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financial review

Financial review

Key Performance Indicators 2011
£m		 2010
£m		 Growth
(Decline)
Pro forma basis:      
Sales 1,868.3 2,016.6 (7)%
Like for like sales % (11.0)% (4.2)%  
Operating profit (before exceptional items) 37.4 80.4 (53)%
Exceptional items (operating and financing) (28.7) (5.3)  
Profit before tax (before exceptional items) 28.9 74.2 (61)%
Profit before tax 0.2 68.9  
Statutory basis – continuing operations:      
Sales 1,150.2 1,281.1 (10)%
Like for like sales % (14.5)% (2.4)%  
Operating profit (before exceptional items) 27.4 75.1 (63)%
Exceptional items (operating and financing) (16.2) (1.6)  
Profit before tax (before exceptional items) 18.8 68.9 (73)%
Profit before tax 2.6 67.3  
       
Discontinued operations (loss) profit after tax and exceptional items (118.5) 1.2  
       
Adjusted basic earnings per share (continuing operations) 3.8p 11.7p (67)%
Basic earnings per share (continuing operations) (1.1)p 11.3p  
Total dividend per share 0.9p 7.4p  
       
Underlying net debt 170.7 67.6   
Free cashflow (68.7) 22.4   
       
Store numbers (continuing operations) 273 292  
Average trading square footage (continuing operations) 1.60m 1.62m (0.9)%

View this table in the 2011 Annual Report

Sales

  2011
£m		 2010
£m		 Year on
year growth
(decline)2
%		 Constant
exchange
growth
(decline)2
%		 Like for
like
sales
growth
(decline)4
%
HMV UK & Ireland 1,070.1 1,241.9 (13.8) (13.6) (14.8)
HMV International 33.2 31.1 6.9  3.3  4.3 
HMV Live 46.9 8.1 - - -
Total continuing operations 1,150.2 1,281.1 (10.2) (10.1) (14.5)
HMV Canada 218.9 221.9 (1.3) (8.8) (8.8)
Waterstone’s 499.2 513.6 (2.8) (2.6) (3.8)
Discontinued operations 718.1 735.5 (2.4) (4.5) (5.3)
Total HMV Group 1,868.3 2,016.6 (7.4) (8.1) (11.0)

View this table in the 2011 Annual Report

Operating profit (before exceptional items)

Pro forma operating profit4
(before exceptional items)		 2011
£m		 2010
£m		 2011
% of
sales		 2010
% of
sales		 Year on
year
growth
(decline)1
%		 Constant
exchange
growth
(decline)2
%
             
HMV UK & Ireland 24.0  73.8  2.2 5.9 (67.5) (67.5)
HMV International 1.4  1.2  4.4 4.0 16.8  11.1 
HMV Live 3.0  (0.2) 6.4 - - -
Continuing operations 28.4  74.8  2.5 5.8 (62.0) (62.1)
Share of post-tax (loss) profit of joint
ventures and associates		 (1.0) 0.3  - - - -
Total continuing operations 27.4  75.1  2.4 5.9 (63.5) (63.6)
HMV Canada5 0.5  2.5  0.2 1.1 (78.9) (80.7)
Waterstone’s5 9.5  2.8  1.9 0.5 237.7  238.8 
Discontinued operations 10.0  5.3  1.4 0.7 91.1  90.9 
Total HMV Group 37.4  80.4  2.0 4.0 (53.4) (53.5)

View this table in the 2011 Annual Report

  1. Total sales in 2011 are for 53 weeks compared with 52 weeks in 2010. The additional week’s trading contributed 1.2% to total Group sales growth.
  2. Year on year growth for the 53 week period compared with the corresponding 52 week period last year is based on results translated at the actual exchange rates being the weighted average exchange rates for the year ended 30 April 2011 and year ended 24 April 2010 respectively.
  3. Constant exchange growth for the 53 week period compared with the corresponding 52 week period last year is based on the weighted average exchange rates for the year ended 24 April 2010.
  4. HMV Group’s like for like sales performance is calculated at constant exchange rates and measures stores that were open at the beginning of the previous financial year (i.e. open at the beginning of May 2009) and that have not been resized, closed or re-sited during that time.  It includes sales from internet sites and is only ever the net amount received.
  5. On a pro forma basis, Waterstone’s and HMV Canada are presented as if they had been continuing operations throughout the financial year.

Cash flow and net debt

  2011 
£m 		 2010 
£m 
EBITDA1 80.5  123.9 
Capital expenditure (28.2) (39.9)
Working capital outflow (96.7) (32.2)
Exceptional charges and provision utilisation (9.9) (5.1)
Exceptional lease premium received 13.8  -
Other (3.1) (4.0)
Net interest paid (8.9) (4.7)
Taxation (16.2) (15.6)
Free cashflow2 (68.7) 22.4 
Investments in joint ventures and associates (2.1) (8.1)
Debt issue costs (2.9) - 
Dividends paid (27.5) (31.2)
Purchase of MAMA Group Plc including related fees and net debt acquired -  (48.0)
Repayment of loan from joint venture -  4.5 
Other (1.9) (0.7)
Net cash outflow (103.1) (61.1)
Underlying opening net debt3 (67.6) (6.5)
Underlying closing net debt3 (170.7) (67.6)

View this table in the 2011 Annual Report

  1. EBITDA – Earnings before interest, taxation, depreciation, amortisation and exceptional items. 2010/11 is pro forma, based on discontinued activities being fully consolidated through the period
  2. Free cashflow – Cashflow from operating activities after capital expenditure and net interest
  3. Underlying net debt – Underlying net debt is stated before unamortised deferred financing fees

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