Final Results

RNS Number:3686I
Lewis(John) PLC
06 March 2003

                                 JOHN LEWIS PLC

     PRELIMINARY ESTIMATE OF ANNUAL RESULTS FOR THE YEAR TO 25 JANUARY 2003


     "2002 Results demonstrate the strengths of the John Lewis Partnership"

* Group turnover ahead 5 per cent to #4.7 billion

* Trading profit before pensions up 6 per cent at #267 million

* Profit before tax rises to #146 million up 3 per cent

* #68 million distributed in Partnership Bonus, equivalent to 5 weeks' pay

* Waitrose adds four stores to portfolio - including two new Food & Home formats
in Canary Wharf and Cheltenham

* Department stores investment programme continuing - including completion of
refurbishment of Nottingham and progress in major projects at Peter Jones and
Edinburgh

* Capital expenditure for the year of #246 million, further #270 million planned
in 2003/4

Sir Stuart Hampson, Chairman of John Lewis Partnership, commented:

"We're greatly encouraged by the strong performance of both parts of the
business in the second half. This shows the commitment put in by everyone in
this co-owned business. In difficult trading conditions for the retail sector as
a whole, these results demonstrate the strengths of the John Lewis Partnership
on the high street and the benefits of the extensive investment programme
undertaken in recent years.

"2003 has started with a strong January and - not surprisingly - a quieter
February. Our non-food business has been affected by a number of extraordinary
short-term factors, particularly in central London. It's definitely not a period
on which to predict long-term trends.

"With consolidation high on the retail agenda, both for food retailing and in
the department store sector, we believe we are well positioned to benefit from
any opportunities that may arise."

2002 Results

The John Lewis Partnership is pleased to announce today its results for the year
to 25 January 2003. In a challenging year for the retail sector, the group has
performed well, achieving a five per cent increase in sales to #4.7 billion and
a six per cent increase in trading profits before pensions to #267 million.
Department Stores showed a welcome return to profit growth and Waitrose
continued to build on its record result of last year.

The Partnership's profit before tax rose to #146 million - three per cent ahead
of the previous year - after allowing for interest, our share of losses at our
e-commerce partner Ocado and an increased contribution to our final salary
pension scheme.

The outcome for the year showed a strong recovery from the half-year stage when
profits were 24 per cent down compared to 2001/02. It was a clear demonstration
of the strengths of our trading formats. It also underlined the potential of our
major capital spending programme in both divisions and changes in trading hours
and working arrangements in Department Stores. It was also a reflection of the
hard work of our Partners.

#68 million will be distributed to Partners in Partnership Bonus - awarded to
all 60,000 Partners as a percentage of their pay. This represents 10 per cent,
or 5 weeks of annual pay and is an increase of 11 per cent over last year.

Department Stores

Department Store division increased sales by six per cent, despite continuing
deflation of around one per cent across our product ranges and despite a major
programme of refurbishment at three of our shops. The like-for-like increase was
four per cent. During Christmas and our January Clearance sale, the division
performed particularly well compared with many of our direct competitors.
Televisions and Electronics, Nursery, Cosmetics and Fashion Accessories produced
some of the strongest sales. A better mix of business moved the gross margin
ahead by some 0.4 percentage points. The new corporate identity has now been
rolled out over most of the Division (22 shops now carry the John Lewis name).
We have further increased trading hours, with eight shops now open for seven
days a week and the remaining eighteen for six.

Our textile manufacturing businesses continue to experience tough market
conditions. Production for our own shops grew impressively at 18% on a
like-for-like basis, but we continue to work hard to develop external customers.

Waitrose

Waitrose gained market share over the year with a five per cent increase in
sales. Like-for-like sales increased by four per cent.

Waitrose opened four new shops in the year, including two new Food & Home shops
at Canary Wharf and Cheltenham both of which have started outstandingly.

Our strong identity as a fresh food retailer gives us a considerable advantage
in an increasingly homogenized sector. Another key differentiator is our close
relationships with suppliers, particularly at a local level, which have helped
us to maintain quality and drive innovation.

Direct Sales and e-commerce

Sales by johnlewis.com, the Department Stores' direct sales arm, exceeded
expectations, particularly in the build up to Christmas, which were so far ahead
that we had to bring forward our closing date for Christmas a few days to ensure
we satisfied all orders in time. Current losses are better than anticipated for
this rapidly growing business.

Our two-pronged strategy for home deliveries from Waitrose is on track.
WaitroseDeliver, operating directly from 33 branches outside of London, is
meeting the targets we set for it. Our e-commerce partner Ocado, which handles
deliveries in London, where we have a 37 per cent stake, is now operating from a
new purpose-built warehouse. It has built sales and margins throughout 2002 and
at the same time has won plaudits from customers and commentators for the
quality of its service. We maintain our expectation that Ocado will become
profitable during 2005.

Costs

We faced a number of additional costs during the year. We relocated our main
computer centre at a cost of #4 million. Our annual insurance bill increased by
80 per cent to #11 million in the wake of 11 September 2001. The share of
Ocado's losses which we have to incorporate in our accounts, without tax relief,
increased in line with expectation to #20 million.

Investment

Total capital expenditure last year was #246 million - #114 million in
department stores and #111 million at Waitrose. We also contributed a further
#30 million to Ocado in the form of convertible loans, bringing the cost of our
stake in the company to #76 million.

A further #270 million of investment is planned for the current year, with
continued refurbishment at John Lewis Edinburgh and Peter Jones and the opening
of new Waitrose branches in Belgravia, Portishead and Mill Hill and the
relocation of our Romsey branch.

Partners' Pensions

Following the reaffirmation by the Central Council of our commitment to our
final-salary pension scheme as a key element of our Partners' benefits package,
we have, as anticipated, increased the contribution to our pensions scheme by 8
per cent (#5m) to #68 million.

Partners' Bonus

In its decision on Bonus, the Central Board gave particular attention to two
factors.

First it recognized the underlying improvement in the performance of the
business, the contribution Partners have made to this progress and the
expectation of further gains from improvements in operational efficiency.

Secondly, it acknowledged the impact on current profitability of the extensive
investment programme designed to deliver a thriving retail business in the
future, which is in the long-term interests of all Partners.

The Board measured those considerations alongside the need to retain profits
towards future capital expenditure and decided that an increased distribution of
#68 million was appropriate, representing a rate of 10 per cent of Partners'
pay, equivalent to 5 weeks' pay.

The Year Ahead

Total Partnership sales at the end of week five were 5% ahead. Our department
stores are broadly level with last year's figures. February frequently produces
unusual trading conditions, but a quieter period was always likely after the
strong January. We have also seen the effects of random events and of overall
political uncertainty. In the West End of London the effects of transport
disruption are particularly significant for John Lewis Oxford Street. Waitrose's
8 per cent sales increase shows its continuing strength within its market and
its ability to grow its share against the background of takeover fever in the
sector.

The one per cent increase in national insurance contribution will affect both
our costs and our customers' spending power.

However, with less disruptive development work in our department stores and new
Waitrose shops coming on stream we are well placed to continue building sales
and margin.

With consolidation high on the retail agenda, both for food retailing and in the
department store sector, we believe we are well positioned to benefit from any
opportunities that may arise.

We are focused on achieving sector leading standards in our customer offer and
further improving operational efficiency. This gives us confidence that we will
be able to meet the challenges of the year ahead.


                                    JOHN LEWIS plc

        Preliminary Estimate of Annual Results for the Year to 25 January 2003




                                                  2002/03        2001/02
                                                                                 Change
                                                       #m             #m              %
Turnover
Department stores                                 2,279.9        2,160.2              6
Waitrose supermarkets                             2,418.7        2,299.2              5
                                              -----------    -----------
                                                  4,698.6        4,459.4              5
Value Added Tax                                   (458.9)        (432.8)
                                              -----------    -----------
                                                  4,239.7        4,026.6
                                              -----------    -----------

Trading Profit before Pension costs                 266.6          252.6              6
Pension costs                                      (67.5)         (62.3)
                                              -----------    -----------
Trading Profit                                      199.1          190.3              5

Share of associate company (Ocado) loss            (19.6)         (17.8)
Share of associate company interest                 (0.7)            0.5
Net interest payable                               (33.3)         (31.5)
                                              -----------    -----------
Profit before Partnership Bonus
and taxation                                        145.5          141.5              3

Partnership Bonus                                  (67.6)         (57.3)
                                              -----------    -----------
Profit on ordinary activities
before taxation                                      77.9           84.2

Tax on profit on ordinary
activities                                         (36.7)         (37.9)
                                              -----------    -----------
Profit for the financial year                        41.2           46.3

Dividends - non-equity interests                    (0.3)          (0.3)
                                              -----------    -----------
Profit retained                                      40.9           46.0
                                              -----------    -----------
Notes

1) All 60,000 staff in the John Lewis Partnership retail group are known as
"Partners" and through the Trust share in the profits as well sharing in power
over its affairs through elected representatives. In March 2002 the Partnership
Bonus (as a proportion of pay) was set at 9%. 2) The 26 department stores across
the country range from Aberdeen to Southampton and from Bristol to Norwich. The
food group includes 140 Waitrose supermarkets in Central and Southern England
(one in Wales).

For further information contact:
Helen Dickinson, Head of Press and PR - Tel: [phone]
Helen Simmonds, Press and PR Officer - Tel: [phone]
Polly Bradshaw, Assistant Press Officer - Tel: [phone]


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