Financial Performance Analysis and Management Accounting for William Hill PLC - Research Paper Example

Financial performance Analysis and Management accounting for William Hill PLC Table of contents Financial analysis of William Hill PLC…………………………………………………………………….2 Profitability Ratios Analysis…………………………………………………….............................2 Gross Profit Margin……………………………………………………………………….2 Net Profit Margin……………………………………………….…………………………3 Return On Equity………………………………………………………………………….4 Return on Capital Employed………………………………………………………………4 Investment Ratios Analysis……………………………………………………….………………..5 Earnings Per share……………………………………………………………………........5 Price to Earnings………………………………………………………………………......6 Dividend Payout………………………………………………….………………………..6 Management accounting………………………………………………………………………………........8 Critical Analysis of William Hill PLC management accounting………………………………....12 References……………………………………………………………………………………………........15 Appendices...................................................................................................................................................17 Financial Statements Snap shot…………………………………………………………………..17 Ratios Calculations……………………………………………………………………………….19 Segment Information……………………………………………………………….…………….21 Financial performance Analysis and Management accounting for William Hill PLC This report will take into account broadly all the aspects of William Hill’s financial performance in the last four years. Part A will focus on financial performance by employing ratio analysis as a tool. Each piece of information has been obtained from the annual reports of the company (2006-2009). All the calculations are shown in appendices and graphical presentation of ratios’ performance is added in the text, to aid in clear understanding. Part B of the report will steer its direction towards management accounting, which will highlight different management accounting tools that William Hill can employ to reap future benefits in the shape of better business performance. Financial Analysis of William Hill PLC To give a detailed account of William Hill’s financial performance, I am going to use profitability and investment ratio. These ratios will help in identifying the performance of key areas which highly interest the shareholders (Hampton, 1998, p.108). The profitability analysis encompasses analyzing gross and net profit margin, ROE and ROCE. Along with this, investment ratio will encompass EPS, P/E and dividend payout performance, so that a clear picture of all the elements can be obtained. Profitability Ratios Gross Profit margin: It is an indicator of the firm’s production efficiency and shows a relationship between production cost and selling price (Hampton, 1998). William Hill’s gross profit margin (GPM) has been showing an increasing trend from the financial year (FY) 2007, to have grown from 81.48% to 82.75% in FY 2008 and 84.15% in 2009. This increase in GPM can be attributed to a decrease in cost of sales by 4.6% and 4.8% in the last two years. Along with decrease in cost of sales, increase in revenue by 2.4% and 3.5% in FY 08 and 09 respectively, also has led to good gross profit margins. The increase in revenue has been supported by 62.67% increase in online segment’s revenue. However, moving from FY06 to 07, the company did not show quite impressive performance, because GPM reduced due to 8.6% rise in cost of sales. But it is not worrisome; the percentage change in GPM was -0.7%, because revenue increased by 5%, which was supported by 4% increase in retail and online segments. Hence, the overall performance of GPM has been great. Net profit margin (NPM): It has shown a mixed trend of performance, in the shape of 18.65% NPM decreasing to 16.7% in FY07. The decrease can be attributed to increase in operating expenses by 8.64% along with a decrease in operating profit by 9.03%, mainly due to 65% decrease in telephone segment’s operating profit. However, the performance improved in FY08 with showing NPM of 24.28%, the increase is attributed mainly to 29% increase in profit before interest and tax, which is due to huge profit on disposal of assets and 11% increase in investment income. But, in FY09 the margin dropped to 8.14% which is a huge decrease. The reasons behind this decrease are (i) 11.5% decrease in operating income (due to a huge operating losses in telephone segment by 720% and in retail segment by 19%), (ii) 22% increase in operating expenses, (iii) 59.2% decrease in investment income; consequently the net profit decreased by 65.3%. Although the revenue increased by 3.6% but the huge decrease in net profit led to the decrease in the overall ratio. Return On Equity (ROE): This indicates the management’s ability to generate return on the funds provided by the shareholders, hence it interests them the most (Reilly & Brown, 2003, p.334). For William Hill PLC, this ratio has shown a decreasing pattern right from FY06 to FY09. It had a 22.8% decrease from FY06 to FY07 and later on showed 83.5% decrease from FY08 to FY09. Such huge decrease is obviously the result of 65.3% decrease in net profits. Although the equity invested did increase during these years, but due to recession, operational efficiency decreased which led to 22% increase in operating expenses and 11.5% decrease in operating income. Consequently, return on equity decreased tremendously. Return On Capital Employed (ROCE): This ratio indicates firm’s ability to generate return on the capital employed in the business. The higher it is, the better (Reilly & Brown, 2003, p.330). William Hill has shown a mixed pattern of increase and decrease in ROCE, by showing a decrease from 20% to 19% in the FY07, rose to 23% and decreased to 21% in FY08 and 09 respectively. The decrease in FY07 can be attributed to 2.75% decrease in profit before interest and tax, which was brought about because of 8.6% increase in operating expenses. However, the ratio shot up by 20.7% in FY08 mainly due to 29% increase in profit before interest and tax. This increase was due to immense increase in profit on disposal of assets and investment income. Along with this, the capital employed rose by 6.8% which further strengthened the ratio’s performance. But in FY09, the ratio showed a slight decline to 21.56%, the decrease can be attributed to 29.3% decrease in profit before interest and tax, which was due to 22% increase in operating expenses and 59% decrease in investment income. Along with this, capital employed also decreased by 21.8% mainly because of 3% decrease in total assets. Overall profitability analysis: William Hill PLC has not shown a very promising performance in FY09, however a mixed performance pattern has been observed in the FY06, 07 and 08. The operational efficiency has declined and as a result of this, profits have also declined. The company has fallen a prey to recession like many other players in the industry particularly, its telephone segment has experienced consistent losses; however its online segment has shown promising performance. Therefore, it is the management’s responsibility to capitalize upon its strong online segment and to improve operational efficiency by taking cost control measures so that profit before tax and interest can rise, consequently the ratios will improve. Investment ratios Earnings Per share (EPS): Investors are highly interested in this ratio because it indicates their earnings on per share basis (Hampton, 1998, p.116). William Hill PLC has shown a strange combination of performance, by a close increase and decrease in FY 06, 07 and 08 however, a sharp decline was observed in FY09. EPS slightly decreased from 45.5 to 44.7, which was due to 5.64% decrease in net profit. However, the ratio displayed a better performance in FY08 at 47.3. This 6% increase in the figure can be attributed to 48.6% increase in net profit along with 40.4% increase in shares outstanding. But FY09 saw a drastic decline by 80% to show an EPS of 9.5. The decline can be attributed to 65% decline in net profit which has resulted in lower earnings. Price to Earnings (P/E): This ratio is the most important factor for investors in making stock purchase decision. It links the company’s performance with the share’s market performance. The higher this ratio is, the higher becomes the desirability of market to pay more for each pound of earnings (Hampton, 1998, p.117). The P/E of William Hill PLC has shown a downward trend from FY06 till 08, but rose in FY09. The reason can be attributed to 80% decline in EPS, as a result of which P/E being inversely proportional led to shooting up of the ratio. P/E ratio of William Hill is low that means the investment in the share is less risky. The ratio has shown the effects of recession, along with the decline of customer interests in betting and gambling. Moreover, the company’s financials have also not performed impressively, as a result of which the price of share declined. Dividend Payout Ratio: This ratio indicates what percentage of the firm’s earnings is being paid out as dividends to shareholders (Hampton, 1998, p.120). Dividend payout has shown a mixed pattern of satisfactory performance in the FY06 and 07. The reason behind increase in payout in FY07 was 10.7% increase in dividends during FY07. However, the ratio dropped by 30% in FY08 from 49.87% to 34.53% and continued declining in FY09 to 21.55% The consistent drop can be attributed to 78.34% decline in dividends paid, mainly because of lesser earnings which dropped by 65% from FY08 to FY09. Overall Investment ratios performance: All in all, investments ratios of William Hill have not performed well during FY09 mainly because of lower earnings, which has led the market, lose its confidence on the share’s performance. Therefore, the management has to make sure that they devise policies for the next year, so that they can make the earnings able enough to derive better market performance and more satisfied shareholders. A general perception of various analysts about William Hill’s performance is that the company might not be able to bring about major changes in their business, however, it is highly expected that the management will be able to take advantage of the sprouting online business along with increased international clientele base (Parker, 2010 & Elliot, 2008). This will not only help the company to increase their revenue and operational efficiency but will also give William Hill PLC, a sustainable competitive advantage. Critical analysis of William Hill management accounting In order to critically analyse management or cost accounting of William Hill PLC, it is important to briefly explain management accounting and its different tools and techniques which companies employ as a part of their strategies. Management accounting or cost accounting is considered as a key partner in managerial decision making that assists management in planning and controlling activities, with the help of various tools and techniques (Matz & Usry, 2000, pp. 9) It assists managers in planning phase by catering to future needs. Hence, managers produce budgeted financial statements and pre-determined costs and expenses of various functional and non-functional activities. Setting of appropriate price requires vigilant and efficient cost estimate so that later on, the profits do not get eroded because of more expenses and lesser selling price (Matz & Usry, 2000, pp. 9). Information about the cost borne by the company can also help management to make capital expenditure decisions for e.g. buying new machinery or expanding plant facilities etc. In controlling phase, management accounting helps identifying the gaps between the required and desired state of activities and performance. An appropriately planned cost budget for each unit and its activities; can help management to evaluate the performance of all the operating units and identify which ones are not contributing to the total profit as much as they should (Matz & Usry, 2000, pp. 10). To be concise, management accounting assists in devising methods, policies and procedures that can not only help in controlling cost but also in reducing the overall operational cost. It also helps managers to plan for future in the shape of budgets, so that each unit can get its target to achieve and standards to compare performance against. Moreover, management accounting is considered as one of the most important aspects of managerial planning when it comes to setting cost and prices for the services or products (Matz & Usry, 2000, pp. 10). It not only takes into account all the various units, that make up the total cost but also helps in setting up a price which will cover the cost, and at the same time does not drive the customers away. And last but not the least; managerial decision making for both long run and short run, are absolutely incomplete without management accounting (Matz & Usry, 2000, pp. 10), because it is cost accounting which enables the management to make sound and prudent investment decisions, by identifying what are their costs and how will they cover them? There are many accounting tools available that help the management in answering questions like whys, what and how of success or failure in any decision. These tools equip management to be proactive, so that they can predict future with great precision and make prudent decisions. Comprehending revenue and cost structural relationship can help managers get a better idea of what actually is the ability of a company, where is it going and where it can go (Matz & Usry, 2000, pp. 10). The following paragraphs will briefly discuss the most common management accounting tools that businesses employ. Analysis of Cost, volume and profit relationship: One of the most important tools in management accounting is completely analyzing the relationship between cost, volume and profit. Most importantly, it enables the management to identify what elements make up their cost, by segregating cost in fixed and variable cost. As they name suggests, fixed cost remains the same regardless of the volume, whereas variable keeps changing with the volume (Ealey, 2007). Breakeven point analysis: This is used as a benchmark for various newly started activities, which helps the management mark a point beyond which they start making profit, i.e. revenue=cost at breakeven point (Ealey, 2007). Risk Mitigation analysis: Cost accounting also enables the management to mitigate the risk by making a wise decision with all the possible choices. For e.g. if a company plans to expand the facilities, it will have to very critically analyze the incremental revenues along with incurring increased fixed cost. Moreover, they will also have to increase the breakeven point so that they can safely recover their cost, etc. Cash flow analysis: Each business exists to generate more and more cash inflow. Managers can use cash flow analysis to exactly identify the main sources for cash inflow and outflow, which in turn helps them make prudent decisions of how and from where to meet the financing needs of a business (Ealey, 2007). Budgeting: This is one of the most common management accounting tools that companies employ to make sound decisions. It is a tool that does not only deal with calculations, but it is a form of managerial decisions expressed in numbers. It helps the management plan for future as well as measure performance during different time periods (Ealey, 2007). All in all, management or cost accounting helps in making budgeting decisions, cost allocation decisions, capacity decisions, quality decisions, pricing decisions, payroll decisions and control system decisions (Matz & Usry, 2000, pp. 24). I will now carry out a detailed analysis of various cost management tools available for William Hill PLC, which can help make management wise decisions for present and future. Before getting into details, I believe that it is important to establish certain facts about William Hill PLC, which can help locate cost centres and problem areas. Each piece of information about William Hill PLC has been derived from the annual reports of the company (2009). William Hill PLC is a player in service industry, which is characterised by having a high fixed cost in the shape of property and employees. Taking into account their cost structure, it is identified that the company has 16,000 employees and staff cost makes half of their total cost. Their cost of sales includes taxes and loyalties to government and software companies, these are specific costs related to operating in betting gaming industry. Moreover, they also have to bear property cost which includes both the buying and maintenance of their retail outlets and call centres. Other sources of cost include cost of purchasing and maintaining gaming machines. While analysing the business structure of William Hill PLC, it became evident that their operations are based on three channels, namely, online, retail and telephone betting. Retails operations have 2300 shops and telephone operations have two call centres. Online operations are supported by company’s purchased software. At this point, it is also vital to mention the revenue contribution by each segment. Their retail operations account for 80% of the total revenue, in which over the counter bets make 76% contribution to the revenue from this segment. Online segment has a variety of products in its portfolio, out of which, casino and bingo contribute the most to the segment’s total revenue contribution of 21%. However, telephone segment contributes only 3% to the total revenue. Not only this, but telephone segment has been incurring huge operating losses too. In order to increase its customer base, William Hill PLC is planning to expand its operations online along with getting offshore to reach international market. However, it is expected that operating costs will rise due to increased investment in marketing to reach the target market. Lastly, financial analysis of William Hill Plc has made it evident that their return on capital employed has declined by 6% in FY09. Their operating expenses have risen by 22% and operating profits have declined by 25.28% The give piece of information can help identify various cases which William Hill PLC has to deal with, in order to improve their operational efficiency. The following paragraphs will shed light on various tools and options that the company has, to increase their operational productivity. Primarily, the company will have to implement cost controls for retail channel, in the shape of controlled staff cost which has risen by 4% during the year 2009. The staff cost is high for betting shops because customers for over the counter bets, have to have staff to deal with. However, the management now has to plan for a hiring freeze so that they can control their staff costs. Moreover, making investment in property in the shape of shops should not remain in focus, till the time the other two operating channels do not exhibit the required performance. Management must nurture their online segment in its growth stage, hence it should remain the focus of managerial actions for a considerable time period, because it can help the company grab larger market share both on and off-shore. However, the company has incurred and will have to incur huge marketing costs in this regard, so that awareness can be created about William Hill’s online presence. Another aspect which is of utmost importance is the operational efficiency of this channel, which can be brought about by investing less in software acquisitions and more on marketing for this channel. An area of concern for the management is their telephone betting segment which has been consistently showing operating losses. The reason behind poor performance of this segment is management’s inability to assess the need of this service in various target regions. Obviously, a target region which has access to both retail and online channel would not be interested in employing telephone services. Therefore, in order to make this channel more profitable, the management has to plan their service in a customized manner for the target market which prefers telephone to online and retail channels. Thus, they should reduce their investment in telephone operations and restrict to only those regions which show profitable operations during a year. It is an undeniable fact that the nature of business in gaming and betting industry is such that the revenues fluctuate and major portion of the cost is fixed. This contributes to operational efficiency decrement, hence, William Hill PLC should employ strict cost control measures like, lesser employees at call centres, assigning multiple duties to employees, particularly at call centres, deciding peak and low times for calls and changing the number of employees as per the customer traffic. All these steps will help match the revenue with cost, which might help in decreasing operating expenses. Most importantly, like any other player in the industry, William Hill PLC must plan for peak times of betting and games on all their three channels. With more access to internet, their online operations are expected to generate more profits than targeted for. However, for greater return on capital employed and better operational results, the company has to focus on better asset management and less investment in assets. Moreover, assigning budget to different units and activities can help them exactly indentify which unit is producing how much and at what expense. Hence, they can budget each unit’s activities and measure their performance. Therefore, based on historical performance, retail and online channels should get a higher chunk of budget because they make a significant contribution to the overall revenue. In the end, I believe that William Hill’s management can effectively control their cost and improve their operational efficiency by taking into account the big picture, encompassing all the costs, activities and their performances. The best way to do this is to employ a well integrated information system which provides information at top, middle and operational levels of management; needing various types of information to plan, monitor and control the performance of various channels and devise strategies appropriately to fill in performance gaps. References Ealey. T., 2007. Accounting tools for Operations and Management. Intermediate care Business. Available at: www.immediatecarebusiness.com/articles/07b1feat2.html. [Accessed 21 May 2010] Elliot. M., 2008. William Hill retail business strong. Reuters: UK. Available at: http://uk.reuters.com/article/idUKL1028382620080110 [Accessed 21 May 2010] Hampton, J.J., 1998. Financial Decision Making. 4th ed. New Delhi: Prentice Hall, pp. 108, 116,- 17, 120 Matz. A., & Usry. M.F., 2000. Cost Accounting- Planning and Control. 7th ed. Cincinnati: South-Western Publishing, pp. 9-10, 24 Parker. J., 2010. William Hill results: sluggish growth. E Gaming Review. Available at: http://www.egrmagazine.com/news/518312/william-hill-results-sluggish-growth-who-booming.thtml [Accessed 21 May 2010] Reilly, F.K. & Brown, K.C., 2003. Investment Analysis and Portfolio Management. 7th ed. Ohio: Thomson Learning, pp. 330,334 William Hill PLC, 2009. Transforming a Trusted Brand, annual reports and accounts 2008-2009, London: William Hill PLC. [Online] Available at: http://www.williamhillPLC.com/wmh/investors/reports/2009rep/. [Accessed 21 May 2010] …- Annual reports and accounts 2008-2007. [Online] Available at: http://www.williamhillPLC.com/wmh/investors/reports/2008rep/ [Accessed 21 May 2010] …- Annual reports and accounts 2007-2006. [ Online] Available at: http://www.williamhillPLC.com/wmh/investors/reports/2007rep/ [Accessed 21 May 2010] …- Annual reports and accounts 2006-2005. [ Online] Available at: http://www.williamhillPLC.com/wmh/investors/reports/2006rep/ [Accessed 21 May 2010] Appendices Appendix 1: Financial Statements Snap Shot: Income Statements           % change  Million pounds 2006 2007 2008 2009   2007 2008 2009                   revenue 894.2 940.4 963.7 997.9   5.17 2.48 3.55 Cost of sales 160.3 174.2 -166.2 -158.2   8.67 4.59 4.81 GP 733.9 766.2 797.5 839.7   4.40 4.09 5.29 operting income 6.3 10.4 6.9 6.1   65.08 33.65 11.59 operating expenses 451.6 490.6 -528.3 -645.7   8.64 7.68 22.22 operating profit 292.2 265.8 267.8 200.1   9.03 0.75 25.28 profit on disposal 0 6.7 88 0     1213.43   investment income 13 24.3 27 11   86.92 11.11 59.26 Profit before interest and tax 305.2 296.8 382.8 279.8   2.75 28.98 26.91 finance cost 69.8 87.6 -89.5 -89.9   25.50 2.17 0.45 profiit before tax 235.4 209.2 293.3 189.9   11.13 40.20 35.25 profit after tax 166.8 157.4 234 81.2   5.64 48.67 65.30                   EPS                 basic 45.5 44.7 47.3 9.5         diluted 44.9 44.3 47.1 9.4                           dividends 70.9 78.5 80.8 17.5   10.72 2.93 78.34 # shares OS 366.7 352.2 494.4 641.3   3.95 40.37 29.71 closing share price in pounds 6.34 5.25 2.14 1.908   17.19 59.24 10.84   26-Dec-06 31-Dec-07 30-Dec-08 29-Dec-09         Balance sheets Million pounds          % change   2006 2007 2008 2009   2007 2008 2009 non-current assets                 intangible 1342.7 1365.9 1491.5 1446.1   1.73 9.20 3.04 Property, plant and equipment 207.0 214.7 209.6 197.6   3.72 2.38 5.73 Interest in associate and joint ventures 5.3 12.7 6.6 6.6   139.62 48.03 0.00 Deferred tax asset 8.5 1.9 19.6 24.1   77.65 931.58 22.96 total noncurrent assets 1563.5 1595.2 1727.3 1674.4   2.03 8.28 3.06 current assets                 Inventories 0.5 0.6 0.5 0.3   20.00 16.67 40.00 Trade and other receivables 30.4 32.3 31.6 55.9   6.25 2.17 76.90 Cash and cash equivalents 98.7 69.4 76.5 119.8   29.69 10.23 56.60 Derivative financial instruments 14.4 5.2 0 0   63.89     total current assets 144.0 107.5 108.6 176.0   25.35 1.02 62.06 total assets 1707.5 1702.7 1835.9 1850.4   0.28 7.82 0.79 Current liabilities                 Trade and other payables 108.6 90.8 109.2 109.2   16.39 20.26   Current tax liabilities 66.3 51.8 61.1 57.0   21.87 17.95 6.71 Borrowings 0.9 1.2 0.8 375.0   33.33 33.33 46775.00 Derivative financial instruments 5.6 4.7 4.5 11.5   16.07 4.26 155.56 total current liabilities 181.4 148.5 175.6 552.7   18.14 18.25 214.75 Non-current liabilities                 Borrowings 1141.2 1152.1 1068.4 294.2   0.96 7.26 72.46 Retirement benefit obligations 25.1 3.3 25.9 43.2   86.85 684.85 66.80 Deferred financial instruments 0.0 0.0 37.0 36.0       2.70 Deferred tax liabilities 169.3 165.7 171.4 168.0   2.13 3.44 1.98 total noncurrent liabilities 1335.6 1321.1 1302.7 541.4   1.09 1.39 58.44 Total liabilities 1517.0 1469.6 1478.3 1094.1   3.12 0.59 25.99 net assets 190.5 233.1 357.6 756.3   22.36 53.41 111.49 Equity                 Called-up share capital 36.2 35.4 35.4 70.2   2.21 0.00 98.31 Share premium account 311.3 0.0 0 317.3         Capital redemption reserve 6.0 6.8 6.8 6.8   13.33 0.00 0.00 Merger reserve 26.1 26.1 26.1 26.1   0.00 0.00 0.00 Own shares held 46.9 34.4 31.1 23.9   26.65 9.59 23.15 Hedging and translation reserves 9.4 3.2 26.2 12.8   65.96 918.75 51.15 Retained earnings 99.4 248.2 389.3 412.6   349.70 56.85 5.99 Equity for equity holders     348.1 744.1       113.76 minority interest     9.5 12.2         total equity 190.5 233.1 357.6 756.3   22.36 53.41 111.49 capital employed = TA - CL 1526.1 1554.2 1660.3 1297.7   1.8 6.8 21.8 Appendix 2 Financial Ratios: Ratio 2006 2007 2008 2009   % change             2007 2008 2009 Profitability ratio                                   gross profit (GP/sales)*100 82.07% 81.48% 82.75% 84.15%   0.73 1.57 1.68                   net profit (NP/Sales)*100 18.65% 16.74% 24.28% 8.14%   10.27 45.07 66.49                   Return on SHE (NP/SHE)*100 87.56% 67.52% 65.44% 10.74%   22.88 3.09 83.59                   Return on capital ( NP+interest+tax/ cap employed)*100 20.00% 19.10% 23.06% 21.56%   4.51 20.73 6.48                   Investment ratio                                   Basic EPS (NP/#of shares O.S) 45.50 44.70 47.30 9.50   1.76 5.82 79.92                   P/E (Mkt. price/EPS) 0.14 0.12 0.05 0.20   15.71 61.48 343.92                   Dividend payout ( dividends/ NP) 42.51 49.87 34.53 21.55 17.33 30.76 37.58 The table on next page is showing separate calculations done to reach the given figure of all the ratios.           PROFITABILITY RATIOS           2006 2007 2008 2009 GP 733.90 766.20 797.50 839.70 Revenue 894.20 940.40 963.70 997.90 GPM (GP/Revenue)*100 82.07 81.48 82.75 84.15           NP 166.80 157.40 234.00 81.20 Revenue 894.20 940.40 963.70 997.90 NPM ( NP/Revenue)*100 18.65 16.74 24.28 8.14           NP 166.80 157.40 234.00 81.20 ShareHolder's Equity 190.50 233.10 357.60 756.30 ROE (NP/SHE)*100 87.56 67.52 65.44 10.74           Profit before interest and tax 305.20 296.80 382.80 279.80 T A 1707.50 1702.70 1835.90 1850.40 CL 181.40 148.50 175.60 552.70 Capital employed (TA-CL) 1526.10 1554.20 1660.30 1297.70 ROCE (NPIT/CE)*100 20.00 19.10 23.06 21.56           INVESTMENT RATIOS                   Net Profit 166.80 157.40 234.00 81.20 # of shares Outstanding 366.70 352.20 494.40 641.30 EPS (NP/Share OS)*100 45.49 44.69 47.33 9.50           closing Price of share 6.34 5.25 2.14 1.91   26-Dec-06 31-Dec-07 30-Dec-08 29-Dec-09 EPS 45.40 44.69 47.30 9.50 P/E( Price/EPS) 0.14 0.12 0.05 0.20           Dividends 70.9 78.5 80.8 17.5 NP 166.80 157.40 234.00 81.20 Dividends Payout (D/Np)*100 42.51 49.87 34.53 21.55 Appendix 3 Segments’ Information:  Million Pounds 2006 2007 2008 2009   % change revenue from each segment                 retail 698.9 759.3 790.7 757.5   8.64 4.14 4.20 online 57.5 119.8 125.1 203.5   108.35 4.42 62.67 telephone 130.5 53 39.8 29.7   59.39 24.91 25.38                                     operating profit/loss                 retail 225.9 229.8 240.1 194.5   1.73 4.48 18.99 online 16.7 30 49.2 58.7   79.64 64.00 19.31 telephone 61.5 16.1 5.9 -36.6   73.82 63.35 720.34   2006 2007 2008 2009 Contribution to total revenue %         retail 78.16 80.74 82.05 75.91 online 6.43 12.74 12.98 20.39 telephone 14.59 5.64 4.13 2.98                     operating profit contribution%         retail 77.31 86.46 89.66 97.20 online 5.72 11.29 18.37 29.34 telephone 21.05 6.06 2.20 18.29 Read More