Thorn-EMI 1995 Annual Report

increasing Pace of
THORN achieved a record operating profit before operating exceptional items off152.4rn,
up 18.0 per cent on the previous year. This strong performance was reflected in continued
improvement in return on sal€s to 9.6 per cent, compared with 8.7 per cent in 1993/94.
The increasing pace ofprogress was also demonstrated by the growing revenue value ofthe
worldwide rental base - which was up 6 p€r c€nt at 31 March 1995 conpared with the prior
year-end.These results confirm the continuing benefrs flowing from cost effrciencies and
the successful introduction in recent years ofnew propositions coupled with the expanded
product range. Overall,THORN is confident of further strong profit growth in the current
financial year.
The decision to effect an accelerated exit from the remaining Rumbelows electrical retailing
operations in the UKwas announced in February 1995. Store activity had ceased byyear-end.
This decision is reflected in an exceptional charge against op€rating profit amounting to f97,9m
(before UITF3 and attributable taxation adiustments); this represents a significant saving to the
estimate disclosed on the announcement date.This rationalisation is expected to secure an
estimated incremental profit contribution offl5m in 1995/96 and allows the skills and resources
in THORN UK to be concentrated on attractive grou,th opportunities.
Moves to increase effectiveness throughout the business continue. From 31 Mardt1995,a
single management structure (THORN Europe) has been formed to run all operations in
Continental Europe and the UK.This structure improves our ability to realise the significant
synergies across the European operations and thereby increase our competitive strength.
Amerlcas
THORNAmericas achieved a solid gain in agreements on rent over the yeat despite the
competitive conditions evident in the industry. At 31 March 1995, agreements on rent were 11.5
per cent ahead ofthe prior year- with the great bulk ofthe increase attributable to organic growth