KATHMANDU ANNUAL REPORT  2013 9 of input cost changes were not particularly significant with  regard to the year-on-year variation in gross margin.  Expenses, excluding depreciation, amortisation and financing  costs, increased by $15.0m (9.8%). This was a decrease as  a percentage of sales from 44.1% to 43.8%, but there was a favourable movement in the NZD:AUD cross rate during  the year. Across the year: Operating expenses were similar in total dollars between the  first half and second half of FY2013. We expect our trading  pattern and resulting earnings profile for the Australasian  market between first half and second half in each financial  year to continue. Specifically, our c.40/60 split of total sales  between two half years matched with operating costs that  are incurred on close to a 50/50 basis for the same periods,  will mean Australasian earnings growth will continue to be  primarily determined by performance in the second half of  each financial year. Our level of capital expenditure in FY2013 was very similar to  the prior year, after adjusting for $2.2m of FY2012 spend that  related to projects completed in FY2013. Our average spend  per completed capital project was not as high as anticipated.  This was mainly attributable to effective management of  the cost of new and existing store projects, along with later  than planned timing of spend on major systems projects.  We opened seven more permanent stores in FY2013  than in FY2012, and also completed more relocation and  refurbishment projects than in the prior year. Depreciation  and amortisation expense increased by $1.1m, 11.6%. We are  forecasting to increase capital expenditure in FY2014, and our  planned capital projects mean that we will maintain an annual  capital expenditure spend of $20m or more for several years  ahead. We recently extended our existing bank facilities for a further  year to the end of 2015, on slightly improved terms, and  with a A$10m increase in facility limits related specifically to  increased requirements for rental bonds, guarantees and trade  credit instruments. The total available banking facility remains  Our expectation with regard to the core Australasian business  remains that the pattern of reducing overheads as a % of  sales in areas such as warehousing and distribution, will be  approximately offset by increasing store rental, retail direct  costs and online costs. Property rent increased by $4.2m (10.6%) and was unchanged as a % of sales (11.4%). When reviewed prior  to adjusting for the impact of exchange rates, rent in  Australia did increase as a % of sales by c.40bps, as we  continued our planned strategy of opening stores in higher  cost but ultimately more profitable locations.  All other operating expenses reduced by 30 bps as a %  of sales, largely as a result of operating cost efficiencies  in distribution and advertising. Excluding advertising costs,  operating expenses increased slightly as a % of sales due  to the increased weighting of our Australian retail stores. We continued to increase necessary operating and capital  expenditure to support growth in the online sales channel,  and the uplift in expenses relating to online partially offset  the savings in other operating costs as a % of sales.