Profit on sale of properties
A profit of £7 million was delivered on the sale of properties during the year, which includes a profit realised on disposal to the Land Securities JV, compared to a profit of £7 million in 2007.
Financing fair value movements
Fair value movements for the Group resulted in a £4 million expense in the year (2007: £8 million income). The Group has one non-compliant hedge remaining as at 22 March 2008, with a notional principal value of £75 million.
One-off items
Fair value gain on other financial asset
During the year the Group recognised a £22 million fair value gain on a financial asset. This asset was disposed of during the year.
Cost associated with Office of Fair Trading dairy inquiry
The Group has incurred £27 million of costs associated with the Office of Fair Trading dairy inquiry.
Costs incurred in relation to approach from Delta Two
The Group has incurred £7 million of costs in relation to the approach from Delta Two.
Taxation
The income tax charge was £150 million (2007: £153 million), with an underlying rate of 30.9 per cent (2007: 34.8 per cent) and an effective rate of 31.3 per cent (2007: 32.2 per cent).
The underlying rate exceeded the nominal rate of UK corporation tax due to the lack of effective tax relief on depreciation of UK retail properties, offset by the deferred tax rate change and over provisions in prior years. The disallowable depreciation amounted to £71 million in 2008 (2007: £73 million) and is anticipated to be similar in the next financial year. The effective tax rate is lower than in the previous year due to over provisions in prior years offset by higher nondeductible expenses for tax purposes principally driven by the costs associated with the Office of Fair Trading dairy inquiry. The Group expects an underlying tax rate of around 32 per cent to 33 per cent in 2009.
Underlying basic earnings per share
Underlying basic earnings per share increased by 33.3 per cent from 14.7 pence to 19.6 pence in 2008, reflecting the improvement in underlying profit after tax attributable to equity holders.
The weighted average number of shares increased by 27.4 million due to the vesting of share option schemes.
Dividends
A final dividend of 9.0 pence per share has been approved by the Board (2007: 7.35 pence) and will be paid on 18 July 2008 to shareholders on the Register of Members at the close of business on 23 May 2008.
Underlying dividend cover ratio is 1.63 times, in line with our policy of being between 1.5 times and 1.75 times.
Summary cash flow statement
Group net debt as at 22 March 2008 was £1,503 million (2007: £1,380 million) an increase of £123 million from the 2007 year-end position, of which £150 million reflects the reversal of the working capital timing differences identified at the 2007 year-end.
|
Summary cash flow statement for the 52 weeks to 22 March 2008 |
2008 £m |
2007 £m |
|---|---|---|
| Cash generated from operations 1 | 998 | 830 |
| Net interest | (97) | (83) |
| Corporation tax (paid)/received | (64) | 9 |
| Cash flow before appropriations | 837 | 756 |
| Purchase of non-current assets | (986) | (788) |
| Disposal of non-current assets/operations | 197 | 93 |
| Proceeds from issuance of ordinary shares | 43 | 81 |
| Capital redemption | (10) | (2) |
| Investment in joint ventures | (31) | – |
| Repayment of borrowings | (36) | (75) |
| Debt restructuring costs | - | (2) |
| Dividends paid | (178) | (140) |
| Net decrease in cash and cash equivalents | (164) | (77) |
| Increase in debt | 46 | 79 |
| Other non-cash movements | (5) | 33 |
| Movement in net debt | (123) | 35 |
| Opening net debt | (1,380) | (1,415) |
| Closing net debt | (1,503) | (1,380) |
- 2007 comparatives includes £240 million cash paid into the defined benefit schemes.