TIDMBD45
RNS Number : 6143R
Lewis(John)Partnership PLC
10 March 2016
John Lewis Partnership plc
Unaudited results for 52 weeks ended 30 January 2016
[This does not constitute a preliminary announcement]
Thursday 10 March 2016
Partners share 10% Bonus
Financial Summary
Waitrose John Lewis Partnership
52 52 52
GBPm Change week GBPm Change week GBPm Change week
change(1) change(1) change(1)
-------- -------- ---------- -------- --------- ---------- --------- --------- ----------
Gross sales 6,461.4 (0.7)% 1.1% 4,557.4 2.8% 4.4% 11,018.8 0.7% 2.5%
LFL sales(2) (1.3)% 3.1%
Revenue 6,086.0 (0.8)% 1.0% 3,662.8 2.7% 4.3% 9,748.8 0.5% 2.2%
Operating
profit
before
exceptional
items(3)(4) 232.6 (2.0)% (0.8)% 250.2 (0.1)% 0.2% 402.1 (9.1)% (7.7)%
Operating
profit(4) 531.4 18.0% 19.8%
PBT(5)
before
exceptional
items(3)(4) 305.5 (10.9)% (9.3)%
PBT(4)(5) 434.8 24.0% 26.1%
Net debt(6) 372.5 48.4%
------------- -------- -------- ---------- -------- --------- ---------- --------- --------- ----------
Highlights
-- Solid sales performance and increased market shares(7) in challenging markets
-- PBT before exceptional items down 10.9% to GBP305.5m (down
9.3% on a 52 week basis), in line with expectations; entirely due
to higher pension charges arising from volatility in the
market-driven assumptions(8) , and lower property profits -
excluding these profits up around 7%
-- Operating profit before property profits(4) up GBP8.7m (3.9%)
in Waitrose and GBP1.8m (0.7%) in John Lewis on a 52 week basis,
both impacted by a higher share of central costs as well as
restructuring costs in John Lewis. Including property profits(4) ,
operating profit down 0.8% in Waitrose and up 0.2% in John Lewis on
a 52 week basis
-- Strong cash generation driven by good cost control, lower
capital investment and the sale of the Clearings building
-- Net debt(6) of GBP372.5m, GBP349.2m (48.4%) lower than
January 2015 and consistent with our strategy of a stronger balance
sheet
-- Pension deficit of GBP941.6m, GBP307.7m (24.6%) lower than January 2015
-- Partnership Bonus of GBP145.0m; 10% of salary (equivalent to
more than 5 weeks' pay for Partners with us for the whole year)
(1) The results for 2014/15 comprised 53 weeks. To provide
meaningful comparison, 52 week changes have been provided which
exclude the impact of the additional week of 2014/15
(2) Waitrose like-for-like sales excludes petrol
(3) Exceptional income of GBP129.3m following the sale of the
Clearings building (2014/15: income of GBP7.9m from release of
remaining liabilities following the 2013/14 review of holiday pay
policy)
(4) Property profits of GBP1.5m in John Lewis (2014/15: GBP10.5m
in Waitrose, GBP2.8m in John Lewis and GBP0.9m in Group) included
in operating profit.
(5) Profit before Partnership Bonus and tax
(6) Net debt has been restated for 2014/15. See page 6 for further details
(7) Kantar 12 week Grocery data for Waitrose / BRC for John Lewis
(8) GBP48.2m of the increase in pension costs is due to the
substantial decline in the real discount rate.
Sir Charlie Mayfield, Chairman of John Lewis Partnership,
commented:
"The Partnership has delivered a healthy trading performance and
increased market shares in challenging conditions. Although Profit
before tax and exceptionals was down by 10.9% on last year, that
was entirely due to higher pension charges arising from volatility
in the market-driven assumptions, and lower property profits.
Excluding these, our profits were around 7% up on last year which,
together with a strengthening balance sheet, represents good
progress over the year.
Market conditions were challenging through the year with
deflation in grocery of -2.6%(9) and subdued demand in non-food.
Quality, value and product innovation were therefore all the more
important alongside greater convenience and service. Our Partners
performed well on all those fronts and did so while controlling
costs tightly and increasing margin.
As a result, Waitrose gained market share and grew profits(10) .
We attracted more customers while rewarding the loyalty of existing
customers through hugely popular initiatives like myWaitrose, which
now has six million members.
In John Lewis we achieved sales growth and market share gains in
Fashion, Home and Electricals and Home Technology and an increase
in profits(10) . Online sales growth(11) was especially strong at
17%, and although sales in shops(11) were down 1%, our results were
very much a result of the effective combination of shops and
online, demonstrated by the fact that more than three-quarters of
our customers made a purchase from one of our shops.
We also benefitted from the combination of John Lewis and
Waitrose. Click & collect is the most obvious demonstration of
that. It accounted for over half of all johnlewis.com deliveries
with 70% of them collected in Waitrose.
I am very pleased that 91,500 Partners will receive a Bonus of
10%, which is equivalent to more than 5 weeks' pay. Partners worked
especially hard this year coping with unpredictable patterns of
trade and the need to keep costs tight, making these results hard
won and their Bonus well deserved. Taken together with the rising
cost of pensions, the total combined cost we have set aside in our
income statement for Bonus and pensions was higher than prior
years.
Outlook 2016/17
Gross sales after the first five weeks of the current year are
up by 4.2% against last year. In grocery, the market remains
challenging, with Waitrose gross sales up 3.4% (0.4% like-for-like,
excluding petrol). In John Lewis gross sales are 5.5% higher than
last year (3.6% like-for-like).
Conditions in the market will remain difficult, especially in
grocery. However, given our continued investment in both our
operations and the customer offer, I expect sales in both Waitrose
and John Lewis to continue to perform comparatively well against
the market."
(9) ONS Food and non-alcoholic beverages CPI for 12 months to January 2016
(10) Before property profits
(11) Online returns to shops deducted from online sales
Financial Results
In 2015/16 the Partnership delivered solid sales growth. Both
Waitrose and John Lewis grew sales ahead of their respective
markets, increasing their market shares. Partnership gross sales
(inc VAT) were GBP11.02bn, an increase of GBP76.2m, or 0.7%, on
last year (2.5% on a 52 week basis). Revenue, which is adjusted for
sale or return sales and excludes VAT, was GBP9.75bn, up by
GBP47.8m or 0.5% (2.2% on a 52 week basis).
Partnership operating profit was GBP531.4m, up GBP81.2m or 18.0%
on last year (up 19.8% on a 52 week basis). This includes
exceptional income of GBP129.3m following the sale of the Clearings
building (2014/15: income of GBP7.9m from release of remaining
liabilities following the 2013/14 review of holiday pay policy).
Partnership operating profit, before exceptional items, was
GBP402.1m, down GBP40.2m or 9.1% on last year (7.7% on a 52 week
basis).
Profit before Partnership Bonus and tax was GBP434.8m, up
GBP84.2m or 24.0% on last year (up 26.1% on a 52 week basis).
Excluding exceptional items, it was GBP305.5m, down by GBP37.2m or
10.9% (down 9.3% on a 52 week basis).
Our Partners, as co-owners, each receive the same percentage of
pay as Partnership Bonus, which flexes from year to year reflecting
the performance of our business. Partners will share GBP145.0m in
profit, which represents 10% of pay or the equivalent of more than
5 weeks' pay.
Partners also continue to benefit from a number of other
benefits. In total we have invested GBP452m in benefits to our
Partners, including Partnership Bonus, pensions, Partner discount,
catering subsidy, long service leave, leisure spending and the
running of our five holiday centres.
Waitrose
As a result of effective management of costs and a focus on
efficiency throughout the business, operating profit was GBP232.6m.
This was down 2.0% (down 0.8% on a 52 week basis), but excluding
property profits it was up 2.5% (up 3.9% on a 52 week basis),
despite absorbing a greater share of centrally incurred functional
costs. This profit improvement came against a backdrop of
exceptionally tough market conditions and continuing food price
deflation, as a result of improved productivity in our branches,
reduced head office costs and operational improvements in our
supply chain.
Gross sales were down by 0.7% to GBP6.46bn (up 1.1% on a 52 week
basis), with like-for-like sales down 1.3%. We continued to
increase our market share(12) , up by 0.1 per cent to 5.5%, and
have outperformed the market on sales for 80 consecutive months. We
have also grown customer numbers and had, on average, 220,000 more
customer transactions a week compared to last year.
The UK grocery market is changing rapidly and our response to
advances in technology and the significant changes in how customers
wish to shop is to create Modern Waitrose; we made good progress
with this strategy over the last 12 months.
March 10, 2016 04:15 ET (09:15 GMT)
Net finance costs on borrowings and investments increased by
GBP8.5m (16.1%) to GBP61.3m, reflecting additional finance costs on
the GBP300m bond issued in December 2014. After including the
financing elements of pensions and long service leave and non-cash
fair value adjustments, net finance costs decreased by GBP3.0m
(3.0%) to GBP96.6m.
Sustainability
This year we established a new Board committee - the Corporate
Responsibility Committee - to take on oversight of sustainability
governance. This marks a significant step in our governance
approach by promoting a focused and considered debate of our
material sustainability issues.
At the same time we are further embedding sustainability in our
business, underlined by new targets and a deeper understanding of
our sustainability issues and impacts. We completed a review of our
approach to Human Rights and invested in additional projects in
supplier communities overseas through our Foundations. Waitrose
continued to reformulate food and drink lines, including sugar in
soft drinks, and was awarded Compassion in World Farming Retailer
of the Year Award for the fifth time. Through our carbon strategy
we are committed to increasing the energy efficiency of our
buildings - John Lewis Birmingham is designed to be our most
efficient full-line department store. Further details on our
strategy and performance can be found on
www.johnlewispartnership.co.uk/csr.html.
(14) During the year, the Directors reviewed the accounting for
certain cash in transit balances and determined that, because
outgoing payments have been instructed but not completed at the
balance sheet date, it is more appropriate to retain the associated
payables balance than to recognise an overdraft. Net debt has
therefore been restated for 2014/15.
Enquiries
For further information please contact:
John Lewis Partnership
Andrew Moys, Director of Communications 07525 272377
Katie Robson, Group Senior External Communications Manager 07764
675608
Citigate Dewe Rogerson
Simon Rigby / Jos Bieneman 020 7638 9571
John Lewis
Peter Cross, Director, Communications 07764 697674
Gillian Taylor, Head of External Communications 07919 057931
Waitrose
Christine Watts, Communications Director 07764 676414
Gill Smith, Senior Manager, Corporate PR 07887 898133
Notes to editors
The John Lewis Partnership - operates 46 John Lewis shops across
the UK, johnlewis.com, 345 Waitrose shops, waitrose.com and
business to business contracts in the UK and abroad. The business
has annual gross sales of over GBP11bn. It is the UK's largest
example of an employee-owned business where all 91,500 staff are
Partners in the business.
Waitrose - winner of the Best Supermarket(1) and Best Food and
Grocery Retailer(2) awards - currently has 345 shops in England,
Scotland, Wales and the Channel Islands, including 60 convenience
branches, and another 27 shops at Welcome Break locations. It
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. Waitrose also exports its products to 58
countries worldwide and has seven shops which operate under licence
in the Middle East. Waitrose's omnichannel business includes the
online grocery service, Waitrose.com, as well as specialist online
shops including waitrosecellar.com for wine, and
waitrosekitchen.com for cookware, utensils and kitchen gadgets.
(1) Which? Customer Survey
(2) Verdict Customer Satisfaction Awards
John Lewis - operates 46 John Lewis shops across the UK (32
department stores, 12 John Lewis at home and shops at St Pancras
International and Heathrow Terminal 2) as well as johnlewis.com.
John Lewis, 'Best Clothing Retailer 2015', 'Best Electricals
Retailer 2015' and 'Best Homewares Retailer 2015'(3) , typically
stocks more than 350,000 separate lines in its department stores
across fashion, home and technology. Johnlewis.com stocks over
280,000 products, and is consistently ranked one of the top online
shopping destinations in the UK. John Lewis Insurance offers a
range of comprehensive insurance products - home, car, wedding and
event, travel and pet insurance and life cover - delivering the
values of expertise, trust and customer service expected from the
John Lewis brand.
(3) Verdict Consumer Satisfaction Awards 2015
You can follow John Lewis on the following social media
channels:
www.johnlewis.com/twitter
www.johnlewis.com/facebook
www.johnlewis.com/youtube
John Lewis Partnership plc
UNAUDITED RESULTS FOR THE 52 WEEKS ENDED 30 JANUARY
2016
2015/16 2014/15 Change
GBPm GBPm %
GROSS SALES (including
VAT)
Waitrose 6,461.4 6,508.9 (0.7)
John Lewis 4,557.4 4,433.7 2.8
Gross sales 11,018.8 10,942.6 0.7
---------------------------------- ---------- ---------- -------
REVENUE
Waitrose 6,086.0 6,135.3 (0.8)
John Lewis 3,662.8 3,565.7 2.7
Revenue 9,748.8 9,701.0 0.5
------------------------------------- ---------- ---------- -------
OPERATING PROFIT
Waitrose 232.6 237.4 (2.0)
John Lewis 250.2 250.5 (0.1)
------------------------------------- ---------- ---------- -------
482.8 487.9 (1.0)
Partnership Services
and Group (80.7) (45.6) (77.0)
Operating profit before
exceptional item 402.1 442.3 (9.1)
Exceptional item 129.3 7.9 -
---------------------------------- ---------- ---------- -------
Operating profit 531.4 450.2 18.0
Net finance costs (96.6) (99.6) 3.0
---------------------------------- ---------- ---------- -------
Profit before Partnership Bonus
and tax 434.8 350.6 24.0
Partnership Bonus (145.0) (156.2) 7.2
---------------------------------- ---------- -------
Profit before tax 289.8 194.4 49.1
---------------------------------- ---------- ---------- -------
Profit before Partnership
Bonus, tax and exceptional
item 305.5 342.7 (10.9)
---------------------------------- ---------- ---------- -------
Notes
1. 2015/16 is a 52 week reporting period whereas
2014/15 was a 53 week reporting period.
2. This statement does not constitute a preliminary
announcement. These results are subject to audit.
The Annual Report & Accounts for 2015/16 will be
published in April 2016.
======================================================================
This information is provided by RNS
The company news service from the London Stock Exchange
END
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