Notes to the Financial Statements
For the short period 1 April 2006 to 3 March 2007
5. SEGMENTAL INFORMATION
Primary reporting format - business segments
The Group’s primary reporting format is by business segment.This is in line with the current management structure, which reflects the different risks associated with the different businesses.The Group is organised into three main business segments: Argos, Homebase and Financial Services together with Central Activities. Revenue earned from sales is disclosed by origin and is not materially different from revenue by destination.
Short period ended 3 March 2007
(a) Income statement
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
||||||
| Revenue | 6 | 3,912.8 | 1,606.3 | 87.6 | – | 5,606.7 | |||||
| Profit | |||||||||||
| Operating profit before exceptional items | 300.9 | 51.2 | 4.5 | (28.7) | 327.9 | ||||||
| Exceptional items | 10 | – | (4.1) | – | (18.6) | (22.7) | |||||
| Segment result | 300.9 | 47.1 | 4.5 | (47.3) | 305.2 | ||||||
 |
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| – Finance income | 11 | 55.5 | |||||||||
| – Finance expense | 11 | (71.4) | |||||||||
| – Exceptional finance income | 10 | 6.9 | |||||||||
| Net financing costs | 11 | (9.0) | |||||||||
| Share of post-tax results of joint ventures and associates | 18 | 0.7 | |||||||||
| Profit before tax | 296.9 | ||||||||||
| Taxation | 12 | (109.5) | |||||||||
| Profit for the period | 187.4 | ||||||||||
The result for Financial Services is after deducting funding costs of £16.4m.
(b) Balance sheet
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
||||||
| Segment assets | 1,222.8 | 605.0 | 439.7 | 292.9 | 2,560.4 | ||||||
| Investment in associates and joint ventures | 18 | – | – | – | 9.2 | 9.2 | |||||
| Taxation | – | – | – | 77.4 | 77.4 | ||||||
| Goodwill | 15 | 1,152.3 | 726.6 | – | – | 1,878.9 | |||||
| Total assets | 2,375.1 | 1,331.6 | 439.7 | 379.5 | 4,525.9 | ||||||
| Segment liabilities | (708.8) | (383.7) | (49.3) | (1.8) | (1,143.6) | ||||||
| Borrowings | – | – | – | (223.6) | (223.6) | ||||||
| Taxation | – | – | – | (80.0) | (80.0) | ||||||
| Total liabilities | (708.8) | (383.7) | (49.3) | (305.4) | (1,447.2) | ||||||
| Net assets | 1,666.3 | 947.9 | 390.4 | 74.1 | 3,078.7 | ||||||
| Less goodwill | (1,152.3) | (726.6) | – | – | (1,878.9) | ||||||
| Net operating assets | 514.0 | 221.3 | 390.4 | 74.1 | 1,199.8 |
(c) Other segment items
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
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| Depreciation of property, plant and equipment | 17 | (70.2) | (59.8) | – | – | (130.0) | |||||
| Impairment of fixed assets | 17 | – | (4.1) | – | – | (4.1) | |||||
| Amortisation of intangible assets | 16 | (14.1) | (1.8) | (0.5) | – | (16.4) | |||||
| Capital expenditure on property, plant and equipment | 17 | (54.8) | (79.3) | – | – | (134.1) | |||||
| Capital expenditure on intangible assets | 16 | (27.6) | – | (0.7) | – | (28.3) |
Year ended 31 March 2006
(d) Income statement
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
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| Revenue | 6 | 3,892.6 | 1,561.8 | 93.6 | – | 5,548.0 | |||||
| Profit | |||||||||||
| Operating profit before exceptional items | 296.0 | 51.8 | 6.1 | (7.9) | 346.0 | ||||||
| Exceptional items | 10 | – | (24.7) | – | – | (24.7) | |||||
| Segment result | 296.0 | 27.1 | 6.1 | (7.9) | 321.3 | ||||||
|
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| – Finance income | 11 | 45.7 | |||||||||
| – Finance expense | 11 | (90.4) | |||||||||
| Net financing costs | 11 | (44.7) | |||||||||
| Share of post-tax results of joint ventures and associates | 18 | (4.2) | |||||||||
| Profit before tax | 272.4 | ||||||||||
| Taxation | 12 | (96.0) | |||||||||
| Profit for the financial year | 176.4 | ||||||||||
The results for Financial Services are after deducting funding costs of £15.8m.
The result for Argos has been restated for the year ended 31 March 2006 by reallocating £5.0m of costs to Central Activities. In addition, Central Activities have been reduced by £8.3m due to a further restatement required as a result of merger accounting principles being applied as set out in Note 2.
(e) Balance sheet
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
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| Segment assets | 1,149.2 | 632.7 | 432.2 | 1,109.2 | 3,323.3 | ||||||
| Investment in associates and joint ventures | 18 | – | – | – | 0.4 | 0.4 | |||||
| Taxation | – | – | – | 115.5 | 115.5 | ||||||
| Goodwill | 15 | 1,152.3 | 726.6 | – | – | 1,878.9 | |||||
| Total assets | 2,301.5 | 1,359.3 | 432.2 | 1,225.1 | 5,318.1 | ||||||
| Segment liabilities | (589.6) | (325.7) | (63.1) | (0.7) | (979.1) | ||||||
| Borrowings | 23 | – | – | – | (1,268.8) | (1,268.8) | |||||
| Taxation | – | – | – | (120.3) | (120.3) | ||||||
| Total liabilities | (589.6) | (325.7) | (63.1) | (1,389.8) | (2,368.2) | ||||||
| Net assets | 1,711.9 | 1,033.6 | 369.1 | (164.7) | 2,949.9 | ||||||
| Less goodwill | (1,152.3) | (726.6) | – | – | (1,878.9) | ||||||
| Net operating assets | 559.6 | 307.0 | 369.1 | (164.7) | 1,071.0 |
(f) Other segment items
| Notes | Argos £m |
Homebase £m |
Financial Services £m |
Central Activities £m |
Total £m |
||||||
| Depreciation of property, plant and equipment | 17 | (65.4) | (52.6) | – | – | (118.0) | |||||
| Impairment of fixed assets | 17 | – | (12.8) | – | – | (12.8) | |||||
| Amortisation of intangible assets | 16 | (14.2) | (1.8) | (0.9) | – | (16.9) | |||||
| Capital expenditure on property, plant and equipment | 17 | (133.3) | (98.3) | – | – | (231.6) | |||||
| Capital expenditure on intangible assets | 16 | (22.4) | – | (0.9) | – | (23.3) |
(g) Geographical segments
Home Retail Group trades only in the UK and Eire and consequently all revenues,
capital expenditure and segment assets arise there.