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Notes to the Interim Financial Report continued
Net funds include investments of £304.0 million (14 November 1998 £273.0 million) held under trust to fund
extended warranty liabilities, resulting in a net free cash balance of £500.0 million (14 November 1998 £32.2
million).
All turnover and operating profit are derived from continuing operations.
The Retail division operates in the United Kingdom and the Republic of Ireland. The European Property
division operates mainly in Belgium, Luxembourg, Germany and France. Freeserve operates in the United
Kingdom as an internet service provider and portal. There were no material exports from the locations in
which the Group operates.
The Retail exceptional item for the 28 weeks ended 13 November 1999 includes a charge of £1.6 million
(28 weeks ended 14 November 1998 £1.7 million, 52 weeks ended 1 May 1999 £3.0 million) for the cost of
ensuring that the Group’s computer and other operating systems are able to function effectively in the Year
2000 and beyond. The 1998/99 Retail exceptional items also include a charge of £10.3 million for the
post-acquisition integration of the retail business of Seeboard plc with the Retail division.
A further £3.3 million exceptional charge has been incurred on additional integration costs of prior years’
acquisitions.
3 Exceptional profit on partial sales of subsidiaries
On 26 July 1999 the Group made an Initial Public Offering of a minority interest in Freeserve plc and on 2
August 1999 Freeserve plc was admitted to the London Stock Exchange and Nasdaq. Net proceeds of
£242.2 million were received after deducting all issue costs, flotation fees, expenses and marketing costs.
A consolidated net gain of £219.3 million arises after deduction of minority interests.
A further consolidated net gain of £1.1 million arose on the deemed disposal in respect of shares issued by
Freeserve plc as part of the purchase consideration for Babyworld.com Limited acquired on 6 August 1999.
As at 13 November 1999 Dixons Group plc owned 80.04% of the issued share capital of Freeserve.
In the 52 weeks ended 1 May 1999 an exceptional credit of £7.5 million was recognised in respect of further
consideration receivable on the sale of 40% of The Link Stores Limited in 1997/98.
6 Dividends
Per Ordinary share
Special interim of 7.5 pence paid (1998/99 nil) 36.3 - -
Interim of 4.2 pence proposed (1998/99 3.5 pence) 20.3 15.1 15.1
Final for 1998/99 of 11.8 pence paid 51.2
Ordinary dividends paid and proposed 56.6 15.1 66.3
Preference dividends paid 2.2 4.7 8.9
58.8 19.8 75.2
As a result of the conversion of the Preference shares into Ordinary shares the Preference dividend paid on 31
July 1999 will be the final such payment.
7 Earnings per Ordinary share
28 weeks
1999/00
£million
28 weeks
1999/00
£million
28 weeks
1998/99
£million
28 weeks
1998/99
£million
52 weeks
1998/99
£million
52 weeks
1998/99
£million
Profit for the period 279.0 54.7 186.2
Preference dividends (2.2) (4.7) (8.9)
Basic earnings 276.8 50.0 177.3
Preference dividends 2.2 4.7 8.9
Diluted earnings 279.0 54.7 186.2
million million million
Basic weighted average number of shares 439.8 431.0 431.7
4 Net interest
28 weeks
1999/00
£million
28 weeks
1998/99
£million
52 weeks
1998/99
£million
Convertible Preference shares 42.2 47.3 47.3
Employee share options and incentive schemes 9.8 3.7 8.8
Diluted weighted average number of shares 491.8 482.0 487.8
Interest receivable and similar income 26.4 22.8 44.5
Interest payable (10.6) (9.8) (18.4)
15.8 13.0 26.1
Interest capitalised 0.3 1.3 2.0
5 Taxation on profit on ordinary activities
16.1 14.3 28.1
The taxation charge on profit on ordinary activities before exceptional items is based on the estimated effective
rate of taxation of 23.4 per cent for the 52 weeks ending 29 April 2000. There is an exceptional tax credit of
£0.7 million in respect of the charges for Year 2000 costs and integration costs.
pence pence pence
Basic earnings per Ordinary share 62.9 11.6 41.1
Exceptional items, net of taxation (49.1) 2.1 0.6
Adjusted basic earnings per Ordinary share 13.8 13.7 41.7
Diluted earnings per Ordinary share 56.7 11.3 38.2
Exceptional items, net of taxation (43.9) 1.9 0.5
Adjusted diluted earnings per Ordinary share 12.8 13.2 38.7
Adjusted earnings per Ordinary share exclude exceptional items.
10 Dixons Group plc
Dixons Group plc 11