RNS Number:7230C
Woolworths Group PLC
08 September 2004
Woolworths Group plc
Interim Results Announcement
For the 26 weeks ended 31 July 2004
Embargoed until 07.00 hrs 8 September 2004
Financial Performance
* First half loss (before tax and goodwill amortisation) reduced by 5.7% to #32.9m (H1 2003: #34.9m), which
includes #3.5m of costs associated with the 10/10 refit programme
* First half loss before tax reduced by 5.5% to #34.4m (H1 2003: #36.4m)
* Group sales up by 5.9% to #1,110.8m (H1 2003: #1,049.4m)
* Like-for-like sales at Woolworths Mainchain up 0.5% and by 0.4% at Woolworths big W
* Woolworths gross margin improved by 60 basis points
* 8.3% increase in interim dividend to 0.39p per share (H1 2003: 0.36p)
* Significant increase in capital expenditure to #39.8m (H1 2003: #23.8m) driven by investment in 10/10 stores
and the accelerated rollout of the Kingstore till system
* Net debt for the period down to #131.8m (H1 2003: #142.9m)
Operational Highlights
* 40 stores trading in the 10/10 format, representing approximately 8% of Mainchain space
* Kingstore system in 550 stores by half-year; rollout complete by mid October
* Continued product and range development driving margin growth
* Christmas planning well advanced, with set up three weeks earlier than last year
* Review of big W sites making good progress
* EUK contract renewed with Tesco and WH Smith signed as new third party customer
* VCI/BBC Worldwide Joint Venture announced
Trevor Bish-Jones, Chief Executive of Woolworths Group plc commented:
"In the first six months of this financial year, the Group has continued to make
progress, with better systems, better buying and cost control underpinning the
improvement in our margin. We are well placed to continue to deliver an
improved performance over the key Christmas trading period and have a successful
store investment programme in place which will drive growth in the business over
the medium term".
For further information contact:
Christopher Rogers, Finance Director 020 7706 5883
Nicole Lander, Corporate Affairs 020 7706 5653
Kate Inverarity, Tulchan Communications 020 7353 4200
Alexia Latham, Tulchan Communications 020 7353 4200
1. OVERVIEW OF FINANCIAL PERFORMANCE
The first half loss (before tax and goodwill amortisation) improved by 5.7 per
cent to #32.9 million (H1 2003: #34.9 million). This includes #3.5 million of
costs associated with the 10/10 refit programme.
In the 26 weeks to 31 July 2004, total Group sales increased by 5.9 per cent to
#1,110.8 million (H1 2003: #1,049.4 million). Sales reflect the introduction of
FRS 5, Application Note G, which was adopted in the last financial year. Sales
have also been impacted by the outsourcing of our in-store cafe operation from
October 2003. Stripping out these changes, underlying Group sales grew by 7.5
per cent, with underlying Retail sales increasing by 1.0 per cent and underlying
third party sales in the Entertainment Wholesale and Publishing business up 42.9
per cent.
Total Group like-for-like sales rose 0.3 per cent, with the Mainchain increasing
0.5 per cent, Woolworths big W increasing 0.4 per cent and MVC decreasing 1.8
per cent.
The Woolworths gross margin increased by 60 basis points. This was driven by
improved buying, continued product development, better management of promotions
and a more efficient supply chain.
The increased investment in the store refit programme and the accelerated
rollout of the Kingstore till system, resulted in capital expenditure for the
half-year of #39.8 million, up from #23.8 million last year.
Half-year net debt fell #11.1 million to #131.8 million (H1 2003: #142.9
million).
26 weeks to 26 weeks to % Change
31 July 2004 2 August 2003*
#m #m
Group sales 1,110.8 1,049.4 5.9
Loss before tax, and (32.9) (34.9) 5.7
goodwill amortisation
Loss before tax (34.4) (36.4) 5.5
Interim dividend pence per share 0.39 0.36 8.3
*2003 has been restated to adjust for the impact of FRS 5 Application note G,
adopted in the last financial year.
2. OPERATING REVIEW
Retail
The first half operating loss from the Retail businesses (Woolworths Mainchain,
Woolworths big W and MVC) was #32.2 million, a slight increase on the first half
loss of #31.1 million last year. Stripping out #3.5 million of costs associated
with the 10/10 refurbishment programme, the underlying operating loss improved
by #2.4 million.
Woolworths
Total Woolworths sales fell 0.6 per cent to #827.2 million (H1 2003: #831.8
million). Stripping out the impact of the adoption of FRS 5, Application note
G, and the outsourcing of the cafe operation, total Woolworths sales increased
by 1.3 per cent.
Total Woolworths like-for-like sales rose 0.5 per cent, with the Mainchain up
0.5 per cent and Woolworths big W up 0.4 per cent. Gross margins improved by 60
basis points. This was driven by improved buying, continued product
development, better management of promotions and a more efficient supply chain.
Trading during the first half was characterised by strong sales in entertainment
and electricals, with weaker performances in more seasonal product such as
garden furniture and summer clothing. Our buying teams continue to focus on the
quality and competitiveness of the offering and during the period we launched:
- Exclusive Thorntons confectionery ranges into 491 stores
- "Baby Shop" in larger stores, including Ladybird buggies and cots
- Extended kids' bedroom furniture and bedding ranges
- Year round gift ranges including Candy Babes toiletries and gift sets
- A new range of gift wrap and greeting cards
Progress continues to be made with strengthening the infrastructure and
simplifying the business, and these initiatives remain fundamental to our
strategy. The Kingstore rollout is going to plan and had been installed in 550
stores at the half-year, with completion expected by mid October 2004. These
new tills, combined with our integrated planning and replenishment systems, have
helped lift single sku (stock keeping unit) availability by a further 1.4 per
cent to 93.2 per cent in store. We continue to focus on cost control and during
the half-year we removed a further 71 roles from Woolworths' head office,
bringing the overall reduction in head office roles to over 20 per cent since
demerger.
We have made good progress rolling out the 10/10 refit programme, with 30 stores
refurbished in the first half, taking the total at the half-year to 40 which
represents 8.4 per cent of both Mainchain retail space and turnover. The refit
brings the store environment up-to-date, improves the shopping experience for
our customers and reflects our "Kids and Celebrations" strategy. To date, these
stores, in their first year of trading (or the period since reopening where less
than a year) have produced sales improvements compared to Mainchain stores of
9.0 per cent on average, coupled with a 70 basis point increase in gross margin.
Results from the first six 10/10 stores which have now traded for over a year,
have shown further increases in year two, with five of the six stores showing
continued sales uplift in the range of 2-7 per cent relative to the
non-refurbished stores. The sixth store has been severely impacted by town
centre redevelopment and has declined 9.6 per cent. Of course, this is a small
sample, with four of the six stores yet to trade in the peak Christmas period
for the second time, but nevertheless the indications are encouraging.
We plan for a further 19 stores to be refitted by the end of September which,
coupled with a new store opening in Harlow in October, will give us 60 stores
trading this Christmas in the 10/10 format. We will then have 12.4 per cent of
Mainchain space refitted, accounting for close on 13 per cent of Mainchain
sales.
Plans are being put in place for a further 75 stores to be refurbished next
year. The capital expenditure required for this investment would be #40 million
to be funded through internal cash generation. This will take the total number
of 10/10 stores to 135 by Christmas 2005, representing approximately 30 per cent
of retail space and turnover.
Woolworths Out-of-Town
In March this year, we announced that Woolworths big W, as traded from its
current property portfolio, did not in our view, represent a secure source of
long-term profitability and would not be rolled out in that format. A
site-by-site review of the estate is being undertaken to assess the merits of
either outright disposal or reducing the size of the trading units to a level
that is sustainable for Woolworths out-of-town. Good progress has been made
with this review.
We believe there is an opportunity for Woolworths to participate in the
out-of-town sector, and over the past six months we have continued to develop a
smaller out-of-town proposition for Woolworths. This will be introduced into
Tamworth and Norwich prior to Christmas 2004, and, following the conclusion of
our site review, we expect to roll the format out across further stores in the
Woolworths big W estate during 2005.
Christmas
Christmas is a key trading period both on the high street and out-of-town. Our
plans for this year are well progressed and have included advancing the planning
cycle by three weeks, reducing the length of time stores are disrupted as we set
up for Christmas, and a more efficient use of seasonal staff. To underpin
margin performance in the second half, new product has been developed for
Christmas along with both extended and refreshed seasonal ranges. Our retail
presence online will also be strengthened by adding around 3,500 additional gift
and seasonal lines to the current Entertainment ranges, closely co-ordinated
with our catalogue, phone ordering and in-store offers. In addition, Woolworths
will be launching a digital music download service in the run up to Christmas.
MVC
Performance at MVC has stabilised in recent months. For the first six months of
the year, like-for-like sales were down 1.8 per cent against a period last year
where sales were bolstered by aggressive clearance activity undertaken to sell
through redundant stocks ahead of space reallocation from music to DVD and
games.
More encouragingly, profitability in the first half has improved against the
prior year. This has been driven by tight cost control and, in the absence of
clearance stock, an improvement in the gross margin.
During the first half, trials were undertaken in four stores to evaluate the
customer appeal and profitability associated with a "Trade-in" offer which
allows customers to receive cash or credit for pre-owned entertainment product.
The traded-in products are then offered for sale within the store. Initial
results are encouraging and the trial will be extended.
Good progress is being made with the "More" discount card. We continue to sign
up new customers and are achieving very high response rates to direct mail
activity, with a total of 2.2 million customers now registered with the new
card. Ongoing systems development means that customers can view points balances
online and receive point credits for both online and in-store purchases.
Entertainment Wholesale and Publishing
Entertainment UK
Sales at EUK (both third party and intergroup) increased by 18.8 per cent during
the first half. This increase reflects the strength of the DVD market and the
strong growth seen in a number of the trade channels served by EUK.
In August, we announced EUK's new contract with Tesco. Within the terms of the
contract, both parties are committed to working together to improve supply chain
efficiencies. Agreement to undertake any identified improvements is a condition
of the new contract continuing for the duration of the initial term to March
2007.
EUK has also secured agreement to supply music and non-core video product to WH
Smith and deliveries commenced in early August. In addition, EUK is trialling
the supply of books to Tesco.
The competitive nature of the entertainment market has resulted in pricing
pressure being applied from EUK's customers and as a result gross margins fell
during the period. It is anticipated that this pressure will continue and EUK
will look to move its profitability forwards through a combination of further
top line growth, cost control and efficiency improvements at head office and in
their distribution centres. During the first half, 27 roles were removed from
EUK's head office.
VCI
Sales at VCI (third party and intergroup) grew by 8.6 per cent, as customers
switched from VHS to DVD and key titles, including "Peter Kay's Phoenix Nights
series 1 and 2" and "Touching the Void", continued to be successful.
In July this year, we announced the agreement to take VCI into a joint venture
with BBC Worldwide. The new company called "2entertain Limited" will, in
addition to VCI's existing programming sources, have a first option to acquire
product from BBC programming and the opportunity to access new markets,
particularly overseas.
Subject to regulatory and financing clearances, the joint venture is expected to
commence trading this autumn.
3. BORROWINGS, STOCK AND CAPITAL EXPENDITURE
Reflecting the cash generative characteristics of the Group, net debt at the
half-year reduced by #11.1 million to #131.8 million (H1 2003: #142.9 million).
Stock at the half-year was #402.5 million (H1 2003: #384.0 million). This
increase has been driven by an earlier Christmas set up and the continued drive
to improve in-store availability.
Capital investment in the first half was #39.8 million. This compares to #23.8
million last year and reflects the increased investment in the 10/10 refits and
the accelerated rollout of the Kingstore till system. Full year planned
investment of #80.0 million remains in line with expectations.
4. DIVIDENDS
Based on the progress made in the first half and our confidence in the longer
term prospects of the Group, the interim dividend is increased by 8.3 per cent
to 0.39 pence per share. This will be paid on 8 December 2004 to shareholders
on the register at the close of business on 17 September 2004.
5. OUTLOOK
These results demonstrate the solid progress being made across all areas of the
Group. Trading in the first five weeks of the second half has been mixed
although the underlying retail gross margin has continued to improve compared to
last year. As ever, the key trading period will be Christmas. Building on our
past experience, our plans are well advanced and with an improved product offer
and a strong promotional platform, we move into Christmas with confidence.
Group Profit and Loss Account
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated)
Note #m #m #m
Turnover - Group and share
of joint ventures
Continuing operations 1,125.7 1,063.2 2,816.3
Less: share of joint ventures' turnover (14.9) (13.8) (41.6)
Group turnover 2 1,110.8 1,049.4 2,774.7
Cost of sales (802.4) (748.3) (1,995.9)
Gross profit 308.4 301.1 778.8
Selling expenses (275.8) (275.3) (578.8)
Administrative expenses (70.7) (63.6) (138.4)
Other operating income 7.6 5.8 14.1
Group operating (loss)/profit (30.5) (32.0) 75.7
Share of operating profit
in joint ventures 0.1 0.5 1.2
(Loss)/profit before interest (30.4) (31.5) 76.9
Net interest payable (4.0) (4.9) (10.2)
(Loss)/profit on ordinary activities
before taxation 3 (34.4) (36.4) 66.7
Taxation 4 11.4 12.2 (20.6)
(Loss)/profit on ordinary activities
after taxation (23.0) (24.2) 46.1
Equity minority interest (0.1) (0.1) (0.1)
(Loss)/profit for the financial period (23.1) (24.3) 46.0
Dividends payable to shareholders 5 (5.4) (5.1) (21.2)
(Loss)/ retained profit for the financial period (28.5) (29.4) 24.8
(Loss)/earnings per share (pence) 6
Basic (1.6) (1.7) 3.3
Diluted (1.6) (1.7) 3.1
Basic - adjusted* (1.5) (1.6) 3.5
Diluted - adjusted* (1.5) (1.6) 3.3
There is no difference between the reported loss above and the historical cost
equivalent.
* Adjusted earnings per share is calculated before exceptional items and
amortisation of acquisition goodwill.
There were no exceptional items during any of the above periods.
Prior half-year results have been restated for the impact of Financial Reporting
Standard 5 'Reporting the Substance of Transactions', Application Note G -
Revenue Recognition.
Group Balance Sheet
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated) (Restated)
#m #m #m
Fixed assets
Intangible assets 56.7 61.4 58.7
Tangible assets 335.3 325.3 323.7
Investments - associates 0.2 - 0.2
- joint ventures - share of gross assets 13.8 6.8 12.0
- share of gross liabilities (13.8) (6.6) (12.0)
392.2 386.9 382.6
Current assets
Stocks 402.5 384.0 363.4
Debtors 149.1 128.6 166.3
Cash at bank and in hand 27.8 17.2 155.2
579.4 529.8 684.9
Creditors due within one year (423.6) (399.3) (483.9)
Net current assets 155.8 130.5 201.0
Total assets less current liabilities 548.0 517.4 583.6
Creditors due after one year (98.8) (98.3) (98.5)
Provisions for liabilities and charges (19.5) (17.5) (27.8)
Net assets 429.7 401.6 457.3
Capital and reserves
Called up share capital 177.1 176.1 176.6
Share premium reserve 1.8 0.4 1.2
Demerger reserve 24.1 24.1 24.1
Revaluation reserve 3.1 3.3 3.1
Profit and loss account 223.3 197.3 252.1
Equity shareholders' funds 429.4 401.2 457.1
Equity minority interests 0.3 0.4 0.2
429.7 401.6 457.3
The prior half-year balance sheet has been restated for the impact of Financial
Reporting Standard 5 'Reporting the Substance of Transactions', Application Note
G - Revenue Recognition.
The balance sheets for both the prior periods have also been restated following
the adoption of Urgent Issues Task Force, Abstract 38 (UITF 38) 'Accounting for
ESOP Trusts'.
Group Cash Flow Statement
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated) (Restated)
Note #m #m #m #m #m #m
Cash flows from
operating activities
(Outflow)/inflow from
ongoing activities 7(a) (121.4) (133.5) 113.0
Dividends received from
joint ventures 0.7 3.7 1.6
Returns on investments
and servicing of finance
Interest received 2.0 0.9 1.8
Debt issue costs - (0.9) (1.0)
Interest paid (5.5) (5.5) (11.6)
(3.5) (5.5) (10.8)
Taxation paid (11.5) (5.4) (16.8)
Capital expenditure
and financial investment
Purchase of tangible fixed assets (33.4) (23.8) (51.6)
Proceeds from sale of tangible
fixed assets - 0.1 0.5
(33.4) (23.7) (51.1)
Acquisitions and disposals
Purchase of associate undertaking - - (0.2)
Cash acquired with subsidiary
acquisition - - 0.2
- - -
Equity dividends paid (16.1) (14.1) (19.2)
Cash (outflow)/inflow before use
of liquid resources and financing (185.2) (178.5) 16.7
Management of liquid resources
(Increase)/decrease in short-term
deposits with banks (3.4) - 0.7
Financing 7(d) 16.8 49.8 1.3
(Decrease)/increase in cash
in the period (171.8) (128.7) 18.7
The prior half-year has been restated for the impact of Financial Reporting
Standard 5 'Reporting the Substance of Transactions', Application Note G -
Revenue Recognition.
Both prior periods have also been restated following the adoption of Urgent
Issues Task Force, Abstract 38 (UITF 38) 'Accounting for ESOP Trusts'.
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 31 January 2004, except
for the adoption of UITF 38 'Accounting for ESOP Trusts' as outlined in Note 8.
UITF 17 (Revised) 'Employee Share Schemes' has also been adopted, although no
changes are required to the financial statements.
2. Segmental Analysis
Turnover
Turnover arises in the UK only and represents retail sales, services supplied
and other income. 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
31 July 2004 2 August 2003 31 January 2004
(Restated)
#m #m #m
(a) Turnover by origin - continuing operations
Retail 881.3 888.8 2,284.9
Entertainment Wholesale and Publishing 462.4 388.1 1,165.2
Intergroup (232.9) (227.5) (675.4)
Group turnover 1,110.8 1,049.4 2,774.7
The Group adopted the Amendment to Financial Reporting Standard 5 (FRS 5)
'Reporting the Substance of Transactions' Application note G in respect of the
2004 financial statements. Accordingly, the interim results for the 26 weeks to
2 August 2003 have been restated. There is no impact on the prior year profit
before taxation or taxation charge. The prior year interim balance sheet
reflects a reclassification between stock (#9.1 million), debtors (#10.5
million) and creditors (#1.4 million).
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated)
#m #m #m
Turnover as previously disclosed 1,071.5
Restated for FRS 5 (22.1)
Group turnover 1,110.8 1,049.4 2,774.7
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated)
#m #m #m
(b) (Loss)/profit before interest and taxation
Continuing operations
Retail (32.2) (31.1)
46.2
Entertainment Wholesale and Publishing 7.3 5.2 42.2
Common (costs)/income
(5.5) (5.6) (11.5)
(Loss)/profit before interest and taxation (30.4) (31.5) 76.9
Common costs relate to the Group's corporate centre, amortisation of acquisition
goodwill and other consolidation adjustments.
3. (Loss)/Profit on Ordinary Activities Before Taxation
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
#m #m #m
(Loss)/profit on ordinary activities before taxation
is stated after charging:
Operating leases:
Land and buildings 76.9 72.7 147.4
Plant and equipment 2.8 2.7 5.6
Depreciation of tangible fixed assets:
Owned Assets 27.9 27.5 56.4
Loss on the disposal of fixed assets 0.3 2.0 2.1
Net income from property portfolio transactions (2.1) (3.4) (6.9)
Amortisation of acquisition goodwill 1.5 1.5 3.1
Amortisation of other intangible assets 0.4 0.7 1.9
4. Taxation
The Group has a deferred tax asset of #11.4 million (26 weeks to 2 August 2003:
#13.4 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 year-end.
5. Dividends Payable to Shareholders
The interim dividend of 0.39 pence (2003: 0.36 pence) per share will be paid
on 8 December 2004 to members registered at the close of business on 17
September 2004.
6. Earnings per Share
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
Weighted average number of shares (millions) 1,403.4 1,394.7 1,396.7
Diluted weighted average number of shares (millions) 1,497.9
#m #m #m
(Loss)/profit for the financial period (23.1) (24.3) 46.0
Adjustments for goodwill amortisation 1.5 1.5 3.1
Adjusted (losses)/earnings (21.6) (22.8) 49.1
Basic earnings per share (pence) (1.6) (1.7) 3.3
Diluted earning per share (pence) (1.6) (1.7) 3.1
Basic adjusted earning per share (pence) (1.5) (1.6) 3.5
Diluted adjusted earnings per share (pence) (1.5) (1.6) 3.3
For the two periods above where losses are reported, diluted earnings per share
are equal to the basic earnings per share.
7. Consolidated Cash Flow
a) Reconciliation of operating (loss)/profit to net cash flow from operating
activities
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
(Restated)
#m #m #m
Group operating (loss)/profit (30.5) (32.0) 75.7
Depreciation, amortisation and impairment 29.8 29.7 61.8
Increase in stocks (39.1) (26.5) (5.9)
Movements in other working capital (81.9) (106.7) (20.7)
Loss on disposal of fixed assets 0.3 2.0 2.1
Net cash (outflow)/inflow from operating activities (121.4) (133.5) 113.0
7. Consolidated Cash Flow (continued)
b) Analysis of changes in net funds/debt
At Non At
1 February 2004 Cash flow Cash items 31 July 2004
#m #m #m #m
Cash and current bank accounts (net of overdraft) 150.0 (171.8) - (21.8)
Deposit with banks 1.4 3.4 - 4.8
Cash inflow/(outflow) before use of liquid funds 151.4 (168.4) - (17.0)
and financing
Short-term loan - (16.0) - (16.0)
Senior Notes (98.5) - (0.3) (98.8)
Net funds/debt 52.9 (184.4) (0.3) (131.8)
c) Reconciliation of net cash flow to movement in net debt
2004
#m
Decrease in cash in the period (168.4)
Movement in short-term loan (16.0)
Movement in Senior Notes (0.3)
Change in net funds in the period (184.7)
Net funds at 1 February 2004 52.9
Net debt at 31 July 2004 (131.8)
d) Financing
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
Restated Restated
#m #m #m
Short-term loan notes - - (0.2)
Short-term loan 16.0 50.0 -
Issue of share capital 1.1 0.3 1.6
Net purchase of own shares (0.3) (0.5) (0.1)
Net cash inflow from financing
16.8 49.8 1.3
8. Adoption of UITF 38 - 'Accounting for ESOP Trusts'
26 weeks to 26 weeks to 52 weeks to
31 July 2004 2 August 2003 31 January 2004
Restated Restated
#m #m #m
Opening shareholders' funds as previously stated 435.0 435.0
Prior period adjustment to reflect own shares
netted against equity
(4.2) (4.2)
Opening shareholders' funds as restated 457.1 430.8 430.8
Net purchase of own shares (0.3) (0.5) (0.1)
Issue of share capital 1.1 0.3 1.6
(Loss)/ retained profit (28.5) (29.4) 24.8
Closing shareholders' funds 429.4 401.2 457.1
The Group has adopted Urgent Issues Task Force Abstract 38: 'Accounting for ESOP
Trusts' for the 2004 Interim results. As a result shares in the company held
through an employee share scheme trust which were previously reported as
investments are now recorded as a deduction from equity shareholders funds. At
31 July 2004, the carrying value of these shares was #4.6 million which has been
set against the profit and loss reserve on the balance sheet. The comparative
figures for investments and profit and loss reserve have been restated to
reflect the change in treatment such that shareholders' funds at 31 January 2004
and 2 August 2003 have been reduced by #4.3 million and #4.7 million
respectively.
9. Nature of Financial Information
The financial information for the year ended 31 January 2004 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 7 September 2004.
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 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 enquiries 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. This report has been prepared for and only for the
Company for the purpose of the Listing 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.
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
31 July 2004.
PricewaterhouseCoopers LLP
Chartered Accountants
London
7 September 2004
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LDLLBZKBBBBD
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