business analysis

Financial Analysis of David Jones BUSN 1001

Tutor: Libby Zhang | 1

FINANCIAL ANALYSIS

OF

DAVID JONES LIMITED

(30/05/2011)



EXECUTIVE SUMMARY

The purpose of this Report, ‘Financial Analysis of David Jones Limited’, was to assess the

financial strengths and weaknesses of the company and guide potential investors to make an

informed decision on whether or not to invest in the company.

This Report interprets and analyses the financial reports of David Jones and two of its

competitors, MYER and Harvey Norman, over the period of three years (from 2008 to 2011)

using different methods such as trend analysis, common-size statements and ratio analysis.

The report also examines relevant government and industry statistics, stock exchange and

other market information, and relevant media comments to provide potential investors with a

recommendation whether or not David Jones is a worthy investment at present.



Table of Contents EXECUTIVE SUMMARY ................................................................................................................................ 2

1. Company Description ................................................................................................................... 4

2. Introduction ...................................................................................................................................... 6

3. Conclusion & Recommendation ...................................................................................................... 7

4. Discussion .......................................................................................................................................... 8

4.1 Trend Analysis ............................................................................................................................. 8

4.2 Common Size Statements .......................................................................................................... 9

4.3 Ratio Analysis ............................................................................................................................ 10

4.3.1 Profitability Ratios .............................................................................................................. 10

4.3.2 Efficiency Ratios ................................................................................................................. 15

4.3.3 Liquidity Ratios .................................................................................................................. 18

4.3.4 Market Based Ratios .......................................................................................................... 23

4.4 Market Information and Industry Statistics .......................................................................... 24

4.4.1 Stock Exchange Performance ............................................................................................ 24

4.4.2 Industry Statistics .............................................................................................................. 25

4.4.3 Inflation & Consumer Confidence ................................................................................... 25

4.4.4 Interest Rates ..................................................................................................................... 26

4.4.5 Exchange Rates .................................................................................................................. 26

4.5 Media Comments and Public Opinions ................................................................................. 27

5. References ........................................................................................................................................ 28

6. Appendices ...................................................................................................................................... 30

6.1 Appendix A: David Jones .......................................................................................................... 30

6.1.1 Trend Analysis ..................................................................................................................... 30

6.1.2 Common-size Statements .................................................................................................. 36

6.1.3 Ratio Analysis ...................................................................................................................... 42

6.2 Appendix B: Financial reports of Myer ................................................................................... 46

6.2.1 Trend Analysis .................................................................................................................... 46

6.2.2 Common-size Statements ................................................................................................. 52

6.2.3 Ratio Analysis ..................................................................................................................... 60

6.3 Appendix C: Harvey Norman .................................................................................................. 63

6.3.1 Trend Analysis .................................................................................................................... 63

6.3.2 Common-size Statements ................................................................................................. 65



6.3.3 Ratio Analysis ..................................................................................................................... 67

1. Company Description

David Jones Limited

David Jones Limited is a leading retailer, positioned as Australia's only true upmarket department

store chain selling high quality merchandise at a reasonable price. A focus on building the fashion

franchise, particularly for women, has generated significantly higher trading volumes, and

attracted an increasing number of suppliers. Its growing importance to suppliers has delivered

improved contract terms, increasing profitability and reduced risk.

David Jones Limited operates 35 department stores and 2 warehouse outlets throughout Australia.

American Express joined David Jones to generate a David Jones branded credit card.

In 1995, David Jones became a listed company in the Australian Stock Exchange under 'DJS' and

has remained a strong company since, attracting many investors to further fuel its growth and

solidifying its presence in the market.

Some of the main competitor of David Jones is Coles Myer Ltd, Howard Smith Pty Ltd,

Warehouse Group, Nuance Global Traders, Harvey Norman Holdings Ltd and Harris Scarfe

Holdings



Competitors evaluated in this report:

Myer Holding Limited

Myer Holding Limited (MYR) is the most significant competitor of David Jones. Myer is one of

Australia's largest department store groups targeting a wide spectrum of consumers. The

company has a national network of 65 stores in Australia. Myer retails designer, national, and

international fashion and apparel for men, women, and children, and operates a consumer loyalty

program.

Harvey Norman Holdings Limited

Harvey Norman Holdings Limited (HVN) is an Australian leading electrical franchisor. Harvey

Norman's principal activities consist of an integrated retail, franchise and property enterprise

including sale of furniture, bedding, computers, communications and consumer electrical

products in New Zealand, Slovenia and Ireland.



2. Introduction

This report aims to find out the stability and performance of David Jones by analysing its

financial strengths and weaknesses over a period of three years (2008 to 2010). The main

objective of this report is to advise potential investors whether or not David Jones Limited is a

worthy investment and the future profitability of the company.

This report evaluates the financial information of David Jones using Trend Analysis, Common-

size statements and investigates two competitors alongside David Jones, namely Myer and

Harvey Norman, to present a balanced overview. Also the report contains industry and market

information as well as stock market information, interest and exchange rate effects in order to

provide a better understanding of the company’s overall performance and stand in the consumer

retail goods sector, all factors which help predict future profitability and indirectly affect the

investment decision of a potential investor.

However, there are several limitations to this report, as outlined below.

The information used in this report as provided in the annual reports, is outdated. More

recent and detailed information will be needed to predict the future performance.

However, only a limited amount of information is available to external users.

Usually for large firms as explored in this report, the business and especially financial

risks can differ according to their financing structures.

The same ratios can be calculated using different formulas and this could lead to different

results.

Inflation, business and consumer confidence, impact of interest rates and exchange rates

will have different effects on different companies and will make comparisons difficult.

Changes in technology, innovation in the industry, the extent to which Research and

Development takes place in the industry is a significant factor especially in the electronics

and technology market that these firms operate in and their effects could vary by each

product group for each company.

The changing economical and commercial environments, different government laws and

legislations and tax policies affect the performance of the companies operating in the

international markets.

The use of different accounting policies and adoption of new accounting standards will

affect the overall results of the company.



Although the companies discussed in this report belong to the same industry their

diversity of products as well as differences in management policies, stock control, credit

control etc. could make the companies seem very dissimilar.

Analysis of accounting information only identifies the symptoms, not causes, and thus is

of limited use.

3. Conclusion & Recommendation

Conclusion:

3.1 Using trend analysis and common-size methods in evaluation, it was found that David

Jones is performing very well in the retailing industry.

3.2 Ratio Analysis show that overall, David Jones is a very profitable company, uses its

resources efficiently compared to its competitors, and performs well in the market,

especially in terms of Earnings per share which shows how confident investors are in

its share performance in the future. The liquid position of the company is not that

strong as the company is highly geared although compared to others in the market,

and a total decrease in the net debt in 2009 indicates that the effects of this can be

tolerated.

3.3 The Stock Exchange performance against the consumer discretionary sector which

David Jones Limited operates in as a retailer shows that the company is performing

well compared to industry performance.

3.4 Industry statistics in which total turnover for household retail goods are compared

against David Jones shows that the company sales is steadily increasing and will

continue to do so.

3.5 Overall analysis of inflation, consumer confidence, interest and exchange rate trends

show that David Jones is performing well, and that there is potential for future

growth. Media discussions reinforces this notion indicating that David Jones will

remain if not increase its current profitability status.



Recommendation:

Careful evaluation and analysis of the information included in this report and other research

shows that David Jones is performing extremely well at present. Especially with expectations

for the further growth and share prices to increase, it is highly recommended that potential

investors should buy David Jones shares now.

4. Discussion

4.1 Trend Analysis

Trend Analysis is a method used to interpret data easily by analysing financial information

against a base year (2008) and over a period of time. In such a statement, analysing involves

comparing the same item. The trend analysis for David Jones’s Financial Statements allows easy

comparison against the base year figures (2008) to identify the movements of each item in 2009

and 2010. Appendix A lists the trend analysis for David Jones under 6.1.1, Appendix B lists the

trend analysis for Myer under 6.2.1 and Appendix C lists the trend analysis for Harvey Norman

under 6.3.1.

Sales have decreased by 2.1% compared to 2008 which is a slight decline, however the Cost of

Sales (Cost of Goods Sold) has also decreased, by 2.4%. Gross Profit has steadily increased from

94.7% to 98.3% from 2009 to 2010 based on 2008 figures.

Earnings Before Tax and Interest (EBIT) has increased by 17.1% in 2009 and has stayed constant

through to the next year. Net Profit for 2009 has increased by 6.3% and 15.6% in 2010 compared

to the Net Profit earned in 2008.

All these trends show that the company is growing at a healthy pace. David Jones seems to

remain profitable in the future as well, as this trend analysis based on 2008 figures show that even

with the global recession in 2008 which affected most companies around the world, had not

effected the performance of David Jones. This is a strong indication that David Jones will

continue to perform well and that investors will be rewarded greatly.



4.2 Common Size Statements

Common size statements express each financial item as a percentage of one significant item

This enables easy comparison and to identify significant changes.

Table 7 and Table 9 in Appendix 6.1.2, indicates the common size Statement of

Comprehensive Income and Balance Sheet for David Jones, for three years from 2008 to

2009. These figures are expressed in percentages, in relative terms, against Sales and Total

Assets (Income Statement and Balance Sheet respectively).

Table 7 shows that COGS has remained consistent with the sales, which indicates that David

Jones is maintaining its gross profit margin at a consistent level. All expenses have remained

stable over the period of three years in consideration, with a slight decrease in Sales and

Marketing Costs and Finance Costs. An increase in EBIT and an overall increase in Net profit

for the year show that David Jones is performing extremely well, and is a strong indication of

its growth and future profitability.

The Common Size Balance Sheet produced for David Jones (Table 9) show that current

assets and current liabilities are decreasing to 27% and 26% respectively, in 2010. This shows

that David Jones has stable working capital conditions as it indicates that the company can

successfully finance its day-to-day operations in the short run.

Another significant observation is that David Jones hardly has any short term borrowings but

records a decrease in the use of long term borrowings. This reduces the financial risks

associated with the company. However, this might restrict growth in the long run as David

Jones is not taking advantage of its strong presence as a stable retailer in the market. But

since David Jones still performs well independent of the need for such measures is an

indication how confident the company is in its future performance.

Net Assets of the company is steadily increasing which is also a good indication, as it shows

that the company has more capacity for expansion and to continue being profitable and

efficient.



An increase in retained earnings during the period of three years has resulted in the total

equity of the company to increase, which will enable David Jones to invest more in its

operations and increase its profitability and overall performance.

4.3 Ratio Analysis

Note: All ratios used in tables below are calculated using the information provided in the

2010 company annual reports. A full summary of ratios for all three companies for 2008,

2009 and 2010 (including half yearly reports of 2010 & 2011) can be found in Appendix 6.1.3

(David Jones), Appendix 6.2.3 (Myer) and Appendix 6.3.3 (Harvey Norman).

4.3.1 Profitability Ratios

These ratios assess a company’s ability to generate profit. If these ratios are stable or higher than

the previous period, higher relative to a competitor’s ratio, or similar to industry ratios, it

indicates that the company is performing well.

1. Rate of return on Assets (ROA)

This ratio measures the ‘operating profitability’ or the firm’s ability to generate earnings without

being dependent on external financing options of the company.

2010 Annual Report

David Jones 21.46%

Myer 13.72%

Harvey Norman 11.41%

David Jones seems to be performing quite adequately compared to its competitors, earning

$21.46 of earnings for every $100 worth of average total assets utilized. Further investigation

shows that figures for David Jones is steadily increasing from 13.46% (2008) to 18.76% (2009).

This is an indication that David Jones is growing steadily and will continue to do so in the

coming years.



Myer and Harvey Norman both record drastic drops in ROA further emphasizing David Jones's

strong performance and consistent growth indicating higher profitability in the future.

2. Net Profit Margin Ratio

Net profit ratio shows how well a company controls its overheads and expenses in terms of how

much net profit is made for a sale worth $100.

2010 Annual Report

David Jones 8.32%

Myer 2.02%


Analysing the trend for the full years David Jones seems to be experiencing an increase in net

profit margin (up from 7.88% in 2009), which is repeated in the (first) half yearly trends with net

profit margin increasing from 9.25% to 9.76% in 2011 and 2010 respectively, which is a positive

sign.

But by observing the above results, it can be seen that Harvey Norman has a much higher value

compared to both David Jones and Myer. This could be due the fact that Harvey Norman

specialises in Manchester and other goods that does not relate to the business David Jones does.

David Jones however does have a greater Net profit margin ratio compared to Myer.

3. Gross Profit Margin Ratio (GP Ratio)

Gross profit ratio is a measure of how well a firm is utilizing its capital, capacity and other

resources in its production process. As a percentage it shows how much of gross profit is earned

for every $100 worth of sales.

2010 Annual Report

David Jones 39.73%

Myer 39.64%




David Jones has maintained a stable GP Ratio at 39% over the 3 years examined in this report. Its

GP ratio is greater compared to Myer and Harvey Norman. Furthermore, from the examination of

the half yearly report from 2011 for David Jones, the GP ratio has slightly declined to 39.68%.

This indicates that David Jones is performing well compared to its competitors. However, it

should be taken in to account that David Jones only operates in a limited market compared to

Harvey Norman.

Expenses as a percentage of sales

4. Sales and Marketing Expenses as a percentage of Sales

This ratio measures the sales and marketing expenses against sales.

2010 Annual Report

David Jones 1.97%

Myer 21.96%


David Jones spends only 1.97% in sales and marketing (out of 100% sales) which has decreased

from 2.29% in 2009. This reduces the overall costs to the company thus improving profitability;

however, a fall in expense such as marketing might result in lower sales in the years to come. It

could reduce the competitiveness too, as trends show that Myer and Harvey Norman increasing

its marketing expenses to promote more products, awareness and ultimately, more sales.

5. Administrative expenses as a percentage of Sales

2010 Annual Report

David Jones 0.99%

Myer 9.55%


This ratio shows the expenses a company incurs in controlling and directing the company and

usually includes salaries and costs of day-to-day office operations that cannot be directly

identified with the company’s main operations. David Jones only spends $0.99 per $100 worth of



sales on administrative expenses (which has been decreasing from 2008) whereas its competitors

spend comparatively greater amounts.

6. Net finance costs as a percentage of Sales

2010 Annual Report

David Jones 0.34%

Myer 1.34%

Harvey Norman 2.50%

Finance costs includes the total cost of borrowing, may it be interest charges for loans, bank

overdrafts, other forms of borrowing which require charges to be paid to the lender. David

Jones’s interest cost has decreased from 1.96% in 2008 to 0.34% in 2010. However this does not

mean that the finance costs or the level of borrowing has reduced, but indicates that although

finance costs have increased, sales have increased by a much larger proportion, reducing the

overall percentage of finance costs to sales.

7. Income tax expenses as a percentage of Sales

2010 Annual Report

David Jones 3.47%

Myer 1.95%


Income tax is an annual charge imposed on both earned and unearned income of a company.

David Jones spends 3.74% of its sales income on income tax charges whereas Harvey Norman

spends 11.04%. The income tax as a percentage of sales is steadily increasing for David Jones

indicating strong growth in sales and income.

8. Total Assets Turnover Ratio

This ratio is a measure to identify a firm’s efficiency to utilize its assets to generate sales. The

Higher the ratio, the more productive the assets are in generating sales revenue and thus resulting

in higher profitability of the firm.



2010 Annual Report

David Jones 1.77

Myer 1.69

Harvey Norman 0.37

This shows that David Jones earns $1.77 for $1 of average assets used in the company, which is

higher than the competitors. Also, the ratio has steadily increased from 1.33 (2008) to 1.49 (2009)

till 1.77 which is an indication that David Jones is efficiently using its assets to generate profit

and this could continue well into the future, ensuring profitability of the company.

9. Rate of return on shareholders’ Equity (ROE)

This ratio measures the shareholders’ profitability against the net profit of the firm. It indicates

how well utilized the shareholders’ equity is to generate profit for the firm.

2010 Annual Report

David Jones 23.86%

Myer 10.86%


David Jones is not performing well as its ROE has decreased from 26% to 23.95% from 2008 to

2009 and finally to 23.86% in 2010.

10. Cost of interest & finance charges

2010 Annual Report

David Jones 1.59%

Myer 3.28%

Harvey Norman 5.46%

Cost of interest & finance charges gives an indication of how much interest the company is

paying compared with its liabilities. David Jones had a very large Cost of interest & finance

charge of 4.05% in 2008, which decreased to 1.37% in 2009 and has increased slightly to 1.59%

in 2010. The larger the value the more likely Banks and other entities are to lend money.

However, this value is on average.



11. Basic Earnings Per Share (EPS)

This shows how much net profit a share is earning against the weighted average number of

ordinary shares issued.

2010 Annual Report

David Jones 34.0

Myer 12.3

Harvey Norman 21.78

David Jones is the best performing company against the two competitors evaluated, earning 34

cents of net profit per share. David Jones also indicates an increase in EPS over the years with

$0.31 in 2008 and $0.32 in 2009.

4.3.2 Efficiency Ratios

Efficiency ratios show how effectively a firm’s resources are being used.

12. Accounts receivable turnover

This ratio shows the relationship between total sales and the average trade accounts receivable

(i.e. trade debtors). It gives an indication of the effectiveness of a firm’s credit policy.

2010 Annual Report

David Jones 0

Myer 226.57

Harvey Norman 1.25

Note that David Jones sold its trade accounts receivable to American express, which resulted with

zero accounts receivable in 2009 and 2010. In 2008 however, David Jones had an accounts

receivable of 5.36



13. Average days of sales uncollected

This ratio shows how long it takes average debtors to settle their due amounts to the company.

These results could be affected by different payment policies each competitor uses.

2010 Annual Report

David Jones 0

Myer 1.61

Harvey Norman 292.95

The Accounts receivable turnover and Average Days sales uncollected ratios show that David

Jones collects its debts usually within 0 days, vanished from 68.07 days in 2008. This shows that

the joining of American express was a large success.

Harvey Norman sells more expensive goods such as furniture, therefore their payment methods

would differ which could be the reason for such a difference produced in calculations. At JB Hi-

Fi customers could pay cash up front or through credit cards which takes only a few days to

realize, whereas for Harvey Norman which offer 0% interest free instalment schemes over a

period of 24 months could result in the days average sales to be collected much higher.

14. Inventory turnover

This ratio shows the number of times a business sells the value of its stocks. The higher the result

the more effective the company is in selling and replenishing inventories and also resulting in low

risk of loss that might occur due to outdated inventories.

2010 Annual Report

David Jones 4.69

Myer 4.72

Harvey Norman 3.71



15. Inventory turnover in days

This ratio shows the number of days it takes a firm to sell its stocks.

2010 Annual Report

David Jones 77.76

Myer 77.32

Harvey Norman 98.30

The inventory turnover and inventory turnover in days for the three years from 2008 for David

Jones maintained consistent values over the three years. Harvey Norman record lower turnover

ratios and thus higher inventory turnover in days it could emphasize that David Jones is

performing better as it gets to stock the latest products which would result in further increase in

sales as demand increases for more recent inventions in electronics.

However, it should be taken into account that the competitors engage in a much wider market

selling more expensive goods such as furniture and white goods therefore stocks cannot be

expected to be replaced often.

16. Accounts payable turnover

This ratio shows how soon a company can pay its creditors. A change would indicate whether

the payments to creditors have become quicker or slower depending the credit terms granted

to the firms is strict or lenient.

2010 Annual Report

David Jones 10.11

Myer 7.59

Harvey Norman 1.31



17. Average days of accounts payable

Average days of accounts payable ratio measure the number of days it takes a firm to settle its debt

to creditors.

2010 Annual Report

David Jones 36.09

Myer 48.06

Harvey Norman 278.28

The results show that David Jones has a higher Accounts payable turnover, which results in a

lower number of days to pay back its creditors. Harvey Norman record a higher creditor’s

collection days, which does not mean that David Jones is at a disadvantage as it takes less time to

pay its creditors; rather, this ratio reflects the differences in the market these companies operate

in. It is understandable that a longer credit period is granted for Harvey Norman which sells more

expensive white goods and thus takes longer to recover its income (especially when using

instalment schemes).

However careful consideration must be placed on whether the ‘average days of sales uncollected’

exceed the ‘average days of accounts payable’ as only then will it make sense to compare and

contrast different firms’ ability to recover and settle accounts in a realistic manner.

4.3.3 Liquidity Ratios

SHORT TERM

These ratios help assess a firm’s ability to settle its short term liabilities by measuring how

easily and quickly it can liquidate its current assets.



18. Current ratio

This ratio gives an indication of a firm’s ability to payback its shorts term debts using its current

assets. The higher the ratio, the more liquid the company is. An ideal result would be 2:1 where

the current assets can settle its short term debts twice.

2010 Annual Report

David Jones 1.05

Myer 0.87

Harvey Norman 1.62

David Jones records a rise in current ratio from 0.97 in 2009 to 1.05 in 2010, which is a good

indication of the company’s illiquidity. Especially comparing to Harvey Norman, which records

an increasing trend, David Jones needs to improve its current ratio.

Effective management of creditors will help David Jones to plan its debt control in a way that

maximizes the benefits of a longer pay back period. Measures such as sale of redundant assets,

taking long term loans, share issues will help David Jones in improving its cash flow and

increasing liquidity.

19. Quick ratio

This ratio calculates the liquidity of the firm using current assets less inventory to find out the

immediate ability of the firm to settle its short term debts. This ratio needs to be at least 1 in

order to meet expectations of creditors and to ensure that the company’s current debts can be

met immediately should the need arise.

2010 Annual Report

David Jones 0.15

Myer 0.23

Harvey Norman 1.35



Calculations show that David Jones and Myer cannot meet its current liabilities using its liquid

assets, and David Jones records the lowest result out of the three companies. The main reason for

this is that the majority of current assets of David Jones consist of inventories which is steadily

increasing, and thus comparatively minimizing the liquid assets available. Measures such as a

better inventory control system and less use of current liabilities and a move on to long term

liabilities will help solve the cash flow issues in the long run.

20. Cash flow from operations to current liabilities ratio ($)

2010 Annual Report

David Jones 0.65

Myer 0.43

Harvey Norman 0.40

This ratio shows the company’s short term debt paying ability based on operating cash flows.

Among the competitor’s David Jones seems to be doing the best as it generates 65c of cash to pay

off $1 worth of current liabilities.

LONG TERM

21. Debt to equity ratio

This ratio assesses the relationship between debt and equity financing of a firm. The higher the

result, which shows the number of times the company is funded using debt finance compared to

equity finance, the more riskier investing in such a company is, especially as the company is

more sensitive to interest rate changes and other external market conditions that affect such

changes the rate of interest.

2010 Annual Report

David Jones 0.61

Myer 1.28

Harvey Norman 0.72

David Jones is financed 0.61 times more through debt compared to equity finance. Although the

trend is decreasing from 1.47 times in 2008, it still means that the company is still majorly

financed through debt (such as borrowings, long term loans and debentures). Therefore it is more



sensitive to interest charges and will affect the company’s ability to pay dividends (through

changes in profits after settling finance costs). However, if the decreasing trend continues, the

situation would turn more favourable for David Jones as it becomes less dependent on debt

financing.

22. Debt to total assets ratio

This ratio calculates the proportion a company’s total assets are financed through liabilities. If the

ratio is less than one, it means that the majority of the company’s assets are financed through

equity, however if it is greater than one, most of it is financed through debt.

2010 Annual Report

David Jones 37.72%

Myer 56.12%


The ratios show that David Jones and its competitors’ assets are mostly financed by equity,

therefore is less prone to financial risks. Trends show that the ratio for David Jones is actually

decreasing over the three years in consideration, which is a positive sign, as it becomes less risky

ensuring stability in returns for its investors in the long run.

23. Leverage ratio

Leverage is the amount of debt used to finance a company. This ratio shows to which degree the

company is using its debt. The higher the ratio, the greater the use of borrowings, and also the

more risk borne by the company.

2010 Annual Report

David Jones 1.61

Myer 2.28

Harvey Norman 1.72

David Jones records the lowest ratio compared to Myer and Harvey Norman. Since the overall

trend of David Jones over the three years show that the leverage ratio is decreasing, the risk is

minimal as it also is a strong performer in the industry relative to its competitors, in other aspects

such as profitability and efficiency.



24. Cash flow from operations to total liabilities ratio

2010 Annual Report

David Jones 0.45

Myer 0.22

Harvey Norman 0.25

Cash flow from operation to total liabilities shows the ability of a firm to settle all its debts using

operating cash flows. Compared to competitors, David Jones seems to be performing well and

shows an increasing trend over the years up from $0.22 in 2008, however it can only contribute

45 cents of cash to settle $1 of total liabilities.

25. Interest and finance coverage ratio

This shows the number of times a firm’s interest charges and other finance costs can be paid

through Earnings Before Interest and Tax (EBIT). The lower the result, the greater the pressure

on firms to settle its finance costs without resulting in any negative consequences from the

lenders.

2010 Annual Report

David Jones 35.28

Myer 6.10

Harvey Norman 4.90

David Jones seems to beat its competitors in this ratio, which indicates that it can easily afford to

settle its finance charges (35.28 times using EBIT). The interest cover has increased from 5.17

times to 26.96 times from 2008 to 2009 till 35.28 times in 2010. However, although this is a

positive result, it shows that the company can afford to borrow more to fuel growth and increase

long run profitability.



4.3.4 Market Based Ratios

1. Price/ Earnings ratio (P/E Ratio)

This ratio shows the amount the market will pay for $1 of profit. That is, it shows how expensive

r highly valued a share is. High P/E ratios indicate higher risks as it implies greater market

expectations.

David Jones 13.2

Myer 11.4

Harvey Norman 11.3

David Jones records the highest P/E ratio as it indicates that the company shares are highly

valued in the stock market, that is, investors are prepared to pay $13.2 to earn $1 of profit

of David Jones. This is an indication that the investors are confident and have high

expectations for it to perform well and profits to increase further in the future. Competitors

of David Jones are not performing as well comparatively, which is also an indication that the

investors anticipate more growth in David Jones compared to its competitors in this market.

1. Earning yield

Earnings yield shows how much a share is earning based on the current market price of the

company.

David Jones 7.58%

Myer 8.77%

Harvey Norman 8.85%

JB Hi-Fi, compared to Myer and Harvey Norman earns less; however, with high expectation for

the company to grow in the future as indicated by the high P/E ratio this will not be a significant

factor as it already is earning 7.58% which is considered favourable.



1. Dividend yield

This ratio shows the yield a company pays out its shareholders in the form of dividends. The

higher the dividend yield the better, however this also depends on whether a company is well

established or not, or whether a company decides to pay out a dividend in the year or not.

David Jones 6.9%

Myer 7.0%

Harvey Norman 5.1%

David Jones seems to reward a slightly lower dividend yield to its shareholders, but this figure

tend to increase or decrease over time.

4.4 Market Information and Industry Statistics

4.4.1 Stock Exchange Performance

The Australian Stock Exchange (ASX) has listed David Jones as one of the top 100 stocks ranked

by market capitalisation, which indicates the company’s strong presence in the retailing sector

and investor confidence.

The following chart compares David Jones’s performance against the consumer discretionary

index (where companies operating in the general consumer retailing sector belongs to, along with

other companies involved in media and

gambling).



David Jones seems to be doing fairly well compared to the whole sector especially since early

2009 however it has reached a peak in late 2009. The company is moving fairy constant from

2010 to present. The trend might pick up or remain stable from this point or even if it declines it

will still be performing considerably well compared to the total industry.

4.4.2 Industry Statistics

The retail turnover of department store statistics (Appendix 5) provided by the Australian Bureau

of Statistics (ABS) shows the total turnover in the market on a monthly basis. Figure 1 illustrates

that the total turnover for the industry usually peaks in November however, sharply declines over

the period of November to March and picks up again and follows a cycle.

Figure 1: Total Turnover: Household goods retailing

4.4.3 Inflation & Consumer Confidence

The Consumer Price Index (Reserve Bank of Australia- RBA) shows that the overall expected

price change (inflation) for goods sector has steadily inclined from 1.4% to 1.7% from March

2010 to March 2011 which means that even though the prices for goods are expected to rise, it

will rise at a slightly faster pace at 1.7% than at 1.4%. This will not be favourable to David Jones

as their prices will not rise as much, but because it is a very slight increase, it will ensure steady

sales.

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

Jul-

20

07

Sep

-20

07

No

v-2

00

7

Jan

-20

08

Mar

-20

08

May

-20

08

Jul-

20

08

Sep

-20

08

No

v-2

00

8

Jan

-20

09

Mar

-20

09

May

-20

09

Jul-

20

09

Sep

-20

09

No

v-2

00

9

Jan

-20

10

Mar

-20

10

May

-20

10

$ M

ilio

ns

Turnover: Total Department stores



However, a media release by the Wespac Institutional Bank on 13th April 2011 suggests that the

Australian consumer confidence has declined rose by 1.2% in April 2011 compared to March

2011. This is however, a much insignificant result as the consumer sentiment index (which

measures the consumer confidence in Australia) still remains near at a three-year high. Also, the

release suggests that the consumer confidence to buy a ‘major household item’ rose by 3.5%.

These results will be advantageous to David Jones as they imply that with time there are

expectations for sales, especially for household retail goods. This implies that anticipated growth

in the industry in the near future is very likely.

4.4.4 Interest Rates

The Reserve Bank of Australia (RBA) has been steadily increasing the interest rate since April

2009. This is significant to David Jones as it has borrowings, long term loans and other hedging

agreements which depend on the interest rates. The changes in the interest rate will not affect the

borrowing taken against fixed interest charges; however, for those on variable interest charges

will be affected.

However, David Jones's net debt remains at a conservative level at $86.4m, reduced from $88m

in 2009 which was at $446m in 2008 (Annual Report 2010 and 2009) However, the company has

a total interest bearing liabilities of $104m. Therefore an increase in interest rates could have a

great impact on the company, especially if the majority of this debt is charged at a variable

interest rate.

4.4.5 Exchange Rates

Although David Jones only operates in Australia, it is important to study exchange rates

behaviour, especially as its competitor Harvey Norman operates in the New Zealand,

Slovenia and Ireland. Statistics from the RBA, comparing the Australian dollar against the

New Zealand dollar is summarized in the graph below (figure 6). The New Zealand dollar

rate against the Australian dollar seems to be quite unpredictable over the months (Jan

2010- May-2011). This could lead to continuous changes in conversion to Australian dollars

for Harvey Norman which could generate losses when the rate is high, which in turn will

improve profits of David Jones. However, profits for David Jones would decline if the rate

decreases.



Figure 2: The NZ $ against AUS $

4.5 Media Comments and Public Opinions

David Jones has been short listed for the People’s CHOICE Awards (CHOICE, March 2011) for

the Best Retailer. The Award criteria are based on Customer service, Value for money, Product

knowledge and After-sales service which again indicates the notable acceptance from the

consumers.

An article in The Australian recently reported that David Jones has decided to reopen its online

sales website, after closing it in 2004 due to lost profits. David Jones believes that it will be able

to make profit by this action for reasons such as increased internet security and the increased

value of the Australian dollar.

These factors emphasize that David Jones is an outstanding company which will continue to

grow, remain profitable and promising positive returns on investment.

1.1000

1.1500

1.2000

1.2500

1.3000

1.3500

1.40000

4-J

an-2

01

0

04

-Feb

-20

10

04

-Mar

-20

10

04

-Ap

r-2

01

0

04

-May

-20

10

04

-Ju

n-2

01

0

04

-Ju

l-2

01

0

04

-Au

g-2

01

0

04

-Sep

-20

10

04

-Oct

-20

10

04

-No

v-2

01

0

04

-Dec

-20

10

04

-Jan

-20

11

04

-Feb

-20

11

04

-Mar

-20

11

04

-Ap

r-2

01

1

04

-May

-20

11

AU

S $

NZ $



5. References

1. Back, D. (27 April 2010). ‘Analysis and Interpretation of Financial Statements’,

Lecture Notes, Business Reporting & Analysis, Australian National University,

Canberra.

2. Bazley, M. and Hancock, P (2010), Contemporary Accounting, Seventh Edition,

Cengage Learning Australia Pty Ltd, Melbourne.

3. Emerson, L. (2009), Writing guidelines for business students, Fourth Edition, Cengage

Learning Australia Pty Ltd, Melbourne.

4. David Jones Limited (2011) Annual and Half yearly reports (2008, 2009, 2010)

retrieved May 1, 2010 from http://www.davidjones.com.au/

5. Myer Holding Limited (2011) Annual and half yearly reports (2008, 2009, 100)

retrieved May 1, 2010 http://www.myer.com.au/

6. Harvey Norman Holding Limited (2004) Annual and Half yearly reports (2008, 2009,

2010) retrieved May 1, 2010 from http://www.harveynormanholdings.com.au/

7. Wikipedia (2011) David jones logo, viewed 08/05/2011

http://upload.wikimedia.org/wikipedia/en/3/3e/DavidJoneslogo.svg

8. Wikipedia (2011) Myer logo, viewed 08/05/2011

http://upload.wikimedia.org/wikipedia/en/e/e8/Myer.svg

9. Wikipedia (2011) Harvey Norman logo, viewed 08/05/2011

http://upload.wikimedia.org/wikipedia/en/8/83/Harvey-norman-brand.svg

10. Ninemsn (2011) Company description, David Jones, viewed 08/05/2011

http://finance.ninemsn.com.au/news-and-markets/company/?code=DJS

11. Ninemsn (2011) Company description, Myer, viewed 08/05/2011

http://finance.ninemsn.com.au/news-and-markets/company/?code=MYR

12. Ninemsn (2011) Company description, Harvey Norman, viewed 08/05/2011

http://finance.ninemsn.com.au/news-and-markets/company/?code=HVN

13. ASX (2011) Graph of stock exchange, viewed 08/05/2011

http://hfgapps.hubb.com/asxtools/Charts.aspx?asxCode=DJS&compare=comp_index

&indicies=XJO&compareCode=MYR&chartType=3&pma1=0&pma2=0&volumeInd

=2&vma=0&TimeFrame=M3

http://www.davidjones.com.au/

http://www.myer.com.au/

http://www.harveynormanholdings.com.au/

http://upload.wikimedia.org/wikipedia/en/3/3e/DavidJoneslogo.svg

http://upload.wikimedia.org/wikipedia/en/e/e8/Myer.svg

http://upload.wikimedia.org/wikipedia/en/8/83/Harvey-norman-brand.svg

http://finance.ninemsn.com.au/news-and-markets/company/?code=DJS

http://finance.ninemsn.com.au/news-and-markets/company/?code=MYR

http://finance.ninemsn.com.au/news-and-markets/company/?code=HVN

http://hfgapps.hubb.com/asxtools/Charts.aspx?asxCode=DJS&compare=comp_index&indicies=XJO&compareCode=MYR&chartType=3&pma1=0&pma2=0&volumeInd=2&vma=0&TimeFrame=M3





14. ASX (2011) Rank of Retailers, viewed 08/05/2011

http://www.asx.com.au/documents/research/consumer_sector_factsheet.pdf

15. Reserve Bank of Australia (2010). Inflation Rates. retrieved 08/05/2011

http://www.rba.gov.au/statistics/cash-rate.html

16. RBA (2011) consumer price index, retrieved 08/05/2011

http://www.rba.gov.au/inflation/measures-cpi.html

17. Westpac institutional Bank (2010), Media Release: ‘Consumer Sentiment Resilient to

rate hike’, Melbourne Institute, Faculty of Business and Economics, retrieved on 8

May 2010 from

http://melbourneinstitute.com/downloads/media_release/2011%20Consumer%20Senti

ment%20Report/PressReleaseCSI20110413.pdf

18. RBA (2011) exchange rate data, retrieved on 8 May 2010 from

http://www.rba.gov.au/statistics/hist-exchange-rates/index.html

19. Dailytelegraph (2011) choice award, retrieved on 8 May 2010 from

http://www.dailytelegraph.com.au/money/money-matters/aussies-vote-on-nations-

best-retailer/story-fn300aev-1226030039571

20. The Australian (2011) Retailers finally click to the online boom, retrieved on 8 May

2010 from http://www.theaustralian.com.au/business/retailers-finally-click-to-the-

online-boom/story-e6frg8zx-1226051436382

http://www.asx.com.au/documents/research/consumer_sector_factsheet.pdf

http://www.rba.gov.au/statistics/cash-rate.html

http://www.rba.gov.au/inflation/measures-cpi.html

http://melbourneinstitute.com/downloads/media_release/2011%20Consumer%20Sentiment%20Report/PressReleaseCSI20110413.pdf

http://melbourneinstitute.com/downloads/media_release/2011%20Consumer%20Sentiment%20Report/PressReleaseCSI20110413.pdf

http://www.rba.gov.au/statistics/hist-exchange-rates/index.html

http://www.dailytelegraph.com.au/money/money-matters/aussies-vote-on-nations-best-retailer/story-fn300aev-1226030039571

http://www.dailytelegraph.com.au/money/money-matters/aussies-vote-on-nations-best-retailer/story-fn300aev-1226030039571

http://www.theaustralian.com.au/business/retailers-finally-click-to-the-online-boom/story-e6frg8zx-1226051436382

http://www.theaustralian.com.au/business/retailers-finally-click-to-the-online-boom/story-e6frg8zx-1226051436382



6. Appendices

6.1 Appendix A: David Jones

6.1.1 Trend Analysis

Table 1: Trend analysis for Comprehensive Income Statements, Full year

Trend Analysis - Comprehensive Income Statements, Full year (%)

2010 2009 2008

Sales revenue 97.9 94.6 100.0

Cost Of Sales 97.6 94.6 100.0

Gross Profit 98.3 94.7 100.0

Other income 48.0 60.0 100.0

Employee benefits expenses 91.1 97.5 100.0

Lease and occupancy expenses 106.4 91.6 100.0

Depreciation and amortisation expanses 105.5 105.9 100.0

Advertising, marketing and visual merchandising expenses

74.3 83.6 100.0

Administration expenses 59.9 59.9 100.0

Net financing expenses 17.2 22.4 100.0

Other expenses 40.3 49.0 100.0

Profit before income tax expense 115.5 103.7 100.0

Earnings Before Interest & Tax (EBIT) 117.1 117.1 100.0

Income tax expense 114.3 97.7 100.0

Net profit for the period 115.9 106.3 100.0

Other comprehensive income

Gain/(Losses) on cash flow hedges 58.0 -23.0 100.0

Transfer of realised gains on hedges to profit and loss

-33.4 -39.7 100.0

Income tax on items of other comprehensive income

37.3 132.0 100.0

Total other comprehensive loss for the period, net of tax

-26.2 -122.4 100.0

Total comprehensive income for the period

113.2 103.1 100.0

Basic earnings per share (cents per share) 111.1 102.9 100.0

Diluted earnings per share (cents per share)

110.0 101.0 100.0



Table 2: Trend analysis for Comprehensive Income Statements, Half year

Trend Analysis - Comprehensive Income Statements, Half year (%)

29/01/2011 23/01/2010

Sales revenue 100.2 100.0

Cost Of Sales 99.7 100.0

Gross Profit 101.1 100.0

Other income 91.8 100.0

Employee benefits expenses 107.0 100.0

Lease and occupancy expenses 99.9 100.0

Depreciation and amortisation expanses 82.0 100.0

Advertising, marketing and visual merchandising expenses 132.9 100.0

Administration expenses 65.9 100.0

Net financing expenses 88.0 100.0

Other expenses 105.7 100.0

Profit before income tax expense 95.6 100.0

Earnigns Before Interest & Tax (EBIT) 95.5 100.0

Income tax expense 96.8 100.0

Net profit for the period 95.0 100.0


Gain/(Losses) on cash flow hedges 73.3 100.0

Transfer of realised gains on hedges to prfit and loss 64.2 100.0

Income tax on items of other comprehensive income 1050.0 100.0

Total other comprehensive loss for the period, net of tax 833.3 100.0

Total comprehensive income for the period 95.1 100.0

Basic earnigns per share (cents per share) 96.2 100.0

Diluted earnings per share (cents per share) 94.6 100.0

Table 3: Trend analysis for Consolidated Balance Sheet, Full year

Trend Analysis - Consolidated Balance Sheet, Full year (%)

2010 2009 2008

Current assets

Cash and cash equivalents 378.33

488.90

100.00

Receivables 1,824.09

1,599.65

100.00

Inventories



91.13 105.08 100.00

Financial assets 5,028.57

90.96

100.00

Other assets 144.41

88.23

100.00

Total current assets 227.78

254.20

100.00

Non-current assets

Financial assets 6,650.00

6,650.00

100.00

Property, plant and equipment 88.07

92.63

100.00

Ingangible assets 101.46

96.64

100.00

Deferred tax assets 107.92

106.21

100.00

Other assets 8.82

2.57

100.00

Total non-current assets 90.25

93.89

100.00

Total assets 128.01

135.70

100.00

Current liabilities

Payables 112.30

112.50

100.00

Interest bearing liabilities 8,229.54

12,960.43

100.00

Current tax liablities 100.17

686.68

100.00

Provisions 133.23

103.23

100.00

Financial liabilities 52.47

43.70

100.00

Other liabilities 1,433.12

1,590.63

100.00

Total current liabilities 192.64

198.38

100.00

Non-current liabilities

Interest bearing liabilities 267.33

270.00

100.00

Provisions 111.48

115.29

100.00


Other liabilities 94.64

96.45

100.00

Total non-current liabilities 222.97

225.90

100.00



Total liabilities 201.88

206.86

100.00

Net assets 83.28

90.17

100.00

Equity

Contributed equity 90.67

95.04

100.00

Reserves 53.14

63.61

100.00

Retained earnings/(Accumulated losses)

73.58

84.57

100.00

Total equity 83.28

90.17

100.00

Table 4: Trend analysis for Consolidated Balance Sheet, Half year

Trend Analysis - Consolidated Balance Sheet, Half year (%)

29/01/2011 23/01/2010

Current assets

Cash and cash equivalents 83.39

100.00

Receivables 105.79

100.00

Inventories 94.30

100.00

Financial assets 33.33

100.00

Other assets 144.85

100.00

Total current assets 95.61

100.00

Non-current assets

Financial assets 100.00

100.00

Property, plant and equipment 94.57

100.00

Ingangible assets 106.85

100.00

Deferred tax assets 101.03

100.00

Other assets 261.51

100.00

Total non-current assets 95.62

100.00

Total assets 95.62

100.00

Current liabilities



Payables 106.44

100.00


100.00

Current tax liablities 77.59

100.00

Provisions 115.35

100.00


100.00


100.00

Total current liabilities 106.30

100.00



100.00

Provisions 122.82

100.00

Financial liabilities


100.00

Total non-current liabilities 88.36

100.00

Total liabilities 100.82

100.00

Net assets 92.79

100.00

Equity

Contributed equity 95.85

100.00

Reserves 85.79

100.00


87.17

100.00

Total equity 92.79

100.00

Table 5: Trend analysis for Consolidated Statement of Cash flows, Full year

Trend Analysis - Consolidated Statement of Cash flows, Full year (%)

2010 2009 2008

CASH FLOWS FROM OPERATING ACTIVITIES

Reciepts from customers (inclusive of GST) 105.0 107.7 100.0

Paymentss to suppliers and employees (inclusive of GST) 103.5 107.1 100.0

Commissions received 0.0 0.0 -



Interest received 21256.3 5269.8 100.0

Borrowing costs paid 556.8 444.1 100.0

Income tax paid 144.8 101.3 100.0

Net cash flows from operating activities 99.0 105.4 100.0

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment 93.1 77.6 100.0

Payments for software 23.1 7.3 100.0

Proceeds from sale of property 7526.9 - 100.0

Net cash flows used in investing activities 39.7 31.9 100.0

CASH FLOWS FROM FINANCINF ACTIVITIES

Dividends paid on ordinary shares 72.3 79.5 100.0

Proceeds from the assignment of storecard and credit reserve receivables - 0.0 -

Repayments of receivables funding - 0.0 -

Proceeds from/repayment of borrowing -18000.0 105.9 100.0

On-market purchase of shares for Trust 0.0 0.0 -

Interest paid on RPS - - 100.0

Proceeds from loan repayments under employee share purchase plan 115.5 118.3 100.0

Net cash flows used in financing activities 219.6 182.6 100.0

Net increase/(decrease) in cash and cash equivalents -3309.4 179.8 100.0

Cash and cash equivalents at beginning of the period 1373.4 247.4 100.0

Cash and cash equivalents at end of the period 445.1 555.2 100.0

Table 6: Trend analysis for Consolidated Statement of Cash flows, Half year

Trend Analysis - Consolidated Statement of Cash flows, Half year (%)

29/01/2011 23/01/2010


Reciepts from customers (inclusive of GST) 100.2 100.0

Paymentss to suppliers and employees (inclusive of GST) 102.3 100.0

Commissions received 91.8 100.0

Interest received 42.6 100.0

Borrowing costs paid -91.1 100.0

Income tax paid 54.5 100.0

Net cash flows from operating activities 93.0 100.0


Payments for property, plant and equipment 79.3 100.0

Payments for software 735.5 100.0

Proceeds from sale of property - 100.0

Net cash flows used in investing activities 80.0 100.0


Dividends paid on ordinary shares 89.6 100.0



Proceeds from the assignment of storecard and credit reserve receivables - -

Repayments of receivables funding 287.5 100.0

Proceeds from/repayment of borrowing - -

On-market purchase of shares for Trust - -

Interest paid on RPS - -

Proceeds from loan repayments under employee share purchase plan 35.8 100.0

Net cash flows used in financing activities 108.5 100.0

Net increase/(decrease) in cash and cash equivalents -257.0 100.0

Cash and cash equivalents at beginning of the period 80.2 100.0

Cash and cash equivalents at end of the period 39.6 100.0

6.1.2 Common-size Statements

Table 7: Common-size statement for Comprehensive Income Statement, as a percentage of sales, Full year

Common-size statement - Comprehensive Income Statements as a percentage of Sales, Full year (%)

2010 2009 2008

Sales revenue 100 100 100

Cost Of Sales 60 60 60

Gross Profit 40 40 40

Other income 3 3 5

Employee benefits expenses 15 17 17

Lease and occupancy expenses 9 8 8

Depreciation and amortisation expanses 2 2 2

Advertising, marketing and visual merchandising expenses 2 2 3

Administration expenses 1 1 2

Net financing expenses 0 0 2

Other expenses 1 1 2

Profit before income tax expense 12 11 10

Earnigns Before Interest & Tax (EBIT) 12 13 10

Income tax expense 3 3 3

Net profit for the period 8 8 7


Gain/(Losses) on cash flow hedges 0 0 0

Transfer of realised gains on hedges to prfit and loss

0 0 0


0 0 0




0 0 0


8 8 7

Basic earnigns per share (cents per share) 0 0 0


0 0 0

Table 8: Common-size statement for Comprehensive Income Statement, as a percentage of sales, Half year

Common-size statement - Comprehensive Income Statements as a percentage of Sales, Half year (%)

29/01/2011 23/01/2010

Sales revenue 100 100

Cost Of Sales 60 60

Gross Profit 40 40

Other income 2 2

Employee benefits expenses 14 15

Lease and occupancy expenses 8 8

Depreciation and amortisation expanses 2 2

Advertising, marketing and visual merchandising expenses 2 2

Administration expenses 1 1

Net financing expenses 0 0

Other expenses 1 1

Profit before income tax expense 14 13

Earnigns Before Interest & Tax (EBIT) 14 14

Income tax expense 4 4

Net profit for the period 10 9


Gain/(Losses) on cash flow hedges 0 0

Transfer of realised gains on hedges to prfit and loss

0 0


0 0


0 0


10 9

Basic earnigns per share (cents per share)

0 0


0 0



Table 9: Common-size statement for Consolidated Balance sheet, as a percentage of total assets, Full year

Common-size statement - Consolidated Balance sheet as a percentage of Total assets, Full year (%)

2010 2009 2008

Current assets

Cash and cash equivalents 1

1

4

Receivables 2

2

27

Inventories 24

22

17

Financial assets 0

0

0

Other assets 0

1

1

Total current assets 27

26

49

Non-current assets

Financial assets 0

0

0

Property, plant and equipment 64

64

44

Ingangible assets 3

3

2

Deferred tax assets 6

6

5

Other assets 0

0

0

Total non-current assets 73

74

51

Total assets 100

100

100

Current liabilities

Payables 20

22

18

Interest bearing liabilities 0

0

16

Current tax liablities 2

0

2

Provisions 3

5

4

Financial liabilities 0

0

0

Other liabilities



0 0 1

Total current liabilities 26

27

39



9

18

Provisions 1

1

1

Financial liabilities -

-

0

Other liabilities 2

3

2

Total non-current liabilities 11

12

20

Total liabilities 38

39

59

Net assets 62

61

41

Equity

Contributed equity 42

43

30

Reserves 6

5

2


15

14

8

Total equity 62

61

41

Table 10: Common-size statement for Consolidated Balance sheet, as a percentage of Total

assets, Half year

Common-size statement - Consolidated Balance sheet as a percentage of Total assets, Half year (%)

29/01/2011 23/01/2010

Current assets


1

Receivables 2

3

Inventories 22

22

Financial assets 0

0

Other assets 0

1

Total current assets



26 26

Non-current assets

Financial assets 0

0


64

Ingangible assets 3

3


6

Other assets 0

0


74

Total assets 100

100

Current liabilities

Payables 18

20


1


2

Provisions 3

3

Financial liabilities 0

0

Other liabilities 0

0


27



7

Provisions 1

1

Financial liabilities - -

Other liabilities 2

3


10


37

Net assets 65

63

Equity


43



Reserves 6

5


16

14

Total equity 65

63

Table 11: Common-size statement for Consolidated Statement of Cash flows, as a percentage of

Receipts from customers, Full year

Common-size statement- Consolidated Statement of Cash flows as a percentage of receipts from customers, Full year (%)

2010 2009 2008


Reciepts from customers (inclusive of GST) 100 100 100

Paymentss to suppliers and employees (inclusive of GST) 91 90 89

Commissions received 2 2 -

Interest received 0 0 2

Borrowing costs paid 0 0 2

Income tax paid 2 3 3

Net cash flows from operating activities 9 9 8


Payments for property, plant and equipment 3 4 3

Payments for software 0 0 0

Proceeds from sale of property 0 - 2

Net cash flows used in investing activities 4 4 1


Dividends paid on ordinary shares 5 5 4

Proceeds from the assignment of storecard and credit reserve receivables - 17 -

Repayments of receivables funding - 11 -

Proceeds from/repayment of borrowing 0 8 8

On-market purchase of shares for Trust 0 0 -

Interest paid on RPS - - 0

Proceeds from loan repayments under employee share purchase plan 0 0 0

Net cash flows used in financing activities 5 7 11

Net increase/(decrease) in cash and cash equivalents 0 2 4

Cash and cash equivalents at beginning of the period 1 3 7

Cash and cash equivalents at end of the period 1 1 3


Receipts from customers, Half year




29/01/2011 23/01/2010


Reciepts from customers (inclusive of GST) 100 100

Paymentss to suppliers and employees (inclusive of GST) 88 90

Commissions received 2 2

Interest received 0 0

Borrowing costs paid 0 0

Income tax paid 3 1

Net cash flows from operating activities 11 10


Payments for property, plant and equipment 4 3

Payments for software 0 0

Proceeds from sale of property - 0

Net cash flows used in investing activities 4 3


Dividends paid on ordinary shares 6 6

Proceeds from the assignment of storecard and credit reserve receivables - -

Repayments of receivables funding 1 2

Proceeds from/repayment of borrowing - -

On-market purchase of shares for Trust - -

Interest paid on RPS - -

Proceeds from loan repayments under employee share purchase plan 0 0

Net cash flows used in financing activities 7 8

Net increase/(decrease) in cash and cash equivalents 0 0

Cash and cash equivalents at beginning of the period 1 1

Cash and cash equivalents at end of the period 1 1

6.1.3 Ratio Analysis

Table 13: Ratio analysis for full year

2010 2009 2008

PROFITABILITY RATIOS

Rate of return on assets (ROA) = EBIT/ average total assets 21.46% 18.76% 13.46%

Net Profit margin = Net profit/sales 8.32% 7.88% 7.02%

Gross Profit margin = gross profit/sales 39.73% 39.59% 39.55%



Expenses as a percentage of sales = Expenses/Sales

Employee benefits expenses as a percentage of sales 15.41% 17.07% 16.56%

Lease and occupancy expenses as a percentage of sales 8.85% 7.88% 8.15%

Depreciation and amortisation expenses as a percentage of sales 2.13% 2.22% 1.98%

Advertising, marketing and visual merchandising expenses as a percentage of sales 1.97% 2.29% 2.59%

Administration expenses as a percentage of sales 0.99% 1.03% 1.62%

Net financing expenses as a percentage of sales 0.34% 0.47% 1.96%

Other expenses as a percentage of sales 0.75% 0.94% 1.82%

Income tax expense as a percentage of sales 3.47% 3.07% 2.97%

Total assets turnover ratio = sales/average total assets 1.77 1.49 1.33

Rate of return of shareholders' equity (ROE) = (net profit-preference dividends)/average ordinary shareholders' equity 23.86% 23.95% 26.00%

Cost of interest & finance charges = Interest and finance charge expenses/Average total liabilities 1.59% 1.37% 4.05%

Basic Earnings Per Share (EPS) in cents 34.0 31.5 30.6

EFFICIENCY RATIOS

Accounts recievable turnover = sales/ average trade accounts recievable 0 0 5.36

Average days of sales uncollected = days in year/ accounts recievabe turnover 0 0 68.07

Inventory turnover = COGS/average inventory 4.69 4.78 4.72

Inventory turnover in days = days in the period/iventory turnover 77.76 76.41 77.36

Accounts payable turnover= Purchases/ Average trade accounts payable 10.11 8.78 8.57

Average days of accounts payable= days in the period/ accounts payable turnover

36.09 41.57 42.61



LIQUIDITY RATIOS

Short term

Current ratio= current assets/current liabilities 1.05 0.97 1.24

Quick ratio= (current assets- inventories)/current liabilities 0.15 0.16 0.81

cash flow from operations to current liabilities ratio = cash flow from operations/average current liabilities 0.65 0.63 0.33

LONG TERM

Debt to equity ratio= total libailities/total shareholders' equity 60.56% 63.99% 146.80%

Debt to total assets ratio = total liabilities/ total assets 37.72% 39.02% 59.48%

Leverage ratio = total assets/ total shareholders' equity 160.56% 163.99% 246.80%

Cash flow from operations to total liabilities ratio = cash flow from operations/average total liabilities($) 0.45 0.44 0.22

Interest and finance coverage= EBIT/Interest and finance expense 35.28 26.96 5.17

Table 14: Ratio analysis for half year

29/01/2011 23/01/2010


Rate of return on assets (ROA) = EBIT/ average total assets

35.84% 38.18%

Net Profit margin = Net profit/sales 9.76% 9.25%

Gross Profit margin = gross profit/sales 39.68% 40.00%


Employee benefits expenses as a percentage of sales

14.15% 15.10%

Lease and occupancy expenses as a percentage of sales

8.16% 8.13%

Depreciation and amortisation expenses as a percentage of sales

2.38% 1.95%



Advertising, marketing and visual merchandising expenses as a percentage of sales

1.71% 2.27%

Administration expenses as a percentage of sales

0.81% 0.53%

Net financing expenses as a percentage of sales

0.36% 0.31%

Other expenses as a percentage of sales 0.74% 0.78%

Income tax expense as a percentage of sales

4.10% 3.96%

Total assets turnover ratio = sales/average total assets

90.33% 95.45%

Rate of return of shareholders' equity (ROE) = (net profit-preference dividends)/average ordinary shareholders' equity

13.87% 14.26%

Cost of interest & finance charges = Interest and finance charge expenses/Average total liabilities

0.89% 0.79%

Basic Earnings Per Share (EPS) in cents 20.8 20.0

EFFICIENCY RATIOS

Accounts recievable turnover = sales/ average trade accounts recievable

0 0

Average days of sales uncollected = days in year/ accounts recievabe turnover

0 0

Inventory turnover = COGS/average inventory

2.39 2.64

Inventory turnover in days = days in the period/iventory turnover

75.62 68.54

Accounts payable turnover= Purchases/ Average trade accounts payable

0 0


0 0

LIQUIDITY RATIOS

Short term

Current ratio= current assets/current liabilities

1.07 0.96

Quick ratio= (current assets- inventories)/current liabilities

0.18 0.17

cash flow from operations to current liabilities ratio = cash flow from operations/average current liabilities

0.45 0.40



LONG TERM

Debt to equity ratio= total libailities/total shareholders' equity

54.31% 59.01%

Debt to total assets ratio = total liabilities/ total assets

35.20% 37.11%

Leverage ratio = total assets/ total shareholders' equity

154.31% 159.01%

Cash flow from operations to total liabilities ratio = cash flow from operations/average total liabilities($)

0.31 0.29

Interest and finance coverage= EBIT/Interest and finance expense

39.64 43.01

6.2 Appendix B: Financial reports of Myer




2010 2009 2008


Concession Sales 19 21 100

Sales of goods 102 103 100

Sales revenue deffered under customer loyalty program 84 94 100

Revenue from sale of goods 104 105 100

Other operating revenue 84 91 100

Cost of goods sold 105 105 100

Profit from sale of property and associated costs - - 100

Other income 91 105 100

Operating gross profit 97 104 100

Selling expences 108 109 100


EBIT before non-recurring IPO transaction costs 166 191 100

Finance revenue 608 304 100

Finance costs 213 108 100

Net finance costs 188 95 100

Profit before income tax before non-recurring IPO transaction costs 162 241 100




Profit for the period before non-recurring IPO transaction costs 0 0 -

Initial Public Offering transaction costs 0 - -

Profit for the period 505 312 100

Other comprehehnsive income Cash flow hedges 0 0 -

non-recurring IPO related transfers to profit and loss 0 - -

Actualrial gains/(losses) on retirement benefit obligation 976 58 100

Income tax relating to components of the other comprehensive income 0 0 -

Other comprehehnsive income for the period, net of tax 0 0 -

Total comprehensive income for the period 362 420 100

Basic earnings per share (cents per share) 0 0 -

Diluted earnings per share (cents per share) 0 0 -



29/01/2011 23/01/2010


Concession Sales 100 100

Sales of goods 104 100

Sales revenue deffered under customer loyalty program 110 100

Revenue from sale of goods 104 100

Other operating revenue 94 100

Cost of goods sold 104 100

Profit from sale of property and associated costs - -

Other income 76 100

Operating gross profit 101 100

Selling expences 100 100


EBIT before non-recurring IPO transaction costs 107 100

Finance revenue 130 100

Finance costs 138 100

Net finance costs 139 100

Profit before income tax before non-recurring IPO transaction costs 104 100


Profit for the period before non-recurring IPO transaction costs 105 100

Initial Public Offering transaction costs 4,427 100



Profit for the period 20 100

Other comprehehnsive income

Cash flow hedges 170 100

non-recurring IPO related transfers to profit and loss - 100

Actualrial gains/(losses) on retirement benefit obligation - -

Income tax relating to components of the other comprehensive income 989 100

Other comprehehnsive income for the period, net of tax 989 100

Total comprehensive income for the period 44 100

Basic earnings per share (cents per share) 22 100

Diluted earnings per share (cents per share) 23 100

Table 3: Trend analysis for Consolidated Balance Sheet, Full year

Trend Analysis - Consolidated Balance Sheet, Full year (%)

2010 2009 2008

Current assets


75

100

Trade and receivables 127

93

100

Inventories 98

97

100

Derivative financial instruments - - -

Non-current assets classified as held for sale - 100

100


90

100

Non-current assets

Other financial assets 154

121

100

Derivative financial instruments 1,680 -

100


79

100

Ingangible assets 97

99

100


105

100

Other assets 131

112

100


95

100

Total assets



95 93 100

Current liabilities

Trade and other payables 100

93

100

Derivative financial instruments 204

24

100


512

100

Provisions 105

103

100

Borrowings - - -

Other liabilities 48

80

100


99

100


Borrowings 208

99

100


Deferred tax liabilities - - -

Provisions 131

114

100

Deferred income 35

53

100

Other liabilities 85

27

100


96

100


97

100

Net assets 35

78

100

Equity


100

100

Reserves 22

23

100

Retained earnings/(Accumulated losses) 65

66

100

Total equity 35

78

100

Table 4: Trend analysis for Consolidated Balance Sheet, Half year

Trend Analysis - Consolidated Balance Sheet, Half year (%)

29/01/2011 23/01/2010



Current assets

Cash and cash equivalents 85 100

Trade and receivables 90 100

Inventories 93 100

Derivative financial instruments - -


Total current assets 98 100

Non-current assets

Other financial assets 107 100

Derivative financial instruments 178 100

Property, plant and equipment 74 100

Ingangible assets 101 100

Deferred tax assets 155 100

Other assets 109 100

Total non-current assets 94 100

Total assets 95 100

Current liabilities

Trade and other payables 91 100

Derivative financial instruments 95 100

Current tax liablities - -

Provisions 111 100

Borrowings - -

Other liabilities 75 100

Total current liabilities 91 100


Borrowings 99 100


Deferred tax liabilities - -

Provisions 113 100

Deferred income 65 100

Other liabilities 1,445 100

Total non-current liabilities 97 100

Total liabilities 94 100

Net assets 97 100

Equity

Contributed equity 100 100

Reserves 82 100

Retained earnings/(Accumulated losses) 93 100

Total equity 97 100

Table 5: Trend analysis for Consolidated Statement of Cash flows, Full year

Trend Analysis - Consolidated Statement of Cash flows, Full year (%)

2010 2009 2008






Other revenue 78 91 100

Interest paid 131 95 100

Tax paid 1,094 66 100



Payment for available for sale financial assets - - 100


Proceeds from sale of land and building - - 100

Capital gains tax paid on disposal of land and building - - 100

Payments for intangible assets 156 161 100

Payments for other assets - 11,520 100

Lease incentives receivable 32 35 100

Return of capital received from investment 0 0 -




Proceeds from borrowings 42 - 100

Repayment of borrowings 40 - 100

Repayment of Myer Notes 0 - -

Funding received from related party - - 100

Funding paid to related party - 339 100

Repayments of employee share loans 202 583 100

Funding of employee share loans - 0 -

Payment for shares acquired by the Myer Equity Plan Trust 0 - -

Proceeds from the issue of shares 0 77 100

Payment of capital return - - 100

Non-recurring finance costs associated with Initial Public Offering 0 - -

Payment of cost of Initial Public Offering 0 - -

Dividend paid 321 - 100

Net cash flows from financing activities 298 37,799 100

Net increase(decrease) in cash and cash equivalents 103 178 100



Table 6: Trend analysis for Consolidated Statement of Cash flows, Half year

Trend Analysis - Consolidated Statement of Cash flows, Half year (%)

29/01/2011 23/01/2010






Other revenue 79 100

Interest paid 244 100

Tax paid 139 100



Payment for available for sale financial assets -


Proceeds from sale of land and building - -

Capital gains tax paid on disposal of land and building - -

Payments for intangible assets 173 100

Payments for other assets -

Lease incentives receivable 261 100

Return of capital received from investment 301 100




Proceeds from borrowings - 100

Repayment of borrowings - 100

Repayment of Myer Notes - 100

Funding received from related party - -

Funding paid to related party - -

Repayments of employee share loans 654 100

Funding of employee share loans - -

Payment for shares acquired by the Myer Equity Plan Trust - -

Proceeds from the issue of shares 14,906 100

Payment of capital return - -

Non-recurring finance costs associated with Initial Public Offering - 100

Payment of cost of Initial Public Offering 1,966 100

Dividend paid 0 -

Net cash flows from financing activities 220 100

Net increase(decrease) in cash and cash equivalents 64 100








2010 2009 2008


Concession Sales 14 13 3

Sales of goods 86 87 97

Sales revenue deffered under customer loyalty program

1 1 1

Revenue from sale of goods 85 86 97

Other operating revenue 3 3 3

Cost of goods sold 50 51 57

Profit from sale of property and associated costs - - 8

Other income 2 2 2

Operating gross profit 40 38 42

Selling expences 22 22 26


EBIT before non-recurring IPO transaction costs 8 7 15

Finance revenue 0 0 1

Finance costs 1 3 3

Net finance costs 1 3 3

Profit before income tax before non-recurring IPO transaction costs

7 5 12


Profit for the period before non-recurring IPO transaction costs

5 3 -

Initial Public Offering transaction costs 3 - -

Profit for the period 2 3 11

Other comprehehnsive income 0 0 0

Cash flow hedges 0 1 -

non-recurring IPO related transfers to profit and loss 1 - -

Actualrial gains/(losses) on retirement benefit obligation

0 0 0

Income tax relating to components of the other comprehensive income

0 0 -

Other comprehehnsive income for the period, net of tax

1 1 -

Total comprehensive income for the period 3 2 11

Basic earnings per share (cents per share) 0 0 -

Diluted earnings per share (cents per share) 0 0 -

Table 8: Common-size statement for Comprehensive Income Statement, as a percentage of sales, Half year


29/01/2011 23/01/2010




Concession Sales 13 13

Sales of goods 87 87

Sales revenue deffered under customer loyalty program

1 2

Revenue from sale of goods 85 85

Other operating revenue 3 3

Cost of goods sold 50 50

Profit from sale of property and associated costs - -

Other income 2 2

Operating gross profit 41 40

Selling expences 21 21


EBIT before non-recurring IPO transaction costs 10 10

Finance revenue 0 0

Finance costs 1 1

Net finance costs 1 1

Profit before income tax before non-recurring IPO transaction costs

9 9


Profit for the period before non-recurring IPO transaction costs

6 6

Initial Public Offering transaction costs 0 5

Profit for the period 6 1

Other comprehehnsive income 0 0

Cash flow hedges 0 0

non-recurring IPO related transfers to profit and loss - 2

Actualrial gains/(losses) on retirement benefit obligation

- -

Income tax relating to components of the other comprehensive income

0 1

Other comprehehnsive income for the period, net of tax

0 1




Table 9: Common-size statement for Consolidated Balance sheet, as a percentage of total

assets, Full year

Common-size statement - Consolidated Balance sheet as a percentage of Total assets, Full year (%)

2010 2009 2008

Current assets




9

7


2

2

Inventories 18

18

19



2


30

29

Non-current assets


0

0

Derivative financial instruments 0 -

0


19

16


46

48


5

5

Other assets 0

0

0


70

71

Total assets 100

100

100

Current liabilities


24

24


1

0


0

2

Provisions 5

5

6

Borrowings - - -

Other liabilities 0

0

0


30

32


Borrowings 21

44

47

Derivative financial instruments - 1 -



Deferred tax liabilities - - -

Provisions 3

3

4

Deferred income 3

2

1

Other liabilities 0

0

0


51

52


81

84

Net assets 44

19

16

Equity


4

5

Reserves 1

1

0


16

11

Total equity 44

19

16

Table 10: Common-size statement for Consolidated Balance sheet, as a percentage of Total

assets, Half year

Common-size statement - Consolidated Balance sheet as a percentage of Total assets, Half year (%)

29/01/2011 23/01/2010

Current assets


7


2

Inventories 18

18




29

Non-current assets


0


0




20


46


4

Other assets 0

0


71

Total assets 100

100

Current liabilities


24


0

Current tax liablities 1 -

Provisions 4

5

Borrowings - -

Other liabilities 0

0


29


Borrowings 20

21


Deferred tax liabilities - -

Provisions 3 3

Deferred income 3

2

Other liabilities 0

0


27


56

Net assets 43

44

Equity


26

Reserves 1

1




17

Total equity 43

44


Receipts from customers, Full year


2010 2009 2008




Other revenue 2 2 2

Interest paid 2 3 2

Tax paid 0 2 1


CASH FLOWS FROM INVESTING ACTIVITIES 0

Payment for available for sale financial assets - - 0


Proceeds from sale of land and building - - 18

Capital gains tax paid on disposal of land and building - - 2

Payments for intangible assets 1 1 1

Payments for other assets - 0 0

Lease incentives receivable 1 1 0





Proceeds from borrowings 13 - 5

Repayment of borrowings 20 - 8

Repayment of Myer Notes 4 -

Funding received from related party - - 0

Funding paid to related party - 0 0

Repayments of employee share loans 0 0 0

Funding of employee share loans - 0 -

Payment for shares acquired by the Myer Equity Plan Trust 0 - -

Proceeds from the issue of shares 10 0 0

Payment of capital return - - 11

Non-recurring finance costs associated with Initial Public Offering 1 - -

Payment of cost of Initial Public Offering 2 - -

Dividend paid 2 - 6



Net cash flows from financing activities 7 0 19

Net increase(decrease) in cash and cash equivalents 2 1 2




Receipts from customers, Half year


29/01/2011 23/01/2010




Other revenue 4 3

Interest paid 3 5

Tax paid 0 3



Payment for available for sale financial assets - -


Proceeds from sale of land and building - -

Capital gains tax paid on disposal of land and building - -

Payments for intangible assets 2 2

Payments for other assets - -

Lease incentives receivable 1 1





Proceeds from borrowings - -

Repayment of borrowings - -

Repayment of Myer Notes - -

Funding received from related party - -

Funding paid to related party - -

Repayments of employee share loans 0 0

Funding of employee share loans - -

Payment for shares acquired by the Myer Equity Plan Trust - -

Proceeds from the issue of shares 18 0

Payment of capital return - -

Non-recurring finance costs associated with Initial Public Offering - -

Payment of cost of Initial Public Offering 5 -



Dividend paid 4 -

Net cash flows from financing activities 13 0

Net increase(decrease) in cash and cash equivalents 5 3





2010 2009 2008


Rate of return on assets (ROA) = EBIT/ average total assets 13.72% 12.28% 22.17%



Expenses as a percentage of sales:

Selling expences 21.96% 22.21% 26.00%

Administration expenses 9.55% 9.74% 10.78%

EBIT before non-recurring IPO transaction costs 8.13% 7.23% 14.77%

Finance costs 1.34% 2.69% 3.12%

Net finance costs 1.26% 2.52% 2.58%

Profit before income tax before non-recurring IPO transaction costs 6.87% 4.71% 12.19%

Income tax expense 1.95% 1.38% 1.05%

Profit for the period before non-recurring IPO transaction costs 4.92% 3.34% -

Initial Public Offering transaction costs 2.90% - -

Total assets turnover ratio = sales/average total assets 168.71% 169.71% 150.17%


10.86% 32.12% 83.42%

Cost of interest & finance charges = Interest and finance charge expenses/Average total liabilities 3.28% 5.19% 5.86%

Basic Earnings Per Share (EPS) in cents 12.3 23.8 -

EFFICIENCY RATIOS

Accounts recievable turnover = sales/ average trade accounts recievable 226.57 238.51 238.65




1.61 1.53 1.53

Inventory turnover = COGS/average inventory -4.72 -4.76 4.91

Inventory turnover in days = days in the period/iventory turnover -77.32 -76.61 74.31

Accounts payable turnover= Purchases/ Average trade accounts payable -

7.59 - 7.95

9.13

Average days of accounts payable= days in the period/ accounts payable turnover -

48.06 - 45.89

39.99

LIQUIDITY RATIOS

Short term

Current ratio= current assets/current liabilities 0.87 1.01 0.93

Quick ratio= (current assets- inventories)/current liabilities 0.23 0.41 0.34

cash flow from operations to current liabilities ratio = cash flow from operations/average current liabilities 0.43 0.28 0.26

LONG TERM

Debt to equity ratio= total libailities/total shareholders' equity 127.88% 422.67% 524.74%

Debt to total assets ratio = total liabilities/ total assets 56.12% 80.87% 83.99%

Leverage ratio = total assets/ total shareholders' equity 227.88% 522.67% 624.74%

Cash flow from operations to total liabilities ratio = cash flow from operations/average total liabilities($) 0.22 0.10 0.10

Interest and finance coverage= EBIT/Interest and finance expense 6.10 2.87 4.73


29/01/2011 23/01/2010


Rate of return on assets (ROA) = EBIT/ average total assets 8.35% 9.13%





Expenses as a percentage of sales

Selling expences 21.36% 20.61%

Administration expenses 9.48% 8.97%

EBIT before non-recurring IPO transaction costs 9.71% 10.05%

Finance costs 1.09% 1.46%

Net finance costs 1.02% 1.37%

Profit before income tax before non-recurring IPO transaction costs 8.69% 8.68%

Income tax expense 2.40% 2.29%

Profit for the period before non-recurring IPO transaction costs 6.28% 6.39%

Initial Public Offering transaction costs 0.12% 5.21%

Total assets turnover ratio = sales/average total assets 86.03% 90.82%


12.16% 3.41%

Cost of interest & finance charges = Interest and finance charge expenses/Average total liabilities 1.56% 1.81%


EFFICIENCY RATIOS

Accounts recievable turnover = sales/ average trade accounts recievable - -


- -

Inventory turnover = COGS/average inventory -2.37 2.57

Inventory turnover in days = days in the period/iventory turnover -76.29 70.54


- -


- -

LIQUIDITY RATIOS



Short term

Current ratio= current assets/current liabilities 0.92 1.00

Quick ratio= (current assets- inventories)/current liabilities 0.32 0.39

cash flow from operations to current liabilities ratio = cash flow from operations/average current liabilities 0.34 0.30

LONG TERM

Debt to equity ratio= total libailities/total shareholders' equity 130.99% 126.74%

Debt to total assets ratio = total liabilities/ total assets 56.71% 55.90%

Leverage ratio = total assets/ total shareholders' equity 230.99% 226.74%

Cash flow from operations to total liabilities ratio = cash flow from operations/average total liabilities($) 0.18 0.16

Interest and finance coverage= EBIT/Interest and finance expense 9.51 7.36

6.3 Appendix C: Harvey Norman




2010 2009 2008


Cost Of Sales 93 100 100



Distribution expenses 113 128 100

Marketing expenses 115 104 100

Occupancy expenses 136 127 100


Other expenses 115 163 100



Finanse costs 102 105 100

Share of net profit of joint venture entities 198 154 100

Share of joint venture property revaluation (26) 38 100


Earnigns Before Interest & Tax (EBIT) 76 69 100



Profit from continuing operations attributable to minority interests

- 100 100

Profit from continuing operations attributable to members of the parent

- 60 100


Foreign currency translation 0 0 -

Net fair value gain on available- for-sale investments

0 0 -

Cash flow hedges: Gain/(loss) taken to equity 0 0 -

Cash flow hedges: Transferred realised gains to other income

0 0 -

Cash flow hedges: Transferred to statement of financial position

0 0 -

Fair value revaluation of land and building 0 0 -

Total other comprehensive income/loss for the period, net of tax

0 0 -

Total comprehensive income for the period 0 0 -


Diluted earnings per share (cents per share) 65 60 100



1/12/2010 1/12/2009


Cost Of Sales 93 100

Gross Profit 95 100

Other income 106 100

Distribution expenses 88 100

Marketing expenses 111 100



Occupancy expenses 107 100


Other expenses 70 100

Finance costs 97 100

Share of net profit of joint venture entities 129 100

Share of joint venture property revaluation (69) 100


Earnings Before Interest & Tax (EBIT) 110 100




- 100


- 100


Foreign currency translation 3 100


179 100

Cash flow hedges: Gain/(loss) taken to equity 225 100


(2) 100


(9,000) 100

Fair value revaluation of land and building 33 100


20 100







2010 2009 2008




Cost Of Sales (72) (72) (73)



Distribution expenses (1) (1) (1)

Marketing expenses (26) (22) (22)

Occupancy expenses (17) (15) (12)

Administration expenses (28) (28) (26)

Other expenses (6) (8) (5)

Finance costs (3) (2) (2)

Share of net profit of joint venture entities 1 0 0

Share of joint venture property revaluation (1) 1 3


Earnings Before Interest & Tax (EBIT) 31 27 39

Income tax expense (11) (9) (11)



- (0) (0)


- 15 25

Other comprehensive income 0 0 0

Foreign currency translation 0 1 -


0 0 -

Cash flow hedges: Gain/(loss) taken to equity (0) (0) -


0 (0) -


0 (0) -

Fair value revaluation of land and building 0 1 -


0 2 -

Total comprehensive income for the period 18 17 -


Diluted earnings per share (cents per share) 0 0 0

Table 8: Common-size statement for Comprehensive Income Statement, as a percentage of

sales, Half year




1/12/2010 1/12/2009


Cost Of Sales (73) (73)

Gross Profit 27 27

Other income 73 83

Distribution expenses (1) (1)

Marketing expenses 27 (27)

Occupancy expenses (14) (16)

Administration expenses (28) (26)

Other expenses (5) (5)

Finance costs (3) (2)

Share of net profit of joint venture entities 1 1

Share of joint venture property revaluation 0 (0)


Earnings Before Interest & Tax (EBIT) 27 35

Income tax expense (8) (11)



0 0


16 22

Other comprehensive income 0 0

Foreign currency translation (3) (1)


0 0

Cash flow hedges: Gain/(loss) taken to equity 0 (0)


(0) 0


(0) 0

Fair value revaluation of land and building 0 0


(0) (0)








2010 2009 2008



11.41% 10.91% 16.93%




Distribution expenses 0.68% 0.72% 0.56%

Marketing expenses 26.41% 22.24% 21.55%

Occupancy expenses 16.97% 14.83% 11.75%

Administration expenses 27.81% 28.00% 25.75%

Other expenses 6.38% 8.45% 5.22%

Finance costs 2.50% 2.41% 2.32%

Income tax expense 11.04% 8.95% 11.10%


0.37 0.41 0.44


11.29% 10.95% 19.70%


5.46% 8.08% 5.88%

Basic Earnings Per Share (EPS) in cents 21.78 20.18 33.76

EFFICIENCY RATIOS


1.25 1.39 1.41


292.95 263.22 259.23


3.71 4.29 4.67




98.30 85.00 78.19


1.31 1.61 1.70


278.28 227.20 214.89

LIQUIDITY RATIOS

Short term


1.62 1.11 1.24


1.35 0.92 1.03


0.40 0.32 0.27

LONG TERM


71.73% 77.56% 72.82%


41.77% 43.68% 42.14%


171.73% 177.56% 172.82%


0.25 0.28 0.20


4.90 3.14 7.44


12/2010 12/2009



5.55% 5.18%




Distribution expenses 50.53% 59.95%



Marketing expenses 2656.65% 2717.34%

Occupancy expenses 1405.90% 1583.54%

Administration expenses 2766.04% 2635.57%

Other expenses 546.31% 516.09%

Finanse costs 265.49% 214.13%

Income tax expense 803.45% 1079.33%


0.21 0.19


6.17% 7.62%


2.57% 2.26%


EFFICIENCY RATIOS


0.71 0.63


255.94 287.27


1.89 1.88


95.52 96.42


0.84 0.71


216.43 253.47

LIQUIDITY RATIOS

Short term


1.58 1.59


1.26 1.32


0.08 0.12

LONG TERM




85.24% 77.74%


46.02% 43.74%


185.24% 177.74%


0.05 0.08


5.01 6.85

business analysis

Documents

trend analysis

ratio analysis

financial strengths

financial reports of

commonsize statements

common size statements

industry statistics

market based ratios