TIDM45GD
RNS Number : 0954S
Lewis(John) PLC
07 March 2019
John Lewis plc announces the unaudited results for 52 weeks
ended 26 January 2019 for
John Lewis Partnership plc
John Lewis Partnership plc is the ultimate holding company of
John Lewis plc
Thursday 7 March 2019
UNAUDITED RESULTS FOR YEARING 26 JANUARY 2019
INVESTMENT PROGRAMME AND FINANCIAL STRENGTH MAINTAINED DESPITE A
CHALLENGING RETAIL MARKET
Note: A glossary of financial and non-financial terms is
included at the end of this document.
FINANCIAL OVERVIEW
2018/19 2017/18 YoY
(restated) change
GBPm GBPm
====================================== ======== =========== ========
Gross sales 11,724.1 11,609.5 1.0%
Profit before PB, tax and exceptional
items 160.0 292.8 (45.4)%
Adjusted cash flow 617.0 715.1 (13.7)%
Total net debts 2,682.2 3,083.5 (13.0)%
Revenue 10,316.7 10,215.8 1.0%
Profit before tax 117.4 107.5 9.2%
------------------------------------------ -------- ----------- --------
Cash generated from operations
before PB 609.9 668.5 (8.8)%
========================================== ======== =========== ========
Sir Charlie Mayfield, Partner and Chairman of the John Lewis
Partnership, commented: "In line with expectations set out in June,
our Partnership profits before exceptionals have finished
substantially lower in what has been a challenging year,
particularly in non-food. Operating profit recovered strongly in
Waitrose & Partners, up 18% (to GBP203.2m), mainly due to
improved gross margins. However, it was down sharply, by 56% (to
GBP114.7m), in John Lewis & Partners because of weaker Home
sales, gross margin pressure, higher IT costs, the property impact
of new shops and lower profit on asset sales. Despite this, we
managed cash tightly and reduced total net debts by GBP401.3m.
This is part of our strategy to build up our cash reserves as a
defence against uncertainty in the economy and to enable us to
maintain annual investment at GBP400m-GBP500m per year. We have
also made significant investment in our Partners during the year,
particularly in leadership development, apprenticeships and pay,
with our average hourly rate for non-management Partners rising to
GBP9.16, 17.0% above the National Living Wage. We expect that
average hourly rate of pay to increase by around 4.5% following our
April 2019 pay review.
While Partnership profits were down, there were several areas
where we have seen performance move forward, particularly in areas
where we have invested. In John Lewis & Partners the launch of
our own-brand Womenswear and expansion of personal styling offer
has driven strong sales growth in Fashion, growing market share
significantly. In addition, the investment in front line service
delivered best ever customer experience ratings in John Lewis &
Partners. In Waitrose & Partners, significant investment in
Waitrose.com, new customer smartphone apps and customer delivery
services has led to a strong increase in online grocery sales of
14%, well ahead of the market, and increased online customer
satisfaction.
The Board has awarded a Bonus at 3%. This enables us to continue
debt reduction, maintain our level of investment and retains solid
cash reserves to cope with the continuing uncertainty facing
consumers and the economy. We expect 2019 trading conditions to
remain challenging but are confident in our strategic direction and
customer offer across both brands."
STRATEGIC PROGRESS
The market context continues to be challenging. That's evident
in our results, especially in John Lewis & Partners, where we
saw near constant discounting across many categories from October
onwards in response to the combination of subdued demand, excess
retail space and some other retailers' distress.
As a result, sales in John Lewis & Partners were up 0.7%
(down 1.4% like-for-like). Weaker Home sales combined with gross
margin pressures drove around half of the reduction in profits,
with the remainder largely due to additional IT costs and property
related items.
In Waitrose & Partners we saw a 18% rebound in profits. This
was driven by like-for-like sales growth of 1.3% and improved gross
margin, which benefited from 24 range reviews, as well as stronger
operational performance and well controlled costs, especially in
the second half year.
Near-term uncertainty, politically and in the economy, is having
a major impact on consumer confidence, but we do not believe the
market conditions are cyclical. The disruption we have seen on the
High Street, including business failures and renewed interest in
mergers and acquisitions, are instead signs of an inevitable market
adjustment which will require greater clarity on whether brands are
competing on scale or difference.
The answer for the Partnership is clear and, despite tough
conditions and lower profits, this has been a year when we have
developed our brands and invested in Partners. Our difference comes
from our people, and the energy, commitment and personality they
bring to delivering excellent customer service and high quality
products to our customers. This is signalled in our rebranding and
is why we have stepped up investment so significantly in training
and capability building.
In John Lewis & Partners our strongest sales growth came in
areas where we have made the greatest investments in new product
and services. Our full range relaunch of own-brand Womenswear,
including new product, in-store concept and enhanced Partner
training, delivered sales growth of 12.9%, and the expansion of our
own-brand electricals range resulted in sales up 11.2%. In the year
ahead our furniture assortment and Menswear collections will be
completely relaunched.
In Waitrose & Partners we launched more than 5,000 new or
updated products including extensive ranges of vegetarian and vegan
products. We completed 24 range reviews from breakfast cereals and
sliced bread to meat and fish counters, removing duplication,
making the offer clearer for customers and increasing our
difference versus competitors. We are also on track to phase out
black plastic from our own-brand packaging by the end of 2019 and
have brought forward our target to make all our own-brand packaging
widely recyclable, reusable or home compostable from 2025 to 2023.
In addition, the Waitrose & Partners Foundation, which was set
up to improve the lives of the people who grow, pick and pack our
fresh produce and their communities, now operates in seven
countries, having recently expanded to Costa Rica, Senegal and The
Gambia.
In the year we stepped up our service difference. We made
several improvements to convenience, with shorter delivery windows
and live order tracking in John Lewis & Partners, opening of
additional delivery slots and trials of a rapid delivery service in
Waitrose & Partners, and trials of in-home services across both
brands. We have also introduced several added value services
including Personal Styling and Beauty Studios in John Lewis &
Partners and more Healthy Eating specialists and a new service
ambassador role in Waitrose & Partners. We achieved our highest
ever levels of customer experience ratings in John Lewis &
Partners. Our focus on customer service in Waitrose & Partners
was recognised by Which? with the publication giving it the top
position in its 2019 supermarket survey.
Greater investment in our Partners was key to this. We invested
significantly in leadership development, for over 250 of our most
senior leaders, and will extend that to many more this year. We
expanded our apprenticeship programme, with over 900 apprentices
enrolling in the year in areas such as retail, LGV driving, vehicle
maintenance, hospitality, human resources, project management and
finance. We made some of these 'open entry' to enable Partners to
apply from any part of our business. Among the apprentices that
have completed their programmes in the year, 65% passed with
distinction where that was an achievable grade. We have taken
significant steps in our aim to be the UK's Healthiest Employer
with a review of our Partner dining rooms, including the food and
drink we serve, and launching a Wellbeing Champions Network with
more than 430 Partners now recruited in more than 130 locations
across the country. Partners have accessed our market-leading
mental and physical health support services to either prevent
health issues or promote quicker recovery, saving more than 60,000
working days across the year. As we have sought to create jobs with
more opportunities for Partners to contribute more value through
greater use of skills, expertise and judgement, we have increased
pay for non-management Partners, with the average hourly rate of
base pay rising to GBP9.16, which is 17%, above the National Living
Wage. We expect that average hourly rate of pay to increase by
around 4.5% following our April 2019 pay review.
To deliver the level of distinctive difference and innovation we
need for the future requires annual investment of GBP400m-GBP500m.
We anticipated five years ago that market conditions would worsen
and took a series of connected steps to strengthen our financial
reserves to enable continued investment at this level despite lower
profits. These included changes to our pension benefit in 2014,
deprioritising investment in new physical space from 2015, and
halving the rate of bonus distribution in 2016. We have made a
number of divestments of shops and assets in the year and yesterday
we also informed Partners that five further Waitrose & Partners
shops will be sold to other retailers. We have also made
significant organisational changes including moving to single
Partnership support functions in many areas. Partner numbers have
reduced from 93,800 in January 2015 to 83,900 in January 2019. We
will take a series of further steps this year in the move to an
even more productive 'one Partnership' approach.
In response to the current economic uncertainty, we have built
up a strong liquidity position at nearly GBP1.5bn which is almost
double the level five years ago, despite having made deficit
reduction contributions of more than GBP250m to our pension fund
over the last three years, which was nearly 97% funded on an
actuarial funding basis at January 2019. We have reduced total net
debts by over GBP400m in the year and will pay, from cash, a
further GBP275m to redeem a bond that matures in April 2019.
The decision to pay a Bonus at 3% reflects our continued
commitment to sharing a proportion of profits with Partners, while
ensuring we continue to strengthen our financial position through
times of significant market uncertainty.
PROFIT AND FINANCIAL STRENGTH
As we anticipated, our Profit before PB, tax and exceptional
items was substantially lower than last year at GBP160.0m, down
GBP132.8m or 45.4%. This was principally due to the significant
operating profit decline in John Lewis & Partners, down
GBP143.1m (55.5%) to GBP114.7m, which was driven by four major
factors, each impacting profit by around a quarter of the
year-on-year decline. These were:
-- Weaker Home sales as subdued consumer confidence continued to
depress demand for big ticket and bespoke items
-- Lower gross margin. Our foreign currency hedging, from before
the EU referendum, rolled off and in spite of the resulting cost
price inflation, we decided not to increase prices. At the same
time the market became significantly more promotional and we made
sure our customers also benefited from those lower prices through
our ongoing commitment to price competitiveness and Never Knowingly
Undersold. We expect continued pressure on gross margins in 2019/20
before it rebuilds the following year.
-- Increased IT costs. Over the last few years we have steadily
increased IT investment to set ourselves up for the future. A
number of those significant new systems are now operational
resulting in incremental maintenance, support and depreciation
costs.
-- Property related. This was partly the opening and running
costs of two new shops and partly a large property profit we made
in 2017/18.
Waitrose & Partners grew operating profits by GBP31.2m
(18.1%) to GBP203.2m. This was mainly due to improved gross
margins, which benefited from the detailed work improving our
ranges for customers. That work will continue throughout 2019.
After including exceptional income of GBP2.1m (2017/18: charge
of GBP111.3m) and Partnership Bonus, our Profit before tax was
GBP117.4m, up GBP9.9m or 9.2% on last year.
We have maintained total investment at around GBP400m, with
capital investment forming the major part of that. Operating
capital investment, which excludes the acquisition of freeholds of
our trading branches, was GBP310.1m, a decrease of GBP54.3m or
14.9% on last year. However, in addition, we have invested
significantly in products and services, in leadership training, in
change costs associated with restructuring and transformation of
the business, and a greater proportion of our IT investment is
revenue investment.
We remain focused on and committed to the long-term financial
sustainability of the Partnership, building our return on capital
in order to share the rewards of this with Partners on the platform
of a strong and flexible balance sheet. We measure this through our
three annual Key Performance Indicators (KPIs): Return on Invested
Capital (ROIC), Debt Ratio and Profit per average FTE.
-- One of our priorities remains to reduce our Debt Ratio to
around three times cash flow within around five years. It has
remained at 4.3 times this year, despite lower profits, as our
total net debts have reduced by GBP401.3m to GBP2,682.2m, mainly
due to the reduction in the accounting pension deficit of GBP218.4m
(net of deferred tax) and strong cash generation. The reduction in
the accounting pension deficit principally reflects an improvement
in the real discount rate used to value the liabilities and an
increase in pension fund assets. Our pension review is still
progressing with any changes to our future pension benefit expected
to be agreed in the first half of 2019.
-- Our ROIC, 7.3% (2017/18: 9.1%) and Profit per average FTE,
GBP5,000 (2017/18: GBP6,900) measures are significantly lower than
2017/18, reflecting the substantially lower profits. The actions we
are taking are aimed at restoring ROIC and Profit per average FTE
Partner to levels that will support increased investment and
improved Bonus levels over the medium term, while maintaining a
robust balance sheet position.
OUTLOOK
We have been preparing for the operational implications of
Brexit for well over a year, and are in a good position for a
managed transition. This covers currency, tariffs, customs and
labour. The main risk in an unmanaged transition is a strong fall
in consumer confidence and the impact that has on trade. Given the
current level of uncertainty, we expect 2019 trading conditions to
remain challenging. We have built up a strong liquidity position at
nearly GBP1.5bn so that we have the financial headroom to mitigate
the risks and make sure we can continue investing for the
future.
The Partnership will adopt IFRS 16 'Leases' for the financial
year beginning 27 January 2019, which specifies how to recognise,
measure, present and disclose leases. The Partnership has adopted
the modified retrospective approach on transition. While there is
no change in the underlying economics of our business, the adoption
of IFRS 16 will significantly reduce our Partnership profit before
tax and exceptional items and significantly increase our reported
assets and liabilities. It is, however, expected to have no impact
on our Debt Ratio as that already reflects an adjustment to include
the present value of future rentals payable under operating leases.
It will also have no impact on our cash flow.
EVENTS AFTER THE BALANCE SHEET DATE
On 30 January 2019, Waitrose & Partners announced changes to
the Commercial operating model in head offices. No accounting for
potential redundancies was recorded for the year ended 26 January
2019 in respect of these changes.
On 27 February 2019, Waitrose & Partners confirmed that
following careful review of the relationship the commercial
arrangement with Ocado will come to an end in September 2020, in
line with contractual terms. We have strengthened our own online
business significantly in recent years, and said last summer that
we will double waitrose.com within five years. This change will be
a major part of achieving this, and in future, waitrose.com and our
shops will be the exclusive places in the UK to buy Waitrose &
Partners products. We plan to open a second fulfilment centre to
support growing volumes in the London area.
On 6 March 2019, Waitrose & Partners informed Partners that
five shops will be sold to other retailers. No accounting for
potential redundancies was recorded for the year ended 26 January
2019 in respect of these shop disposals.
UNAUDITED RESULTS FOR THE 52 WEEKSED 26 JANUARY 2019
2018/19 2017/18 Change
(restated) %
GBPm GBPm
============================================ ========= ============ =======
GROSS SALES (including VAT)
Waitrose & Partners 6,835.0 6,753.7 1.2
John Lewis & Partners 4,889.1 4,855.8 0.7
============================================ ========= ============ =======
Gross sales (including VAT) 11,724.1 11,609.5 1.0
============================================ ========= ============ =======
REVENUE
Waitrose & Partners 6,429.5 6,354.7 1.2
John Lewis & Partners 3,887.2 3,861.1 0.7
============================================ ========= ============ =======
Revenue 10,316.7 10,215.8 1.0
============================================ ========= ============ =======
OPERATING PROFIT (before PB and exceptional items)
Waitrose & Partners 203.2 172.0 18.1
John Lewis & Partners 114.7 257.8 (55.5)
Group (90.9) (65.4) (39.0)
Operating profit before PB and exceptional
items 227.0 364.4 (37.7)
Exceptional items 2.1 (111.3) n/m
============================================ ========= ============ =======
Operating profit before PB 229.1 253.1 (9.5)
Net finance costs (67.0) (71.6) 6.4
============================================ ========= ============ =======
Profit before PB and tax 162.1 181.5 (10.7)
Partnership Bonus (44.7) (74.0) 39.6
============================================ ========= ============ =======
Profit before tax 117.4 107.5 9.2
============================================ ========= ============ =======
Profit before PB, tax and exceptional
items 160.0 292.8 (45.4)
============================================ ========= ============ =======
Notes
1. These results are subject to audit. The Annual Report &
Accounts 2019 will be published in April 2019.
2. Like-for-like sales up 1.3% in Waitrose & Partners and
down 1.4% in John Lewis & Partners.
==============================================================================
ADDITIONAL FINANCIAL INFORMATION
Exceptional items
Exceptional income totalled GBP2.1m (2017/18: charge of
GBP111.3m) with GBP4.0m charge in Waitrose & Partners (2017/18:
GBP52.2m), GBP22.1m charge in John Lewis & Partners (2017/18:
GBP21.3m) and GBP28.2m income in Group (2017/18: charge of
GBP37.8m). Further detail is included in the following table:
2018/19 2017/18
GBPm GBPm
================================================= ======= =======
Strategic restructuring and redundancy
programmes
Head office review (a) (19.3) (40.5)
Physical estate (b) (5.1) (5.5)
Shop operations (c) (6.7) (29.2)
Branch impairments (d) (12.6) (35.7)
John Lewis & Partners supply chain (e) 0.5 (3.1)
Pay provision (f) 30.3 -
Legal settlement (g) 15.0 -
Profit on disposal of item previously recognised
as exceptional (h) - 2.7
2.1 (111.3)
================================================= ======= =======
a) Net charge of GBP19.3m (2017/18: GBP40.5m) for redundancy
costs, project costs and onerous contracts in relation to
restructuring of pan-Partnership functions and other head office
operations.
b) Net charge of GBP5.1m (2017/18: GBP5.5m) for asset
impairments, accelerated depreciation, closure and redundancy costs
for our existing physical estate.
c) Net charge of GBP6.7m (2017/18: GBP29.2m) for redundancy
costs and project costs in relation to restructuring of our shop
operations.
d) Following the signing of a lease contract, a charge of
GBP12.6m has been recorded in relation to branch impairment in John
Lewis & Partners. In 2017/18 there was a charge of GBP35.7m for
branch impairments in Waitrose & Partners.
e) In 2016/17, a review of the John Lewis & Partners supply
chain led to significant redundancy and restructuring costs which
were recognised as exceptional. During the year to January 2019, a
small credit of GBP0.5m (2018: GBP3.1m charge) has been recognised
as actual costs incurred have been smaller than anticipated.
f) In 2016/17, a GBP36.0m provision was recorded as an
exceptional charge to cover the potential costs of complying with
the National Minimum Wage Regulations. During the year, the
methodology for calculating the liability has been clarified and
discussions with HMRC have completed resulting in a GBP30.3m (2018:
GBPnil) release of the provision. Rectification payments have been
made.
g) In September 2018, the Partnership reached a settlement in
relation to an ongoing legal dispute, receiving income of
GBP15.0m.
h) In 2017/18, income of GBP2.7m was recognised on finalisation
of a property disposal which was previously recognised as
exceptional.
Further disclosure on the strategic restructuring and redundancy
programmes will be included in the Annual Report & Accounts
2019 which will be published in April 2019.
Net finance costs
Net finance costs decreased by GBP4.6m reflecting (i) lower
pension finance costs due to a lower accounting pension deficit and
nominal discount rate used to determine the finance cost at the
beginning of the year compared to the beginning of the previous
year, as well as early payment of contributions, (ii) lower long
leave finance costs arising from volatility in market driven
assumptions, and (iii) higher interest receivable on cash deposits,
partly offset by (i) fair value losses on foreign currency purchase
commitments, (ii) incremental finance costs on the GBP125m new debt
raised in the second half of the year, and (iii) a reduction in the
level of borrowing costs capitalised for qualifying assets.
ENQUIRIES
For further information please contact:
John Lewis Partnership
Simon Fowler, Partner & Director of Communications, 07710
398460
Clayton Hirst, Partner & Group Head of Corporate Affairs,
07947 708167
Sarah Henderson, Partner & Group Senior External
Communications Manager, 07764 676036
Citigate Dewe Rogerson
Simon Rigby, Joint Managing Director, 07771 784446
Jos Bieneman, Director, 07834 336650
Ellen Wilton, Associate Director, 07921 352851
John Lewis & Partners
Gillian Taylor, Partner & Head of Communications, 07919
057931
Emily Dimmock, Partner & Senior Communications Manager,
Corporate, 07712 545677
Waitrose & Partners
Graeme Buck, Partner & Head of Communications, 07703
379561
Gill Smith, Partner & Senior Corporate PR Manager, 07887
898133
Debt investors
Lynn Lochhead, Partner & Head of Treasury & Corporate
Finance, 07834 770684
GLOSSARY OF FINANCIAL AND NON-FINANCIAL TERMS
This glossary gives an explanation of financial and
non-financial terms included in the results statement
TERM DEFINITION
========================================================================
Above market These are Partner benefits which are higher than
reward those typically paid by our competitors, as a result
of the Partnership model. Above market rewards principally
includes pensions, long leave, Partner discount
and costs of our democracy. This measure is important
for adjusting our financial Key Performance Indicators
(KPIs) to be able to assess them against our competitors.
===================== ========================================================================
Adjusted cash Operating profit before PB, exceptional items, depreciation,
flow amortisation and average one year lease payments,
but after lease adjusted interest and tax. This
measure is important to assess our Debt Ratio.
2018/19 2017/18
GBPm GBPm
Operating profit before PB
and exceptional items 227.0 364.4
add back:
Depreciation,amortisation and
write-offs 414.4 398.5
Average one year lease payments 190.7 186.1
less:
Lease adjusted interest (175.9) (184.8)
Tax (39.2) (49.1)
-------- --------
Adjusted cash flow 617.0 715.1
-------- --------
===================== ========================================================================
Average NMP hourly Average non-management Partner hourly pay for Partners
rate of pay on permanent contracts and aged 18 years old and
over
===================== ========================================================================
Capital investment Cash outflows in relation to additions to tangible
fixed assets (property, plant, and equipment), and
intangible assets (IT software) recognised on the
balance sheet
===================== ========================================================================
Debt Ratio Comparison of our Total net debts to Adjusted cash
flow. This measure is important as it provides an
indication of our ability to repay our debts.
2018/19 2017/18
GBPm GBPm
Total net debts 2,682.2 3,083.5
Adjusted cash flow 617.0 715.1
Debt ratio 4.3 4.3
===================== ========================================================================
Exceptional items Items of income and/or expense which are significant
by virtue of their size and nature are presented
as exceptional items. The separate reporting of
exceptional items helps to provide an indication
of the Partnership's underlying business performance.
===================== ========================================================================
Full-time equivalent The hours worked by one Partner on a full time basis.
(FTE) The concept converts the hours worked by several
part-time Partners into the hours worked by full-time
Partners to enable like-for-like comparisons of
resource
===================== ========================================================================
Gross sales Total sales of goods and services including sale
or return sales and VAT, net of Partnership discount
2018/19 2017/18
GBPm GBPm
Gross sales 11,724.1 11,609.5
less:
Sale or return sales (259.0) (254.6)
Value added tax (1,148.4) (1,139.1)
---------- ----------
Revenue 10,316.7 10,215.8
---------- ----------
===================== ========================================================================
Like-for-like Comparison of sales between two periods in time
(LFL) sales (e.g. this year to last year), removing the impact
of branch openings and closures. Waitrose & Partners
like-for-like sales excludes fuel
===================== ========================================================================
Liquidity The cash and undrawn committed credit facilities
we have available to us, which we can use to settle
liabilities as they fall due
===================== ========================================================================
Market comparator John Lewis & Partners - British Retail Consortium
(BRC) market.
Waitrose & Partners - Kantar Worldpanel
===================== ========================================================================
n/m Not meaningful
===================== ========================================================================
Non-management Level 9 and Level 10 Partners, excluding Assistant
Partners (NMP) Section Managers in Waitrose & Partners
===================== ========================================================================
PB Partnership Bonus
===================== ========================================================================
Profit per average Profit before PB and exceptional items but after
FTE tax, adjusted for above market reward, divided by
the average number of full-time equivalent Partners.
This measure is important as it provides the best
indication of Partner productivity. Our 2017/18
measure has been restated to adjust for above market
reward.
2018/19 2017/18
GBPm GBPm
Profit before PB, tax and exceptional
items 160.0 292.8
Tax (39.2) (49.1)
Above market reward 183.3 174.8
-------- --------
304.1 418.5
-------- --------
Average FTEs 60,800 60,600
Profit per average FTE (GBPk) 5.0 6.9
===================== ========================================================================
Restated The Partnership adopted IFRS 15 'Revenue from Contracts
with Customers' from 28 January 2018 using a fully
retrospective approach. The main impact is in respect
of the timing of revenue recognition of free service
guarantees in John Lewis & Partners, principally
for certain electrical products. The impact on the
prior year financial statements was disclosed in
the Partnership's Unaudited condensed Interim Financial
Statements for the half year ended 28 July 2018
published on 13 September 2018.
===================== ========================================================================
Return on invested Operating profit before PB and exceptionals, adjusted
capital (ROIC) for above market rewards, a notional interest on
leases (at a 5% interest rate on lease liabilities)
and a notional tax charge (at the statutory marginal
tax rate for the year), as a proportion of average
operating net assets, adjusted to reflect the value
of leased assets. This is important because it demonstrates
how effectively we are utilising our assets. Our
2017/18 measure has been restated to adjust for
above market reward.
2018/19 2017/18
GBPm GBPm
Operating profit before PB
and exceptional items 227.0 364.4
Above market rewards 183.3 174.8
Notional interest on leases 105.1 104.1
Notional tax (97.9) (123.5)
-------- --------
417.5 519.8
-------- --------
Net assets 2,620.0 2,301.7
add back:
Borrowings and overdrafts 1,047.2 936.8
Finance lease liabilities 21.1 23.3
Pension deficit (net of deferred
tax) 404.7 623.1
Present value of operating
leases 2,076.4 2,126.2
Operational cash 479.8 453.0
less:
Cash and short term investments (982.2) (762.2)
-------- --------
Operating net assets 5,667.0 5,702.1
-------- --------
Average operating net assets 5,684.5 5,721.5
ROIC 7.3% 9.1%
===================== ========================================================================
Revenue investment Investment spend recognised directly in the income
statement
===================== ========================================================================
Total net debts The Partnership's borrowings and overdrafts, finance
lease liabilities and derivative financial instruments,
IAS 19 pension deficit net of deferred tax, and
the present value of future rentals payable under
operating leases calculated using a 5% discount
rate, less any liquid cash, short-term deposits
and investments.
2018/19 2017/18
GBPm GBPm
Borrowings and overdrafts 1,047.2 936.8
Finance lease liabilities 21.1 23.3
Derivative financial instruments 2.5 18.6
Pension deficit (net of deferred
tax) 404.7 623.1
Present value of operating
leases 2,076.4 2,126.2
Liquid cash, short-term deposits
and investments (869.7) (644.5)
-------- --------
Total net debts 2,682.2 3,083.5
-------- --------
===================== ========================================================================
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END
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