Group financial review
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Balance sheet and return on capital
| As at |
1 March 2008 £m |
3 March 2007 £m |
|---|---|---|
| Goodwill | 1,922.7 | 1,878.9 |
| Other intangible assets | 83.7 | 73.4 |
| Property, plant and equipment | 731.8 | 691.6 |
| Inventories | 1,004.8 | 906.4 |
| Instalment receivables | 432.0 | 416.8 |
| Other trading assets | 196.8 | 188.3 |
| 4,371.8 | 4,155.4 | |
| Trade and other payables | (1,130.8) | (1,059.1) |
| Other trading liabilities | (101.5) | (84.5) |
| (1,232.3) | (1,143.6) | |
| Invested capital | 3,139.5 | 3,011.8 |
| Retirement benefit assets | 83.7 | 9.3 |
| Net tax liabilities | (52.0) | (2.6) |
| Net cash | 174.0 | 60.2 |
| Reported net assets | 3,345.2 | 3,078.7 |
| Return on invested capital | 12.7% | 12.0% |
Balance sheet and return on capital
Invested capital amounted to £3,139.5m, an increase of £127.7m on the year-end balance sheet at 3 March 2007. Higher goodwill reflects the Focus DIY stores acquisition, while growth in property, plant and equipment is driven by the increase in stores. Inventory levels were higher principally due to the growth in operations, increased overseas sourcing and the earlier timing of Easter; this higher inventory was largely offset by the increase in payables.
Reported net assets amounted to £3,345.2m, an increase of £266.5m. The further two key drivers of this movement were the £113.8m increase in net cash and the £74.4m improvement in the retirement benefit assets valuation. Total reported net assets are equivalent to 386p per share, excluding shares held in the ESOT (2007: 354p).
Benchmark pre-tax return on invested capital is a key performance measure for the Group. Benchmark operating profit plus share of post-tax results of joint ventures and associates was £399.6m, up £39.5m or 11%, while year-end invested capital grew by 4%. This led to pre-tax ROIC increasing to 12.7%, representing a 70 basis point improvement on the previous balance sheet date.
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