per
cent in the second quarter, following a decline of 1.8 per cent in the first
quarter, giving overall like-for-like sales for the first half down 0.8 per
cent.
Woolworths big W achieved like-for-like sales growth of 2.4 per cent in the
period, an increase of 5.6 per cent in the first quarter but a decline of 0.5
per cent in the second quarter. This disappointing second quarter was largely
due to poor sales of Woolworths Big W specific ranges, highlighting the need to
resolve certain supply issues. We have appointed a new management team and
plans are in place to improve the performance of this business.
Operationally, within the Mainchain and Woolworths big W, measures already taken
are beginning to produce results. Instore availability has improved, shrinkage
has reduced, progress on installing the new stock and forecasting systems has
been good and costs have remained under control, with a further reduction in
head office overheads being effected during the period.
Sales from the Group's Entertainment businesses grew by 26 per cent to #215.9
million. This was driven mainly by Entertainment UK, the Group's wholesale
distribution business, which benefited from some strong product releases and an
increase in third party sales which rose by #46.3 million to #121.0 million.
Our specialist entertainment retailer, MVC, achieved like-for-like sales growth
of 4.6 per cent. VCI, the Group's audio and video business, continues to
perform well with the company now firmly focussed on production and publishing,
having disposed of the Disc distribution business and having acquired a
controlling stake in Banana Split Productions. Streets Online, our internet
entertainment business, disappointed with sales down #2.5 million to #4.6
million and action is being taken to reduce overheads.
With the Entertainment businesses trading well overall, our priority in the
first half has been the Woolworths Mainchain and its related retail formats.
Initiated in April this year, a detailed review of the Woolworths retail formats
has been completed. The potential is significant: over #2.1 billion of annual
turnover, more than 6.0 million customers a week, a powerful market position in
the high street and a great brand. Building on these inherent strengths, and
the work done in the last year to re-instate basic disciplines and controls, the
review concluded that profit growth will be driven by:
- Simplifying the business
- Strengthening the infrastructure
- Rebuilding core retail competencies
- Developing a clearer proposition
In addition, the robust plans prepared for Christmas will need to be well
executed.
SIMPLIFYING THE BUSINESS
Historically, the different Woolworths formats have had differing commercial
policies and independent management structures, which brought considerable
complexity and cost to the business. We have taken the following action:
Woolworths General Stores
The rollout of the Woolworths General Store format was halted last year. The
separate management structure that supported these stores has now been removed
and the stores are being converted back and re-absorbed into the Woolworths
Mainchain.
Woolworths big W
Whilst the Woolworths big W proposition is well received by customers and sales
per store are encouraging, financial returns need to be improved. Woolworths
big W is being held back by weak brand marketing and promotion and certain
unsatisfactory supply arrangements. A new management team has been appointed to
address these issues and a number of actions to improve the performance of the
format are progressing including:
* The integration of separate commercial management supporting Woolworths big
W, within the Mainchain commercial function. The Woolworths big W
commercial team was primarily focussed on sourcing extended ranges outside
of traditional Woolworths activity, resulting in poor range construction,
unsatisfactory availability levels, and a failure to maximise the buying
leverage of the Mainchain;
* Renegotiation of supply agreements
* Initiatives being put in place to expand the product range; and
* The format being rebranded "Woolworths big W"
Four further stores are planned both for this year and next.
Local and City Stores
The separate operational management structures supporting the Local and City
formats have been amalgamated.
The above changes have simplified the business and have resulted in over 140
roles being removed from central functions. This represents annualised savings
of approximately #5 million.
STRENGTHENING THE INFRASTRUCTURE
Technology
As we set out at demerger, we have continued with significant investment to
build modern integrated systems to deliver operational efficiencies, in
particular improved stock management, better product availability and faster
customer services instore. Good progress is being made on implementing these
integrated systems. "Makoro", our product range building system, is now in use
throughout the business. In addition, our aim is that by the 2002/3 year-end,
160 stores, representing over 40 per cent of the retail space, will benefit from
the new Kingstore till systems and nearly 100 per cent of warehouse delivered
product lines will be live on the new Integrated Planning and Replenishment
system. This implementation is producing a step change improvement in planning
and control.
Supply Chain
Successful management of the supply chain, to increase capacity and flexibility
at key trading periods, is essential for this highly seasonal business.
Experience of prior Christmas trading periods have been acted upon in building
the plan for the 2002 peak. Delivery frequencies from the Distribution Centres
are being increased, allowing quicker reaction to rates of product sales and
instore stock levels; non-seasonal stock will be supplied early to release
capacity for seasonal stock and greater use of direct-to-store delivery from
manufacturers will also free capacity.
REBUILDING CORE COMPETENCIES
Sourcing and Merchandise
Every successful retailer requires the ability to source and develop a product
offering that challenges its competitors. A number of changes have been put in
place to drive improvement:
- centralisation of buying to maximise leverage;
- a 10 per cent reduction in the number of suppliers to reduce cost;
- better range architectures in Toys, Home and Clothing;
- increased use of own brand product such as Ladybird, Chad Valley and
Colourplay;
- changes in the clothing supply chain to reduce lead times, lower stock
holdings and minimise markdown;
- establishment of the Group's own buying office based in Hong Kong
Store Standards
Instore standards are variable, leading to loss of both sales and profit as well
as high levels of stock loss. To combat this the retail operations team has been
strengthened and the programme to improve store disciplines launched last year
has been expanded. Our performance instore showed a marked improvement in the
first half. Availability has improved and in the half of the estate counted,
stock loss as a % of sales is down 0.2 per cent on last year. These early
results are encouraging, although the key Christmas period is of paramount
importance.
DEVELOPING A CLEARER PROPOSITION
Much of our future success will be governed by how well we execute the
programmes above. In addition, it is essential that Woolworths develops a
sufficiently differentiated retail offer that is clearly understood by its
customers.
Delivering a clearly understood, differentiated retail offer depends upon having
a clear understanding of our customer base. In April we undertook research to
get a clearer picture of the Woolworths core customer which produced the
following findings. Currently, 29 per cent of our customers drive just under
80% of our sales. At the heart of these core customers are mothers with
dependent children living at home. As a group these core customers have
household incomes above the UK average, they look to Woolworths to have a
compelling offer for Kids and Celebrations and at the same time to provide a
convenient range of household essentials. Our current proposition fulfils many
of these needs. Our challenge is to improve our proposition for these core
customers, offering what they want more competitively than anyone else.
Last year we trialled a revised layout in 4 of our stores, which resulted in
improved sales and margin. Building on this, and the research we have done on
our core customer, in the run up to Christmas this year a trial programme
covering a further 30 stores is being undertaken. These stores will have
enhanced ranges and space allocation for Kids and Celebrations whilst refining
the offer on Home essentials. The approach taken is evolutionary, building on
Woolworth's existing strengths and brand position. Findings from the store
trial will guide our strategy to develop a more substantial refurbishment
programme next year.
CHRISTMAS
The profitability of Woolworths this year is dependent upon the success of the
Christmas trading period. Much of the management focus in the first half has
been on developing robust plans to maximise this year's Christmas opportunity.
Distribution capacity and delivery frequency have been increased. Within the
stores there will be over 800 additional tills and mobile cash taking points,
together with 6,000 additional store colleagues, compared to 4,000 last year, to
improve service levels. Advertising and promotion activity has been
strengthened and the product offer improved, with certain new ranges coming on
stream and stronger ranges in core areas.
OUTLOOK
Since our results announcement in March, the progress has been solid. We have
simplified the business to focus on the key opportunity for the Group,
Woolworths, and at the same time reduced the cost base. The systems and supply
chain infrastructures have been strengthened. A clear strategy for the Mainchain
has been developed and is being trialled. Our Christmas plans are well advanced
and operational improvements are now coming through. The first half performance
in Woolworths and the solid performance of the Entertainment businesses means we
approach the peak trading period with cautious optimism.
Trevor Bish-Jones
Chief Executive
Group Profit and Loss Account
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
Before
exceptional Exceptional
items items Total Total Total
#m #m #m #m #m
Note
Turnover - Group and share
of joint ventures
Continuing operations 1,072.8 - 1,072.8 999.6 2,623.1
Less: share of joint
ventures turnover (19.1) - (19.1) (15.8) (23.8)
Net group turnover 2(a) 1,053.7 - 1,053.7 983.8 2,599.3
Cost of sales (752.4) - (752.4) (689.3) (1,868.3)
Before exceptional items (689.3) (1,850.3)
Exceptional items 4 - (18.0)
Gross profit 301.3 - 301.3 294.5 731.0
Selling expenses (272.1) - (272.1) (257.8) (561.9)
Administrative expenses 4 (70.2) (5.0) (75.2) (87.7) (202.1)
Before exceptional items (82.3) (160.1)
Exceptional items 4 (5.4) (42.0)
Other operating income 4.0 - 4.0 6.3 9.5
Group operating loss (37.0) (5.0) (42.0) (44.7) (23.5)
Analysed as:
Continuing operations (37.0) (5.0) (42.0) (44.7) (23.5)
Before exceptional items (39.3) 36.5
Exceptional items 4 (5.4) (60.0)
Share of operating profit
in joint ventures 0.7 - 0.7 1.6 3.1
Operating loss
including joint ventures (36.3) (5.0) (41.3) (43.1) (20.4)
Non-operating exceptional item 5 - - - (11.3) (12.1)
Loss before interest 2(b) (36.3) (5.0) (41.3) (54.4) (32.5)
Net interest payable (4.9) - (4.9) (8.4) (13.9)
Loss before taxation 3, 6 (41.2) (5.0) (46.2) (62.8) (46.4)
Taxation 7 15.4 1.3 16.7 22.7 (1.5)
Loss after taxation (25.8) (3.7) (29.5) (40.1) (47.9)
Minority interest - - - 0.5 0.7
Loss for the financial period (25.8) (3.7) (29.5) (39.6) (47.2)
Dividends payable to
shareholders 8 (4.6) - (4.6) (4.2) (16.9)
Dividends payable to
Kingfisher plc - - - (3.4) (2,229.0)
Retained loss for the period (30.4) (3.7) (34.1) (47.2) (2,293.1)
(Loss)/earnings per share 9
(pence)
Basic and diluted (2.1) (3.4)
Adjusted (1.7) 1.6
There is no difference between the reported loss above and the historical cost
equivalent.
Statement of Total Recognised Gains and Losses
Group
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Loss for the financial period (29.5) (39.6) (47.2)
Prior year adjustments - - (22.8)
Total losses recognised (29.5) (39.6) (70.0)
Group Balance Sheet
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Fixed assets
Intangible assets 64.6 86.4 68.4
Tangible assets 335.2 345.5 345.5
Investments
- own shares 2.8 - 2.3
- joint ventures - share of gross 9.4 10.1 16.1
assets
- share of gross liabilities (9.1) (8.9) (16.0)
402.9 433.1 416.3
Current assets
Stocks 361.4 394.1 311.2
Debtors 133.4 107.5 122.8
Amounts owed by Kingfisher Group companies - 2,972.3 -
Cash at bank and in hand 14.7 36.2 129.1
509.5 3,510.1 563.1
Creditors due within one year (411.9) (1,256.1) (428.5)
Net current assets 97.6 2,254.0 134.6
Total assets less current liabilities 500.5 2,687.1 550.9
Creditors due after one year (97.8) - (97.5)
Provisions for liabilities and charges (8.4) (15.2) (25.2)
Net assets 394.3 2,671.9 428.2
Capital and reserves
Called up share capital 175.9 175.9 175.9
Other reserves 24.1 24.1 24.1
Revaluation reserve 3.3 3.3 3.3
Profit and loss account 190.8 2,468.4 224.9
Equity shareholders' funds 394.1 2,671.7 428.2
Equity minority interests 0.2 0.2 -
394.3 2,671.9 428.2
Group Cash Flow Statement
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
Note #m #m #m #m #m #m
Cash flows from
operating activities
(Outflow)/inflow from
ongoing activities 10 (157.3) (23.4) 211.5
Outflow from closure
of e-Woolworths - (4.2) (4.7)
(157.3) (27.6) 206.8
Dividends received from
joint ventures 3.8 - -
Returns on investments
and servicing of finance
Interest received 1.5 0.2 2.6
Debt issue costs - - (2.5)
Interest paid (6.0) (8.7) (16.8)
(4.5) (8.5) (16.7)
Taxation paid (0.6) (7.1) (7.3)
Capital expenditure
and financial investment
Purchase of intangible fixed - - (2.2)
assets
Purchase of tangible fixed (20.5) (41.8) (72.9)
assets
Purchase of own shares (0.5) - (2.3)
Sales of tangible assets 0.5 - -
(20.5) (41.8) (77.4)
Acquisitions and disposals
Purchase of subsidiary (2.0) - -
undertaking
Cash acquired with subsidiary 0.4 - -
(1.6) - -
Equity dividends paid (12.7) - (9.8)
Cash (outflow)/inflow
before use liquid (193.4) (85.0) 95.6
resources and financing
Financing (0.1) 119.0 34.7
(Decrease)/increase in cash
in the period (193.5) 34.0 130.3
Notes to the Accounts
1. Basis of preparation
The interim results have been prepared on the basis of the accounting policies
set out in the financial statements for the 52 weeks to 2 February 2002.
2. Segmental Analysis
Turnover
Turnover arises in the UK only and represents retail sales and services
supplied. Turnover excludes Value Added Tax.
The analysis of turnover by destination is not materially different to the
analysis of turnover by origin.
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
(a) Turnover by origin
Woolworths - continuing 837.8 812.1 2,118.0
Entertainment 465.8 362.9 1,034.3
Intergroup (249.9) (192.7) (554.6)
Continuing operations 1,053.7 982.3 2,597.7
e-Woolworths - discontinued - 1.5 1.6
Net group turnover 1,053.7 983.8 2,599.3
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Total after Total after Total after
all all all
Before Operating Before Operating exceptional Before Operating exceptional
exceptional exceptional exceptionalexceptional exceptional exceptional exceptional
costs costs costs costs costs costs costs costs costs
#m #m #m #m #m #m #m #m #m
(b) (Loss) /
profit before
interest and
taxation
Woolworths -
continuing (27.3) (5.0) (32.3) (26.4) - (26.4) 25.3 (13.8) 11.5
Entertainment (3.7) - (3.7) (7.3) - (7.3) 22.7 (4.2) 18.5
Common costs (5.3) - (5.3) (0.4) (5.4) (5.8) (4.7) (42.0) (46.7)
Continuing
operating (36.3) (5.0) (41.3) (34.1) (5.4) (39.5) 43.3 (60.0) (16.7)
e-Woolworths -
discontinued
Before
exceptional
costs - - (3.6) (3.6) (3.7) (3.7)
Non-operating
exceptional - (11.3) (12.1)
costs
(Loss) / profit
before interest
and taxation (36.3) (41.3) (37.7) (54.4) 39.6 (32.5)
Common costs before exceptional costs relate to the Group's Corporate Centre,
the sale of gift vouchers through the Group's joint venture with Kingfisher,
acquisition goodwill and other consolidation adjustments.
3. (Loss)/ Profit After Interest But Before Taxation
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Total after Total after Total after
all all all
Before Before Before
exceptional Exceptional exceptional exceptional Exceptional exceptional exceptional Exceptional exceptional
costs costs costs costs costs costs costs costs costs
#m #m #m #m #m #m #m #m #m
(Loss) / profit
before interest
and taxation (36.3) (5.0) (41.3) (37.7) (16.7) (54.4) 39.6 (72.1) (32.5)
Interest (4.9) (4.9) (8.4) (8.4) (13.9) (13.9)
(Loss) / profit
after interest
but before
taxation (41.2) (5.0) (46.2) (46.1) (16.7) (62.8) 25.7 (72.1) (46.4)
4. Operating Exceptional Items
Operating exceptional costs for the 26 weeks to 3 August 2002 total #5.0 million
(related tax credit #1.3 million). These represent costs relating to the closure
of the Woolworths General Store format and the subsequent reversion of these
stores into the Woolworths Mainchain format (#3.0 million), plus the restructure
of the Woolworths Head Office (#2.0 million).
For the comparative 26 weeks to 4 August 2001, operating exceptional costs
totalled #5.4 million (related tax credit #2.1 million) and related to the
Group's demerger from Kingfisher plc. Operating exceptional costs for the 52
weeks to 2 February 2002 totalled #60.0 million (related tax credit #6.3
million) of which #18.0 million were stock-related, #15.3 million were
demerger-related and #26.7 million resulted from an impairment review of
acquisition goodwill.
5. Non-Operating Exceptional Item
The e-commerce restructuring cost of #12.1 million (related tax credit #2.4
million) in the prior year related to the closure of e-Woolworths and
principally represented the write down of fixed assets and redundancy costs.
6. Loss On Ordinary Activities Before Taxation
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Loss on ordinary activities before taxation is
stated after charging:
Operating leases:
Land and buildings 63.1 64.2 130.6
Plant and equipment 2.0 2.0 3.9
Depreciation of tangible fixed assets:
Owned Assets 28.7 28.0 58.3
Loss on the disposal of fixed assets 0.2 0.4 7.3
Amortisation of acquisition goodwill 1.5 3.7 7.3
Amortisation of other intangible assets 0.6 0.4 1.5
7. Taxation
The Group has a deferred tax asset of #19.1 million (26 weeks to 4 August 2001:
#21.8 million) being recognised on the losses incurred in the year to date. Due
to the seasonality of the business, the directors believe that this will reverse
by the year-end.
8. Dividends Payable to Shareholders
The interim dividend of 0.325 pence (2001: 0.3 pence) per share will be paid on
4 December 2002 to members registered at the close of business on 20 September
2002.
9. Earnings per Share
26 weeks to 52 weeks to
3 August 2002 2 February 2002
Weighted average number of shares (millions) 1,399.5 1,399.5
#m #m
Losses as reported (29.5) (47.9)
Adjustments for exceptional items net of tax 3.7 63.4
Adjustments for goodwill amortisation 1.5 7.3
Adjusted earnings (24.3) 22.8
Basic earnings per share (pence) (2.1) (3.4)
Adjusted earnings per share (pence) (1.7) 1.6
No earnings per share calculation has been included for the 26 weeks to 4 August
2001 as the point of demerger of the Group from Kingfisher plc was after the
interim reporting date of 4 August 2001. On the basis that losses are reported
for the two periods above, diluted earnings per share are equal to the basic
earnings per share.
10. Consolidated Cash Flow
a) Reconciliation of Operating Profit to Net Cash Flow from Operating Activities
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Group operating loss (42.0) (44.7) (23.5)
Depreciation and amortisation 30.8 32.1 93.8
(Increase)/decrease in stocks (50.2) 6.5 90.5
Movements in other working capital (96.1) (17.0) 50.7
Loss/(profit) on disposal of fixed assets 0.2 (0.3) -
Net cash (outflow)/inflow from operating (157.3) (23.4) 211.5
activities
b) Analysis of Changes in Net Debt
At At
3 February 2002 Cash flow 3 August 2002
#m #m #m
Cash at bank and in hand 129.1 (193.5) (64.4)
Short-term loan notes (0.5) 0.1 (0.4)
Issue of long-term debt (97.5) (0.3) (97.8)
Net cash/(debt) 31.1 (193.7) (162.6)
c) Reconciliation of Net Cash Flow to Movement in Net Debt
2002
#m
Decrease in cash in the period (193.5)
Movement in long-term debt (0.3)
Movement in short-term loan notes 0.1
Change in net cash/ (debt) in the year (193.7)
Net cash at 3 February 2002 31.1
Net (debt) at 3 August 2002 (162.6)
d) Financing
26 weeks to 26 weeks to 52 weeks to
3 August 2002 4 August 2001 2 February 2002
#m #m #m
Financing
Bridging loan taken out - - 100.0
Drawings from revolving credit facility - - 100.0
Repayment of debt to Kingfisher on demerger - - (200.0)
Repayment of bridging loan - - (100.0)
Repayment of revolving credit facility - - (100.0)
Movement in short-term loan notes (0.1) - (2.2)
Issue of long-term debt - - 100.0
Movement in funding balances with Kingfisher
group companies - 119.0 136.9
Net cash (outflow)/inflow from financing (0.1) 119.0 34.7
11. Nature of Financial Information
The financial information for the year ended 2 February 2002 has been extracted
from the audited consolidated accounts and does not constitute full accounts
(within the meaning of Section 240 of the Companies Act 1985). Full accounts,
which have received an unqualified audit report and did not contain any
statement under section 237 of the Companies Act 1985, have been filed with the
Registrar of Companies.
The interim report was approved by the Board of Directors on 9 September 2002.
Financial information is published on the Company's website. The maintenance and
integrity of the Group website is the responsibility of the Directors; the work
carried out by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that may
occur to the financial statements after they are initially presented on the
website.
It should be noted that legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Independent Review Report to Woolworths Group plc
Introduction
We have been instructed by the Company to review the financial information which
comprises the consolidated profit and loss account, the consolidated balance
sheet, the consolidated cash flow statements, the statement of total recognised
gains and losses and the related notes. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the Directors. The Directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquires of management and applying analytical
procedures to the financial information and underlying financial data and based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 26 weeks ended
3 August 2002.
PricewaterhouseCoopers
Chartered Accountants
London
9 September 2002
Shareholder Information
Shareholder Information on the Internet
The Company maintains an investor relations zone on its website
(www.woolworthsgroupplc.com) which allows access to share price information,
management biographies, copies of company reports and other useful investor
information.
In addition, Computershare Investor Services PLC, the Company Registrar, has
introduced a facility where shareholders are able to access details of their
shareholding in the Company over the Internet, subject to complying with an
identity check. This service can be accessed on their website (www.computershare.com).
Registrar Auditors
Computershare PricewaterhouseCoopers
Investor Services PLC 1 Embankment Place
Owen House London WC2N 6RH
PO BOX 435
8 Bankhead Crossway North Joint Brokers Joint Financial Advisers
Edinburgh EH11 4BR UBS Warburg UBS Warburg
Tel: 0870 889 3108 1 Finsbury Avenue 1 Finsbury Avenue
www.computershare.com London EC2M 2PP London EC2M 2PP
Registered and Head Office Cazenove Credit Suisse First Boston
Woolworth House 12 Tokenhouse Yard One Cabot Square
242-246 Marylebone Road London EC2R 7AN London E14 4QJ
London NW1 6JL
Tel: 020 7262 1222 Solicitors
Fax: 020 7706 5416 Freshfields Bruckhaus Deringer
www.woolworthsgroupplc.com 65 Fleet Street
London EC4Y 1HS
A copy of this Interim Report is being sent to all shareholders.
Copies are also available from the Company Secretary,
Woolworths Group plc,
Woolworth House,
242-246 Marylebone Road,
London NW1 6JL.
This Interim Report is printed on paper made using 50 per cent TCF pulps from
sustainable sources and 50 per cent recycled and de-inked fibres from pre and
post consumer waste. The paper is bio-degradable, fully recyclable and produced
in full accordance with the environmental laws in the country of manufacture.
Designed and produced
by williams and phoa.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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