M & S Cash flows

Thursday, October 24, 2019

MARKS AND SPENCER CASH FLOWS FROM 2013 TO 2019
Sales growth 3% 0% 3% 0% 1% -3%
Cash Flows 2013 2014 2015 2016 2017 2018 2019 Total
Sales Revenue 10000 10300 10300 10600 10600 10700 10400 72900 100%  of sales
Staff, pensions & other operatng costs -8800 -9200 -9100 -9300 -9500 -9700 -9500 -65100 -89%  of sales
Gross funds from operations 1200 1200 1200 1200 1100 1000 900 7800 11%  of sales
Financial Charges -500 -500 -500 -500 -600 -500 -500 -3500 -45%  of gross funds
Funds after financial charges 700 700 700 700 500 500 400 4300 55%  of gross funds
Circulating capital changes 0 0 100 0 0 -100 100 100
Avilable for investment 700 700 800 700 500 400 500 4300 55%  of gross funds
Investment -800 -600 -700 -600 -400 -300 -300 -3700 -86%  of available
Available for financial use -200 100 100 200 100 100 200 600
Financial use 100 0 -200 -200 100 -300 -200 -600 -100%  of available
Cash changes 0 0 -100 0 200 -200 0 0
Foreign exchange 0 0 0 0 0 0 0 0
Cash after fx 0 0 -100 0 200 -200 0 0
staff etc  to sales 88% 89% 89% 88% 89% 91% 91% 89%
funds after Financial Charges 7% 7% 7% 7% 5% 4% 4% 6%
Average pay 16200 16400 16900 17900 18300 18700 18900 17614
Number employed 81730 85810 83070 82950 84940 84620 80100 83317
COMMENT
Little growth in sales year on year, explained by the closure of many retail outlets Operating costs are 90% of sales. This seem
rather high. Staff costs were 15% of sales; the average cost per employee rising slowly from £16000 to £19,000. Numbers
employed were up one year, down the next, rising from 82,000 to 83,000.
Gross funds generated is a small % of revenue and dropping.
Financial charges used up almost 50% of the generated funds. Dividends made up 67% of finanacial charges. For the shareholders
this is great in one sense, but if that money is needed to fund improvements in performance , perhaps it should be used that way.
Investment in assets takes up 86% of the funds available. The effect of this expenditure on performance is not obvious and, from a
shareholder’s point of view, it hoped it will be seen  in the future.
The funds that are left are used up in financial source movements, principally in paying off loans. This is resulting in a reduction of
interest paid, which is good. The company uses up all the cash it generates. If it has a surplus one year, it spends it the next.
A  half % increase in sales in 2020, combined with a half % reduction in operating costs would increase funds generated from 900 to over 1,400, which would transform the situation.