Tesco 1999 Annual Report Download - page 9

TESCO PLC ANNUAL REPORT 1999 7
Directors’ report
The directors present their annual report to shareholders on
the affairs of the Group together with the audited consolidated
financial statements of the Group for the 52 weeks ended
27 February 1999. The comparisons against the previous year
are for the 53 weeks to 28 February 1998.
Principal activity and business review
The principal activity of the Group is the operation of food
stores and associated activities in the UK, Republic of Ireland,
France, Czech Republic, Slovakia, Hungary, Poland and
Thailand. A review of the business is contained in the Annual
Review which is published separately and, together with this
document, comprises the full Tesco PLC Annual Report
and Accounts.
Group results
Group turnover excluding VAT rose by £706m to £17,158m,
representing an increase of 4.3%. Group profit on ordinary
activities before taxation, integration costs, loss on disposals and
goodwill amortisation was £881m compared with £832m for
the previous year, an increase of 5.9%. Including integration
costs, loss on disposals and goodwill amortisation, Group profit
on ordinary activities before taxation for the year was £842m.
The amount allocated to the employee profit-sharing scheme
this year was £38m as against £35m last year. After provision
for tax of £237m and dividends, paid and proposed, of £277m,
profit retained for the financial year amounted to £329m.
Dividends
The directors recommend the payment of a final dividend
of 2.87p per ordinary share to be paid on 1 July 1999 to
members on the Register at the close of business on 23 April
1999. Together with the interim dividend of 1.25p per
ordinary share paid in December 1998, the total for the year
comes to 4.12p compared with 3.87p for the previous year, an
increase of 6.5%.
Tangible fixed assets
Capital expenditure amounted to £1,067m compared with
£841m during the previous year. In the directors’ opinion, the
properties of the Group have a market value in excess of the
book value of £6,032m included in these financial statements.
Acquisitions
During the year the Group acquired, for a consideration of
£206m, a retailing business in Thailand. Details of acquisitions
are set out in note 32 to the financial statements.
Post Balance Sheet event
On 23 March 1999 the Group announced it is to form a
partnership company with Samsung Corporation to develop
hypermarkets in South Korea. The Group will initially invest
£80m in cash for 51% of the business and a further £50m for an
additional 30% holding in June 1999.
Share capital
The authorised and issued share capital of the company,
together with details of the shares issued during the period, are
shown in note 23 to the financial statements. A bonus issue was
made on 3 July 1998 on the basis of two new shares for every
one held on that date.
Company’s shareholders
The company is not aware of any ordinary shareholders with
interests of 3% or more.
Directors and their interests
The names and biographical details of the present directors are
set out in the separately published Annual Review.
Mr T P Leahy, Mr J Gildersleeve, Mr TJRMason and
Baroness O’Cathain retire from the Board by rotation according
to the company’s Articles of Association. Mr P A Clarke,
Mr D T Potts, Mr C L Allen, being appointed during the year
and Dr H Einsmann, appointed on 1 April 1999, will also
retire. Being eligible, they all offer themselves for re-election.
The service contracts of Mr T P Leahy, Mr J Gildersleeve, Mr
TJRMason, Mr P A Clarke and Mr D T Potts are terminable
on two years’ notice from the company.
Baroness O’Cathain, Mr C L Allen and Dr H Einsmann do not
have service contracts.