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| Name | Symbol | Market | Type |
|---|---|---|---|
| Lewis (J)5%Pf | LSE:BB90 | London | Preference Share |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 70.00 | 0 | 01:00:00 |
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RNS Number : 7809S
Lewis(John) PLC
16 September 2010
John Lewis plc
Unaudited condensed Interim Financial Statements for the half year to 31 July
2010
Strict Embargo: 7:00am
16 September 2010
JOHN LEWIS PARTNERSHIP REPORTS STRONG FIRST HALF YEAR PERFORMANCE
Chairman's statement
We finished last year strongly and carried that momentum into 2010 with
continued sales and profit growth, market share gains and powerful customer
advocacy for both the John Lewis and Waitrose brands. Both divisions delivered
above expectations in a difficult, relatively flat market.
The decisions and actions taken throughout the recession - investing in existing
stores, in new formats and in multi-channel, and developing strategic
partnerships to take our brands to new customers and new areas - are now having
an impact at the operating level.
The investments we made in value have been especially important. In Waitrose,
the success of the essential range and promotional pricing, such as for the
Delia and Heston campaigns, generated growth. Likewise, John Lewis has placed
great emphasis on value with new ranges, a successful spring advertising
campaign and the recent launch of Never Knowingly Undersold online.
We are also managing substantial reorganisations in parts of our business to
ensure that the Partnership remains competitive and that our Partners remain at
the heart of our service offering. This has been a difficult period for the
Partners affected by change and I want to thank them for their patience and
commitment throughout.
Ultimately, it has once again been the hard work and dedication of all our
Partners in a tough trading environment which has delivered these impressive
results.
Financial Results
The Partnership delivered gross sales of GBP3.81bn for the first half of the
year, an increase of GBP421.0m, or +12.4% on last year, and operating profit of
GBP145.2m, an increase of GBP19.0m, or +15.1% on last year. Together these
represent an operating profit margin of 3.81% (2009/10 3.73%). Profit before
tax was GBP111.2m, an increase of GBP24.2m, or +27.8%, on last year.
Trading Performance
Waitrose
Waitrose has delivered consistent and significant outperformance of the market
throughout the first six months of the year. Gross sales were up 11.3%
(GBP245.2m) to GBP2.42bn and food only like-for-like (LFL) sales grew by 3.9%,
excluding petrol - this compares to an overall market average for the period of
around 1%. Growth accelerated through the half, with LFL sales up 3.3% in Q1
and 4.5% in Q2. Operating profit increased by GBP7.5m (6.2%) to GBP127.8m.
Underlying operating profit[1] increased by GBP4.0m, or 3.1%, to GBP132.6m.
Waitrose Partners have worked hard to deliver this performance, meeting the
challenges of a stretching growth agenda and demanding trading conditions. A
continued commitment to leading service levels has been reflected in investment
in extra hours in branches. A programme of investment in growth is successfully
delivering the long-term strategic ambition of bringing Waitrose to more people
in more places.
Waitrose stepped up its marketing initiatives with the launch in March of its
campaign featuring Delia Smith and Heston Blumenthal. This is already paying
dividends, attracting 370,000 more customer transactions in the first eight
weeks with customers putting additional items in their trolleys and spending
more per transaction.
Through the addition of new space and strategic partnerships Waitrose is
extending its reach. Nine new branches were opened in the first six months of
the year, which represents an additional 75,000 sq ft (1.7%) of selling space.
Three of these new shops are in the convenience format, including a new
small-format branch in Cambridge. The branch opening programme is weighted
towards the second half of the year, with 15 branches planned, including eight
convenience stores. As a result Waitrose welcomed 1,100 new Partners and plans
to create 1,300 more new jobs in the second half of the year. In June the
intention was announced to purchase five shops in the Channel Islands. Subject
to regulatory approval, these branches are set to open in spring 2011.
Two key strategic partnerships have taken Waitrose to many more customers in a
range of settings. Seven Waitrose outlets in Welcome Break service stations
were opened during the period, taking the total to 12, and these shops are
performing ahead of expectations. The trial with Boots is showing encouraging
results at this early stage. There are now 11 Boots stores offering Waitrose
'food for now' and another three where customers can buy Waitrose 'food for
later'. Seven Waitrose shops currently offer Boots health and toiletries
ranges.
The Waitrose Deliver online service continues to grow and is now in 133
branches. Online grocery sales were up 54% in the period.
The 'everyday to gourmet' offer makes Waitrose accessible and attractive to a
broader range of customers. The essential Waitrose range gives customers a
clear entry price point with no compromise on quality and is established as a
firm favourite. It now accounts for 17% of sales.
Product innovation continues apace: Duchy Originals from Waitrose is now in
branches with over 150 products available and a total of 200 before the end of
the year. This best-of-British organic range joins Seriously (indulgent
desserts) and Menu From (restaurant-quality ready meals) to create an unmatched
top tier offer. A significant new development for Waitrose is the opening this
autumn of its Cookery School.
John Lewis
John Lewis opened the current year following a successful Christmas. This
momentum has been maintained so far in 2010, with trade for the first six months
well ahead of 2009 and our own expectations. Gross sales were up 14.5%
(GBP175.8m) at GBP1.38bn and LFL sales were up 12.3%. Gross sales also
increased on 2008 by 11.2%. Operating profit rose by GBP15.6m (76.8%) to
GBP35.9m. Underlying operating profit increased by GBP17.7m, or 59.4%, to
GBP47.5m.
John Lewis won share in each of its three markets. Fashion sales grew by 19.3%,
helped by further brand introductions; Home recovered well after a tough 2009
and increased its sales by 16.7%; and in Electricals & Home Technology (EHT),
the World Cup helped sales to grow by 6.7%.
The high street shops recovered strongly during the half year, but online sales
were at the heart of John Lewis' performance with 36.1% growth against a market
performance of 16.7%. John Lewis has made real progress online as demonstrated
by its sales figures and as recognised by the industry through the 'online
retailer of the year' award from Which? It has made important progress to unite
Partners behind this multi-channel opportunity and the latest step is the
decision to extend "Never Knowingly Undersold" to johnlewis.com.
After four years of successful development, Greenbee, our direct services arm,
has been transferred to the John Lewis division. Relaunching later this month
under the new name of John Lewis Insurance, the operation will continue to
develop a range of insurance products.
John Lewis is also addressing the efficiency of its operating model this year,
by continuing its Branch of the Future programme. This work has been extremely
challenging for many John Lewis Partners and their professionalism has been
impressive.
Investment is continuing at a fast pace throughout the business. The 'John
Lewis at home' shop in Poole continues to trade well and a second trial shop in
Croydon has just opened, with further branches planned this year in Swindon and
Tunbridge Wells. Investment has increased in our department stores, with the
new womenswear concept being extended to 10 shops by the autumn. Reading is
half way through its refurbishment. John Lewis remains on track for the opening
of its new shop at the Olympic site in Stratford, in September 2011.
Capital Expenditure
Capital spending in the first six months of the year was GBP154.8m, with
Waitrose investing GBP101.7m primarily on new and acquired branches, and John
Lewis investing GBP48.4m primarily on the new Stratford and Croydon shops, the
refurbishment at Reading, Magna Park, the Enfield Combined Service Building and
the roll out of the new womenswear concept.
In addition, GBP4.7m was invested centrally, mainly in internally developed
systems, maintaining and modernising our IT infrastructure and in the
refurbishment of our holiday centres.
Financing
Cash generated from operations during the period was GBP275.3m. We remain
committed to our focus on efficient cash, working capital and credit risk
management.
In July of this year the Partnership issued a GBP300m bond repayable in 2025 and
bought back GBP158m of the bond due in 2012, which reduced our average cost of
borrowing, extended our borrowing maturity and reduced our refinancing risk. At
the end of the first six months net debt was GBP608.2m, which in relation to our
balance sheet strength is well within our risk tolerance. The Partnership
balance sheet remains strong with substantial capacity to increase our
borrowings should we wish to, and we remain well within the limits of the
financial covenants in our bank facilities and bonds.
Our finance costs fell by GBP5.2m (13.3%) to GBP34.0m, principally as a result
of reduced pension and long leave financing costs, partially offset by the
premium on buying back GBP158m of the bond due in 2012.
Pensions
At the start of the year our Pension Fund deficit (on an accounting basis) stood
at GBP904.6m, and we have taken a number of steps to reduce this. We made a
one-off cash contribution to the Pension Fund of GBP150m in March 2010. The
Stock Exchange listing of Ocado in July crystallised the Pension Fund's equity
holding, and the Fund realised GBP100m from the sale of part of its stake. At
the end of July the Pension Fund accounting deficit stood at GBP567.9m, down by
GBP336.7m. Net of deferred tax the deficit was GBP408.9m.
Discussions are in progress with the Pension Fund Trustees in respect of the
triennial actuarial valuation of the Fund (as at 31 March 2010). The
substantial special contributions made by the Partnership, in the order of
GBP400m, have gone a long way towards mitigating any actuarial deficit.
Corporate Social Responsibility
The Partnership values its relationships with its Partners, customers,
suppliers, the environment and the wider community. We have already achieved
some important milestones this year such as retaining Platinum status in the
Business in the Community's Corporate Responsibility Index and achieving the
Carbon Trust Standard for our action in reducing carbon emissions. On shop
energy consumption, in both Waitrose and John Lewis we exceeded targets for
2009/10 (22% and 23% reduction per-square-foot respectively against a 2003/04
baseline).
We are committed to reducing our environmental impact and promoting good
environmental practice; dealing fairly with our suppliers; selling responsibly
sourced, quality products; and making a positive contribution to the communities
where we trade.
Download our recently-published CSR report, A Shared Passion, at
www.johnlewispartnership.co.uk/ourresponsibilities.
2010/11 Outlook
After six weeks of the second half of the year, Partnership gross sales are 9.9%
higher than last year. Waitrose gross sales have increased by 8.9% (3.9% LFL)
and John Lewis gross sales are 11.7% higher than last year (8.8% LFL).
For the remainder of this year and into 2011, we anticipate more challenging
trading conditions as higher taxes and public spending cuts begin to bite and
household disposable incomes come under pressure.
However, the Partnership's ownership model enables us to focus on the long term
and we will continue to move ahead with our plans. Despite the economic
headwinds, and tougher comparables in the second half, we remain confident that
both Waitrose and John Lewis will continue to grow ahead of the market.
Charlie Mayfield
Chairman
Where this interim report contains forward-looking statements, these are made by
the directors in good faith based on the information available to them up to the
time of their approval of this report. These statements should be treated with
caution due to the inherent uncertainties underlying any such forward-looking
information.
Further information
John Lewis Partnership
Andrew Moys, Director of Communications
020 7592 6292
Citigate Dewe Rogerson
Simon Rigby / George Cazenove / Nicola Smith
020 7282 2993
Simon Rigby (mobile)
07771 784 446
George Cazenove (mobile)
07834 767 054
Waitrose
Christine Watts, Communications Director
07764 676 414
Gill Smith, Senior PR Manager, Corporate
01344 825 165
John Lewis
Helen Dickinson, Head of Press and PR
07785 952 567
Louise Cooper, Press and Public Relations Manager, Corporate 020
7592 6223/
07808 574 117
Notes to editors
The John Lewis Partnership - The John Lewis Partnership operates 30 John Lewis
shops across the UK (28 department stores and two John Lewis at home),
johnlewis.com and 231 Waitrose supermarkets. The business has an annual turnover
of over GBP7.4bn. It is the UK's largest example of worker co-ownership where
all 70,000 staff are Partners in the business.
Waitrose - Waitrose has shops in England, Scotland and Wales. Its strong
performance has been driven by the success of the essential Waitrose range, an
unmatchable top tier of products including the new Duchy Originals from Waitrose
and free delivery driving rapid online growth. Regularly voted 'Britain's
favourite supermarket'*, Waitrose combines the convenience of a supermarket with
the expertise and service of a specialist shop - dedicated to offering quality
food that has been responsibly sourced combined with high standards of customer
service. (www.waitrose.com)
* Telegraph Magazine Shop Awards - Best for Food & Drink; BBC Watchdog -
Britain's Favourite Supermarket; Good Housekeeping Awards - Favourite
Supermarket; Grocer Gold Awards - Grocer of the Year
John Lewis - John Lewis, 'Britain's favourite retailer 2009'* and 'Multiple
Department Store of the Year 2009' ** typically stocks more than 350,000
separate lines in its department stores. The website stocks over 100,000
products focused on the best of fashion, beauty, home and giftware and
electrical items including online exclusives. johnlewis.com is consistently
ranked one of the top online shopping destinations in the UK.
(www.johnlewis.com). John Lewis Insurance will offer a range of comprehensive
insurance products - home, car, wedding and event, travel and pet insurance and
life cover - delivering the usual values of expertise, trust and customer
service expected from the John Lewis brand.
* Verdict consumer satisfaction index, January 2010
** The Drapers Awards for fashion retail, October 2009
John Lewis plc Interim Report 2010
Consolidated income statement
for the half year ended 31 July 2010
+--------------------------+-----------+-----------+-------------+
| | Half | Half | Year to |
| | year to | year to | |
+--------------------------+-----------+-----------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+-----------+-----------+-------------+
| Continuing operations | GBPm | GBPm | GBPm |
+--------------------------+-----------+-----------+-------------+
| Gross sales | 3,808.1 | 3,387.1 | 7,421.5 |
+--------------------------+-----------+-----------+-------------+
| | | | |
+--------------------------+-----------+-----------+-------------+
| Revenue | 3,431.8 | 3,099.2 | 6,734.6 |
+--------------------------+-----------+-----------+-------------+
| Cost of sales | (2,303.6) | (2,108.1) | (4,460.4) |
+--------------------------+-----------+-----------+-------------+
| Gross profit | 1,128.2 | 991.1 | 2,274.2 |
+--------------------------+-----------+-----------+-------------+
| Other operating income | 34.3 | 27.6 | 51.1 |
+--------------------------+-----------+-----------+-------------+
| Operating expenses | (1,017.3) | (892.5) | (1,937.3) |
+--------------------------+-----------+-----------+-------------+
| Operating profit | 145.2 | 126.2 | 388.0 |
+--------------------------+-----------+-----------+-------------+
| Finance costs | (36.3) | (42.4) | (87.6) |
+--------------------------+-----------+-----------+-------------+
| Finance income | 2.3 | 3.2 | 5.8 |
+--------------------------+-----------+-----------+-------------+
| Profit before | 111.2 | 87.0 | 306.2 |
| Partnership bonus and | | | |
| tax | | | |
+--------------------------+-----------+-----------+-------------+
| Partnership bonus | - | - | (151.3) |
+--------------------------+-----------+-----------+-------------+
| Profit before tax | 111.2 | 87.0 | 154.9 |
+--------------------------+-----------+-----------+-------------+
| Taxation | (35.9) | (29.3) | (48.3) |
+--------------------------+-----------+-----------+-------------+
| Profit for the period | 75.3 | 57.7 | 106.6 |
+--------------------------+-----------+-----------+-------------+
The presentation of prior half year results has been re-presented in respect of
swap interest, as explained in note 5.
Consolidated statement of comprehensive income/(expense)
for the half year ended 31 July 2010
+--------------------------+----------+------------+-------------+
| | Half | Half year | Year to |
| | year to | to | |
+--------------------------+----------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+----------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+----------+------------+-------------+
| Profit for the period | 75.3 | 57.7 | 106.6 |
+--------------------------+----------+------------+-------------+
| Other comprehensive | | | |
| income/(expense): | | | |
+--------------------------+----------+------------+-------------+
| Actuarial gain/(loss) | 181.8 | (191.9) | (160.4) |
| on defined benefit | | | |
| pension schemes | | | |
+--------------------------+----------+------------+-------------+
| Movement of deferred | (94.3) | 53.7 | 22.3 |
| tax on | | | |
| pension schemes | | | |
+--------------------------+----------+------------+-------------+
| Movement of current | 43.4 | - | 22.6 |
| tax on | | | |
| pension schemes | | | |
+--------------------------+----------+------------+-------------+
| Net loss on cash flow | (1.4) | (9.6) | (9.3) |
| hedges | | | |
+--------------------------+----------+------------+-------------+
| Total comprehensive | 204.8 | (90.1) | (18.2) |
| income/(expense) for the | | | |
| period | | | |
+--------------------------+----------+------------+-------------+
Consolidated balance sheet
as at 31 July 2010
+--------------------------+-----------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+-----------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+-----------+------------+-------------+
| Non-current assets | | | |
+--------------------------+-----------+------------+-------------+
| Intangible assets | 95.3 | 93.2 | 92.5 |
+--------------------------+-----------+------------+-------------+
| Property, plant and | 3,423.9 | 3,340.4 | 3,391.0 |
| equipment | | | |
+--------------------------+-----------+------------+-------------+
| Trade and other | 41.9 | 46.5 | 42.5 |
| receivables | | | |
+--------------------------+-----------+------------+-------------+
| Deferred tax asset | - | 71.2 | 41.9 |
+--------------------------+-----------+------------+-------------+
| | 3,561.1 | 3,551.3 | 3,567.9 |
+--------------------------+-----------+------------+-------------+
| Current assets | | | |
+--------------------------+-----------+------------+-------------+
| Inventories | 382.2 | 344.3 | 399.0 |
+--------------------------+-----------+------------+-------------+
| Trade and other | 174.9 | 146.7 | 167.4 |
| receivables | | | |
+--------------------------+-----------+------------+-------------+
| Current tax receivable | 16.6 | - | - |
+--------------------------+-----------+------------+-------------+
| Derivative financial | 11.8 | 18.2 | 13.6 |
| instruments | | | |
+--------------------------+-----------+------------+-------------+
| Cash and cash | 435.6 | 333.1 | 560.0 |
| equivalents | | | |
+--------------------------+-----------+------------+-------------+
| | 1,021.1 | 842.3 | 1,140.0 |
+--------------------------+-----------+------------+-------------+
| Total assets | 4,582.2 | 4,393.6 | 4,707.9 |
+--------------------------+-----------+------------+-------------+
| Current liabilities | | | |
+--------------------------+-----------+------------+-------------+
| Borrowings and | (101.2) | (63.8) | (115.6) |
| overdrafts | | | |
+--------------------------+-----------+------------+-------------+
| Trade and other payables | (751.4) | (684.6) | (928.5) |
+--------------------------+-----------+------------+-------------+
| Current tax payable | - | (26.7) | (1.6) |
+--------------------------+-----------+------------+-------------+
| Finance lease | (0.6) | (0.6) | (0.7) |
| liabilities | | | |
+--------------------------+-----------+------------+-------------+
| Provisions | (73.9) | (71.8) | (68.5) |
+--------------------------+-----------+------------+-------------+
| Derivative financial | (3.7) | (2.8) | (2.4) |
| instruments | | | |
+--------------------------+-----------+------------+-------------+
| | (930.8) | (850.3) | (1,117.3) |
+--------------------------+-----------+------------+-------------+
| Non-current liabilities | | | |
+--------------------------+-----------+------------+-------------+
| Borrowings | (922.5) | (794.4) | (787.2) |
+--------------------------+-----------+------------+-------------+
| Trade and other payables | (51.6) | (50.4) | (49.8) |
+--------------------------+-----------+------------+-------------+
| Finance lease | (27.5) | (28.8) | (28.5) |
| liabilities | | | |
+--------------------------+-----------+------------+-------------+
| Provisions | (121.8) | (105.3) | (116.3) |
+--------------------------+-----------+------------+-------------+
| Deferred tax liabilities | (51.1) | - | - |
+--------------------------+-----------+------------+-------------+
| Retirement benefit | (567.9) | (932.0) | (904.6) |
| obligations | | | |
+--------------------------+-----------+------------+-------------+
| | (1,742.4) | (1,910.9) | (1,886.4) |
+--------------------------+-----------+------------+-------------+
| Total liabilities | (2,673.2) | (2,761.2) | (3,003.7) |
+--------------------------+-----------+------------+-------------+
| Net assets | 1,909.0 | 1,632.4 | 1,704.2 |
+--------------------------+-----------+------------+-------------+
| | | | |
+--------------------------+-----------+------------+-------------+
| Equity | | | |
+--------------------------+-----------+------------+-------------+
| Share capital | 6.7 | 6.7 | 6.7 |
+--------------------------+-----------+------------+-------------+
| Share premium | 0.3 | 0.3 | 0.3 |
+--------------------------+-----------+------------+-------------+
| Other reserves | (1.6) | (0.5) | (0.2) |
+--------------------------+-----------+------------+-------------+
| Retained earnings | 1,903.6 | 1,625.9 | 1,697.4 |
+--------------------------+-----------+------------+-------------+
| Total equity | 1,909.0 | 1,632.4 | 1,704.2 |
+--------------------------+-----------+------------+-------------+
| | | | |
+--------------------------+-----------+------------+-------------+
Consolidated statement of changes in equity
for the half year ended 31 July 2010
+------------------+---------+---------+---------+---------+----------+----------+
| | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| | Share | Share | Capital | Hedging | Retained | Total |
+------------------+---------+---------+---------+---------+----------+----------+
| | capital | premium | reserve | reserve | earnings | equity |
+------------------+---------+---------+---------+---------+----------+----------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+------------------+---------+---------+---------+---------+----------+----------+
| Balance at 31 | 6.7 | 0.3 | 1.4 | 7.7 | 1,706.4 | 1,722.5 |
| January 2009 | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Profit for the | - | - | - | - | 57.7 | 57.7 |
| period | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Actuarial loss | - | - | - | - | (191.9) | (191.9) |
| on defined | | | | | | |
| benefit | | | | | | |
| pension schemes | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Tax on above | - | - | - | - | 53.7 | 53.7 |
| items | | | | | | |
| recognised in | | | | | | |
| equity | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Fair value | - | - | - | (7.9) | - | (7.9) |
| losses on cash | | | | | | |
| flow hedges | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | (1.3) | - | (1.3) |
| property, | | | | | | |
| plant and | | | | | | |
| equipment | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | (0.4) | - | (0.4) |
| inventories | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Balance at 1 | 6.7 | 0.3 | 1.4 | (1.9) | 1,625.9 | 1,632.4 |
| August 2009 | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Balance at 31 | 6.7 | 0.3 | 1.4 | 7.7 | 1,706.4 | 1,722.5 |
| January 2009 | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Profit for the | - | - | - | - | 106.6 | 106.6 |
| period | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Actuarial loss | - | - | - | - | (160.4) | (160.4) |
| on defined | | | | | | |
| benefit | | | | | | |
| pension schemes | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Tax on above | - | - | - | - | 44.9 | 44.9 |
| items | | | | | | |
| recognised in | | | | | | |
| equity | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Fair value gains | - | - | - | (8.1) | - | (8.1) |
| on cash | | | | | | |
| flow hedges | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | (1.3) | - | (1.3) |
| property, | | | | | | |
| plant and | | | | | | |
| equipment | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | 0.1 | - | 0.1 |
| inventories | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Dividends | - | - | - | - | (0.1) | (0.1) |
+------------------+---------+---------+---------+---------+----------+----------+
| Balance at 30 | 6.7 | 0.3 | 1.4 | (1.6) | 1,697.4 | 1,704.2 |
| January 2010 | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Profit for the | - | - | - | - | 75.3 | 75.3 |
| period | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Actuarial loss | - | - | - | - | 181.8 | 181.8 |
| on defined | | | | | | |
| benefit | | | | | | |
| pension schemes | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Tax on above | - | - | - | - | (50.9) | (50.9) |
| items | | | | | | |
| recognised in | | | | | | |
| equity | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Fair value | - | - | - | (1.5) | - | (1.5) |
| losses on cash | | | | | | |
| flow hedges | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | - | - | - |
| property, | | | | | | |
| plant and | | | | | | |
| equipment | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| - transfers to | - | - | - | 0.1 | - | 0.1 |
| inventories | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| Balance at 31 | 6.7 | 0.3 | 1.4 | (3.0) | 1,903.6 | 1,909.0 |
| July 2010 | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
| | | | | | | |
+------------------+---------+---------+---------+---------+----------+----------+
Statement of consolidated cash flows
for the half year ended 31 July 2010
+--------------------------+------------+------------+-------------+
| | Half year | Half year | Year to |
| | to | to | |
+--------------------------+------------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+------------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+------------+------------+-------------+
| Cash generated from | 275.3 | 295.2 | 657.3 |
| operations | | | |
+--------------------------+------------+------------+-------------+
| Net taxation paid | (12.0) | (16.4) | (39.8) |
+--------------------------+------------+------------+-------------+
| Partnership bonus paid | (151.2) | (124.3) | (124.3) |
+--------------------------+------------+------------+-------------+
| Special Contribution to | (150.0) | - | - |
| the Pension | | | |
| Scheme | | | |
+--------------------------+------------+------------+-------------+
| Finance costs paid | (0.2) | (6.5) | (1.1) |
+--------------------------+------------+------------+-------------+
| Net cash (used | (38.1) | 148.0 | 492.1 |
| in)/generated from | | | |
| operating activities | | | |
+--------------------------+------------+------------+-------------+
| | | | |
+--------------------------+------------+------------+-------------+
| Cash flows from | | | |
| investing activities | | | |
+--------------------------+------------+------------+-------------+
| Purchase of property, | (139.2) | (258.5) | (410.3) |
| plant and | | | |
| equipment | | | |
+--------------------------+------------+------------+-------------+
| Purchase of intangible | (16.3) | (19.7) | (33.2) |
| assets | | | |
+--------------------------+------------+------------+-------------+
| Proceeds from sale of | 0.4 | 0.4 | 7.1 |
| property, plant | | | |
| and equipment | | | |
+--------------------------+------------+------------+-------------+
| Finance income received | 2.1 | 2.8 | 5.4 |
+--------------------------+------------+------------+-------------+
| Net cash used in | (153.0) | (275.0) | (431.0) |
| investing activities | | | |
+--------------------------+------------+------------+-------------+
| | | | |
+--------------------------+------------+------------+-------------+
| Cash flows from | | | |
| financing activities | | | |
+--------------------------+------------+------------+-------------+
| Finance costs paid in | (56.8) | - | (10.5) |
| respect of bonds | | | |
+--------------------------+------------+------------+-------------+
| Payment of capital | (0.3) | (0.4) | (0.6) |
| element of | | | |
| finance leases | | | |
+--------------------------+------------+------------+-------------+
| Payments to preference | (0.1) | (0.1) | (0.1) |
| shareholders | | | |
+--------------------------+------------+------------+-------------+
| Cash inflow from | 138.3 | 275.0 | 272.7 |
| borrowings | | | |
+--------------------------+------------+------------+-------------+
| Net cash generated from | 81.1 | 274.5 | 261.5 |
| financing activities | | | |
+--------------------------+------------+------------+-------------+
| | | | |
+--------------------------+------------+------------+-------------+
| (Decrease)/increase in | (110.0) | 147.5 | 322.6 |
| net cash and | | | |
| cash equivalents | | | |
+--------------------------+------------+------------+-------------+
| Net cash and cash | 444.4 | 121.8 | 121.8 |
| equivalents at | | | |
| beginning of period | | | |
+--------------------------+------------+------------+-------------+
| Net cash and cash | 334.4 | 269.3 | 444.4 |
| equivalents at end of | | | |
| period | | | |
+--------------------------+------------+------------+-------------+
| | | | |
+--------------------------+------------+------------+-------------+
| | | | |
+--------------------------+------------+------------+-------------+
| Net cash and cash | | | |
| equivalents comprise: | | | |
+--------------------------+------------+------------+-------------+
| Cash | 76.6 | 66.1 | 84.1 |
+--------------------------+------------+------------+-------------+
| Short term deposits | 359.0 | 267.0 | 475.9 |
+--------------------------+------------+------------+-------------+
| Bank overdraft | (101.2) | (63.8) | (115.6) |
+--------------------------+------------+------------+-------------+
| | 334.4 | 269.3 | 444.4 |
+--------------------------+------------+------------+-------------+
Notes to the financial statements
1 Basis of preparation
These interim financial statements were approved by the Board on 15 September
2010. They are unaudited, and do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
The results for the half year to 31 July 2010 have been prepared using the
discrete period approach, considering the half year as an accounting period in
isolation. The tax charge is based on the effective rate estimated for the full
year, which has been applied to the profits in the first half year.
The group's published financial statements for the year ended 30 January 2010
have been reported on by the group's auditors and filed with the Registrar of
Companies. The report of the auditors was unqualified and did not contain any
statement under Chapter 3 of Part 16 of the Companies Act 2006.
This condensed consolidated interim financial information for the half year
ended 31 July 2010 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim
Financial Reporting', as adopted by the European Union. The condensed
consolidated interim financial information should be read in conjunction with
the annual financial statements for the year ended 30 January 2010, which have
been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union.
2 Accounting policies
The group's results for the half year to 31 July 2010 have been prepared on a
basis consistent with the group's accounting policies published in the financial
statements for the year ended 30 January 2010.
These accounting policies reflect IFRS and interpretations that are expected to
be applicable to the group for its 2010/11 financial statements. It is possible
that there will be changes to these standards and interpretations before the end
of the group's 2010/11 financial year, which might require adjustments to this
information before it is included in the financial statements for the year ended
29 January 2011.
3 Risks and uncertainties
The principal risks and uncertainties affecting the group were identified as
part of the Business Review, set out on pages 24 to 26 of the John Lewis Annual
Report and Accounts 2010, a copy of which is available on the group's website
www.johnlewispartnership.co.uk. These risks remain relevant for the second half
of the current financial year and comprise: economic; regulatory and political;
financial and treasury; pensions; human resources; customer offer; fraud and
compliance; operational; health and safety; and business continuity and disaster
recovery.
4 Segmental reporting
The group's operating segments have been identified as John Lewis, Waitrose and
Corporate and other. Corporate and other includes corporate and shared services
overheads, finance transformation costs and Greenbee operations. The operating
profit of each segment is after charging relevant corporate and shared service
costs based on the business segments' usage of corporate and shared service
facilities and services.
Waitrose's business is not subject to highly seasonal fluctuations although
there is an increase in trading in the fourth quarter of the year. There is a
more marked increase in the fourth quarter for the John Lewis business.
+--------------------------+----------+----------+-----------+----------+
| | John | Waitrose | Corporate | Group |
| | Lewis | | and other | |
+--------------------------+----------+----------+-----------+----------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------+----------+----------+-----------+----------+
| Half year to 31 July | | | | |
| 2010 | | | | |
+--------------------------+----------+----------+-----------+----------+
| Gross sales | 1,384.7 | 2,423.4 | - | 3,808.1 |
+--------------------------+----------+----------+-----------+----------+
| Adjustment for sale or | (51.0) | - | - | (51.0) |
| return sales | | | | |
+--------------------------+----------+----------+-----------+----------+
| Value added tax | (193.2) | (132.1) | - | (325.3) |
+--------------------------+----------+----------+-----------+----------+
| Revenue | 1,140.5 | 2,291.3 | - | 3,431.8 |
+--------------------------+----------+----------+-----------+----------+
| | | | | |
+--------------------------+----------+----------+-----------+----------+
| Operating profit | 35.9 | 127.8 | (18.5) | 145.2 |
| excluding property | | | | |
| profits | | | | |
+--------------------------+----------+----------+-----------+----------+
| Property profits | - | - | - | - |
+--------------------------+----------+----------+-----------+----------+
| Operating profit | 35.9 | 127.8 | (18.5) | 145.2 |
+--------------------------+----------+----------+-----------+----------+
| Finance costs | - | - | (36.3) | (36.3) |
+--------------------------+----------+----------+-----------+----------+
| Finance income | - | - | 2.3 | 2.3 |
+--------------------------+----------+----------+-----------+----------+
| Profit before tax | 35.9 | 127.8 | (52.5) | 111.2 |
+--------------------------+----------+----------+-----------+----------+
| | | | | |
+--------------------------+----------+----------+-----------+----------+
| Half year to 1 August | | | | |
| 2009 | | | | |
+--------------------------+----------+----------+-----------+----------+
| Gross sales | 1,208.9 | 2,178.2 | - | 3,387.1 |
+--------------------------+----------+----------+-----------+----------+
| Adjustment for sale or | (40.4) | - | - | (40.4) |
| return sales | | | | |
+--------------------------+----------+----------+-----------+----------+
| Value added tax | (147.3) | (100.2) | - | (247.5) |
+--------------------------+----------+----------+-----------+----------+
| Revenue | 1,021.2 | 2,078.0 | - | 3,099.2 |
+--------------------------+----------+----------+-----------+----------+
| | | | | |
+--------------------------+----------+----------+-----------+----------+
| Operating profit | 20.3 | 120.3 | (14.4) | 126.2 |
| excluding property | | | | |
| profits | | | | |
+--------------------------+----------+----------+-----------+----------+
| Property profits | - | - | - | - |
+--------------------------+----------+----------+-----------+----------+
| Operating profit | 20.3 | 120.3 | (14.4) | 126.2 |
+--------------------------+----------+----------+-----------+----------+
| Finance costs | - | - | (42.4) | (42.4) |
+--------------------------+----------+----------+-----------+----------+
| Finance income | - | - | 3.2 | 3.2 |
+--------------------------+----------+----------+-----------+----------+
| Profit before tax | 20.3 | 120.3 | (53.6) | 87.0 |
+--------------------------+----------+----------+-----------+----------+
| | | | | |
+--------------------------+----------+----------+-----------+----------+
The comparatives have been re-presented to allocate certain shared service
overheads on a consistent basis to the current year.
The presentation of prior half year results has been re-presented in respect of
swap interest, as explained in note 5.
4 Segmental reporting (continued)
+--------------------------+----------+----------+-----------+-----------+
| | John | Waitrose | Corporate | Group |
| | Lewis | | and other | |
+--------------------------+----------+----------+-----------+-----------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------+----------+----------+-----------+-----------+
| Year to 30 January 2010 | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Gross sales | 2,889.2 | 4,532.3 | - | 7,421.5 |
+--------------------------+----------+----------+-----------+-----------+
| Adjustment for sale or | (116.5) | - | - | (116.5) |
| return sales | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Value added tax | (355.3) | (215.1) | - | (570.4) |
+--------------------------+----------+----------+-----------+-----------+
| Revenue | 2,417.4 | 4,317.2 | - | 6,734.6 |
+--------------------------+----------+----------+-----------+-----------+
| | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Operating profit | 164.7 | 266.6 | (43.5) | 387.8 |
| excluding property | | | | |
| profits | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Property profits | - | 0.2 | - | 0.2 |
+--------------------------+----------+----------+-----------+-----------+
| Operating profit | 164.7 | 266.8 | (43.5) | 388.0 |
+--------------------------+----------+----------+-----------+-----------+
| Finance costs | - | - | (87.6) | (87.6) |
+--------------------------+----------+----------+-----------+-----------+
| Finance income | - | - | 5.8 | 5.8 |
+--------------------------+----------+----------+-----------+-----------+
| Partnership bonus | - | - | (151.3) | (151.3) |
+--------------------------+----------+----------+-----------+-----------+
| Profit before tax | 164.7 | 266.8 | (276.6) | 154.9 |
+--------------------------+----------+----------+-----------+-----------+
| | | | | |
+--------------------------+----------+----------+-----------+-----------+
| 31 July 2010 | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Segment assets | 1,539.6 | 2,312.7 | 729.9 | 4,582.2 |
+--------------------------+----------+----------+-----------+-----------+
| Segment liabilities | (387.2) | (461.9) | (1,824.1) | (2,673.2) |
+--------------------------+----------+----------+-----------+-----------+
| Net assets | 1,152.4 | 1,850.8 | (1,094.2) | 1,909.0 |
+--------------------------+----------+----------+-----------+-----------+
| | | | | |
+--------------------------+----------+----------+-----------+-----------+
| 1 August 2009 | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Segment assets | 1,545.7 | 2,255.6 | 592.3 | 4,393.6 |
+--------------------------+----------+----------+-----------+-----------+
| Segment liabilities | (311.5) | (483.5) | (1,966.2) | (2,761.2) |
+--------------------------+----------+----------+-----------+-----------+
| Net assets | 1,234.2 | 1,772.1 | (1,373.9) | 1,632.4 |
+--------------------------+----------+----------+-----------+-----------+
| | | | | |
+--------------------------+----------+----------+-----------+-----------+
| 30 January 2010 | | | | |
+--------------------------+----------+----------+-----------+-----------+
| Segment assets | 1,552.3 | 2,271.7 | 883.9 | 4,707.9 |
+--------------------------+----------+----------+-----------+-----------+
| Segment liabilities | (406.9) | (454.2) | (2,142.6) | (3,003.7) |
+--------------------------+----------+----------+-----------+-----------+
| Net assets | 1,145.4 | 1,817.5 | (1,258.7) | 1,704.2 |
+--------------------------+----------+----------+-----------+-----------+
| | | | | |
+--------------------------+----------+----------+-----------+-----------+
The comparatives have been re-presented to allocate certain shared service
overheads on a consistent basis to the current year.
5 Net finance costs
+--------------------------+----------+------------+-------------+
| | Half | Half year | Year to |
| | year to | to | |
+--------------------------+----------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+----------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+----------+------------+-------------+
| Finance costs | | | |
+--------------------------+----------+------------+-------------+
| Total finance costs in | 25.0 | 22.0 | 46.9 |
| respect | | | |
| of borrowings | | | |
+--------------------------+----------+------------+-------------+
| Premium paid on bond | 9.2 | - | - |
| redemption | | | |
+--------------------------+----------+------------+-------------+
| Fair value measurements | 0.2 | - | 0.5 |
| and other | | | |
+--------------------------+----------+------------+-------------+
| Net finance costs | - | 12.2 | 24.6 |
| arising on defined | | | |
| benefit retirement | | | |
| schemes | | | |
+--------------------------+----------+------------+-------------+
| Net finance costs | 1.9 | 8.2 | 15.6 |
| arising on other | | | |
| employee benefit | | | |
| schemes | | | |
+--------------------------+----------+------------+-------------+
| Total finance costs | 36.3 | 42.4 | 87.6 |
+--------------------------+----------+------------+-------------+
| Finance income | | | |
+--------------------------+----------+------------+-------------+
| Total finance income in | (1.1) | (1.7) | (3.7) |
| respect | | | |
| of investments | | | |
+--------------------------+----------+------------+-------------+
| Fair value measurements | (1.0) | (1.5) | (2.1) |
| and other | | | |
+--------------------------+----------+------------+-------------+
| Net finance income | (0.2) | - | - |
| arising on defined | | | |
| benefit retirement | | | |
| schemes | | | |
+--------------------------+----------+------------+-------------+
| Total finance income | (2.3) | (3.2) | (5.8) |
+--------------------------+----------+------------+-------------+
| Net finance costs | 34.0 | 39.2 | 81.8 |
+--------------------------+----------+------------+-------------+
| | | | |
+--------------------------+----------+------------+-------------+
| | Half | Half year | Year to |
| | year to | to | |
+--------------------------+----------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+----------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+----------+------------+-------------+
| Total finance costs in | 25.0 | 22.0 | 46.9 |
| respect | | | |
| of borrowings | | | |
+--------------------------+----------+------------+-------------+
| Premium paid on bond | 9.2 | - | - |
| redemption | | | |
+--------------------------+----------+------------+-------------+
| Total finance income in | (1.1) | (1.7) | (3.7) |
| respect | | | |
| of investments | | | |
+--------------------------+----------+------------+-------------+
| Net finance costs in | 33.1 | 20.3 | 43.2 |
| respect of | | | |
| borrowings and | | | |
| investments | | | |
+--------------------------+----------+------------+-------------+
| Fair value measurements | (0.8) | (1.5) | (1.6) |
| and other | | | |
+--------------------------+----------+------------+-------------+
| Net finance | (0.2) | 12.2 | 24.6 |
| (income)/costs arising | | | |
| on | | | |
| defined benefit | | | |
| retirement schemes | | | |
+--------------------------+----------+------------+-------------+
| Net finance costs | 1.9 | 8.2 | 15.6 |
| arising on other | | | |
| employee benefit | | | |
| schemes | | | |
+--------------------------+----------+------------+-------------+
| Net finance costs | 34.0 | 39.2 | 81.8 |
+--------------------------+----------+------------+-------------+
The comparatives for the half year to 1 August 2009 have been re-presented to
show swap interest receivable alongside the equivalent swap interest payable,
consistent with the presentation in the current year and as at 30 January 2010.
This was previously included within interest receivable.
6 Income taxes
Income tax expense is recognised based on management's best estimate of the full
year effective tax rate based on estimated full year profits. The estimated full
year effective tax rate for the year to 29 January 2011 is 32.3% (the estimated
tax rate for the period to 1 August 2009 was 34.0%). The decrease on last year
is mainly because last year's tax charge included disallowable costs and
depreciation on assets that did not qualify for tax relief.
7 Capital expenditure
+-----------------------------+------------------+--------------+
| | Property, plant | Intangible |
| | and equipment | assets |
+-----------------------------+------------------+--------------+
| | GBPm | GBPm |
+-----------------------------+------------------+--------------+
| Net book values at 30 | 3,391.0 | 92.5 |
| January 2010 | | |
+-----------------------------+------------------+--------------+
| Additions | 138.6 | 16.2 |
+-----------------------------+------------------+--------------+
| Disposals | (0.3) | (0.4) |
+-----------------------------+------------------+--------------+
| Depreciation and | (105.4) | (13.0) |
| amortisation | | |
+-----------------------------+------------------+--------------+
| Net book values at 31 July | 3,423.9 | 95.3 |
| 2010 | | |
+-----------------------------+------------------+--------------+
| | | |
+-----------------------------+------------------+--------------+
Property, plant and equipment additions include GBP15.8m in respect of store
development in John Lewis and GBP67.4m in respect of store acquisitions and
development in Waitrose.
Intangible assets additions primarily relate to internally developed IT systems.
8 Reconciliation of profit before tax to cash generated from operations
+-------------------------+------------+------------+-------------+
| | Half year | Half year | Year to |
| | to | to | |
+-------------------------+------------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+-------------------------+------------+------------+-------------+
| | GBPm | GBPm | GBPm |
+-------------------------+------------+------------+-------------+
| Profit before tax | 111.2 | 87.0 | 154.9 |
+-------------------------+------------+------------+-------------+
| Amortisation of | 13.0 | 11.6 | 24.4 |
| intangible assets | | | |
+-------------------------+------------+------------+-------------+
| Depreciation | 105.4 | 97.1 | 189.9 |
+-------------------------+------------+------------+-------------+
| Net finance costs | 34.0 | 39.2 | 81.8 |
+-------------------------+------------+------------+-------------+
| Partnership bonus | - | - | 151.3 |
| provision | | | |
+-------------------------+------------+------------+-------------+
| Loss on disposal of | 0.3 | 0.7 | 2.1 |
| tangible and | | | |
| intangible assets | | | |
+-------------------------+------------+------------+-------------+
| Decrease/(increase) in | 16.8 | 8.0 | (46.7) |
| inventories | | | |
+-------------------------+------------+------------+-------------+
| Increase in receivables | (7.2) | (5.6) | (24.2) |
| | | | |
+-------------------------+------------+------------+-------------+
| (Decrease)/increase in | (2.4) | 54.9 | 129.5 |
| payables | | | |
+-------------------------+------------+------------+-------------+
| Decrease in retirement | (4.8) | (2.1) | (10.4) |
| benefit | | | |
| obligations* | | | |
+-------------------------+------------+------------+-------------+
| Increase in provisions | 9.0 | 4.4 | 4.7 |
+-------------------------+------------+------------+-------------+
| Cash generated from | 275.3 | 295.2 | 657.3 |
| operations | | | |
+-------------------------+------------+------------+-------------+
*The movement in retirement benefit obligations excludes the special
contribution of GBP150m to the Pension Scheme, which is reported in the
Statement of consolidated cash flows.
9 Analysis of net debt
+--------------------------+----------+---------+-----------+---------+
| | 30 | Cash | Other | 31 |
| | January | flow | non-cash | July |
| | 2010 | | movements | 2010 |
+--------------------------+----------+---------+-----------+---------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------+----------+---------+-----------+---------+
| Current assets | | | | |
+--------------------------+----------+---------+-----------+---------+
| Cash and cash | 560.0 | (124.4) | - | 435.6 |
| equivalents | | | | |
+--------------------------+----------+---------+-----------+---------+
| Derivative financial | 13.6 | - | (1.8) | 11.8 |
| instruments | | | | |
+--------------------------+----------+---------+-----------+---------+
| | 573.6 | (124.4) | (1.8) | 447.4 |
+--------------------------+----------+---------+-----------+---------+
| | | | | |
+--------------------------+----------+---------+-----------+---------+
| Current liabilities | | | | |
+--------------------------+----------+---------+-----------+---------+
| Bank overdrafts | (115.6) | 14.4 | - | (101.2) |
+--------------------------+----------+---------+-----------+---------+
| Finance leases | (0.7) | 0.3 | (0.2) | (0.6) |
+--------------------------+----------+---------+-----------+---------+
| Derivative financial | (2.4) | - | (1.3) | (3.7) |
| instruments | | | | |
+--------------------------+----------+---------+-----------+---------+
| | (118.7) | 14.7 | (1.5) | (105.5) |
+--------------------------+----------+---------+-----------+---------+
| | | | | |
+--------------------------+----------+---------+-----------+---------+
| Non-current liabilities | | | | |
+--------------------------+----------+---------+-----------+---------+
| Borrowings | (777.3) | (142.0) | - | (919.3) |
+--------------------------+----------+---------+-----------+---------+
| Unamortised bond | 2.8 | 3.7 | (0.1) | 6.4 |
| transaction costs | | | | |
+--------------------------+----------+---------+-----------+---------+
| Fair value adjustment | (12.7) | - | 3.0 | (9.7) |
| for hedged | | | | |
| risk on bonds | | | | |
+--------------------------+----------+---------+-----------+---------+
| Finance leases | (28.5) | - | 1.0 | (27.5) |
+--------------------------+----------+---------+-----------+---------+
| | (815.7) | (138.3) | 3.9 | (950.1) |
+--------------------------+----------+---------+-----------+---------+
| Total net debt | (360.8) | (248.0) | 0.6 | (608.2) |
+--------------------------+----------+---------+-----------+---------+
Reconciliation of net cash flow to net debt
+--------------------------+------------+------------+-------------+
| | Half year | Half year | Year to |
| | to | to | |
+--------------------------+------------+------------+-------------+
| | 31 July | 1 August | 30 January |
| | 2010 | 2009 | 2010 |
+--------------------------+------------+------------+-------------+
| | GBPm | GBPm | GBPm |
+--------------------------+------------+------------+-------------+
| (Decrease)/increase in | (110.0) | 147.5 | 322.6 |
| cash in | | | |
| the period | | | |
+--------------------------+------------+------------+-------------+
| Cash inflow from | (138.0) | (274.6) | (272.1) |
| increase in debt | | | |
| and lease financing | | | |
+--------------------------+------------+------------+-------------+
| Movement in debt for the | (248.0) | (127.1) | 50.5 |
| period | | | |
+--------------------------+------------+------------+-------------+
| Opening net debt | (360.8) | (402.3) | (402.3) |
+--------------------------+------------+------------+-------------+
| Non-cash movements | 0.6 | (9.7) | (9.0) |
+--------------------------+------------+------------+-------------+
| Closing net debt | (608.2) | (539.1) | (360.8) |
+--------------------------+------------+------------+-------------+
10 Capital commitments
At 31 July 2010 contracts had been entered into for future capital expenditure
of GBP63.1m (2009: GBP89.5m).
11 Related party transactions
During the period John Lewis plc entered into transactions with other group
companies in respect of the supply of goods for resale and associated services
GBP14.5m (2009: GBP9.4m), purchase of goods for resale GBP14.0m (2009:
GBP13.5m), the supply of IT and related services GBP18.6m (2009: GBP17.8m), and
the hire of vehicles GBP5.8m (2009: GBP5.0m).
In addition, John Lewis plc settled other transactions on behalf of group
companies for administrative convenience, such as payroll and supplier
settlement. All such transactions were charged at cost to the relevant group
company. It is not practical to quantify these recharges.
12 Post balance sheet events
In June 2010 the Partnership entered into a contract with Sandpiper CI to
acquire five supermarkets in the Channel Islands. Subject to regulatory
approval, this is expected to become unconditional in October 2010 and
operational control of the stores is expected to pass to the Partnership on a
phased basis from February 2011 to March 2011. The total cost of these stores,
including conversion costs, taxes and fees to be paid by the Partnership, is
expected to be in the region of GBP165m.
Statement of directors' responsibilities
The directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union, and that
the interim management report herein includes a fair review of the information
required by the Disclosure and Transparency Rules (DTR) of the Financial
Services Authority, paragraphs DTR 4.2.7R and DTR 4.2.8R.
For and by Order of the Board
Charlie Mayfield, Chairman
Marisa Cassoni, Finance Director
15 September 2010
[1] Underlying operating profit excludes profits and losses on the disposal of
properties, the costs of significant restructuring, branch opening costs and
other one-off items that are material and infrequent in nature.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFFFWIFSSESU
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