TIDM45GD
RNS Number : 9256L
Lewis(John) PLC
16 September 2021
John Lewis plc
16 September 2021
These results are for John Lewis plc only and do not represent
the results for John Lewis Partnership plc which can be found on
the John Lewis Partnership website or at
www.johnlewispartnership.co.uk/financials.html
A glossary of financial and non-financial terms is included at
the end of this document.
JOHN LEWIS PLC UNAUDITED RESULTS
FOR THE HALF YEARED 31 JULY 2021
Dear Partner,
I want to thank you for your extraordinary efforts over the past
six months. Throughout the course of the pandemic, Partners have
stepped up - going above and beyond to deliver exceptional service
to our customers and supporting one another.
We are in year one of our five-year Partnership Plan to return
the business to sustainable profit of GBP400m a year, the level of
profit required to meet our ambitions for customers, Partners and
communities. This half year, we have had to take difficult but
necessary decisions to reduce costs and improve our
competitiveness.
We have closed eight John Lewis stores and are consulting on the
closure of an associated delivery hub. The number of head office
roles have been reduced and we are consulting on plans to have
fewer managers in John Lewis and Waitrose. This has been painful
for the Group. Eighty per cent of affected Partners have found new
roles in the Group in the half, while retraining support has been
available to Partners to secure work outside. We are also creating
new jobs: a total of 500 next year to operate our new warehouse at
Fenny Lock. We have faced our biggest ever test and we will come
through stronger. That is because we are a Partnership and we are
invested in our collective success.
Our financial performance in the first half year shows
encouraging progress against the Partnership Plan.
Half year results
As at full year, we report our profits using two measures -
before and after exceptional items. Measuring our profits without
these exceptional items gives a better indication of our underlying
performance.
For the first six months of the year, our profit before
exceptional items ([1]) was GBP69m. That is GBP124m up on 2020/21,
when the Group made a loss ([2]) of GBP55m. Last year's results
were, of course, heavily affected by the pandemic. Therefore
2019/20 is a more meaningful benchmark. Compared to the first half
of 2019/20 when we made a loss(2) of GBP52m, profit is up GBP121m.
Cost reduction is a key priority and we made savings of GBP66m in
the first half. We received business rates relief of GBP58m ([3])
.
The Group had exceptional costs of GBP98m in the half, for two
main reasons. First, property costs of GBP24m, principally to
settle lease obligations arising from John Lewis shop closures.
Second, redundancy costs of GBP54m from restructuring, reflecting
our commitment to ensure proper support for Partners leaving the
Group. These upfront costs will help to drive an annual reduction
in costs of GBP300m by the end of 2022/23, improving our
competitiveness and freeing money to invest in growth.
Including these exceptional items, the Group made a loss before
tax of GBP29m. This is a significant improvement on last year's
loss before tax of GBP635m, which was dominated by a write down in
the value of John Lewis stores. This year is down on the first half
of 2019/20 when profit before tax was GBP192m because of a one-off
gain from the closure of the defined benefit pension scheme.
GBPm 2021/22 2020/21 2019/20* Better/ Better/
(worse) (worse)
than 20/21 than 19/20
------- -------
Profit/(loss) before Partnership
Bonus, tax and exceptional
items (PBTBE) 69 (55) (52) 124 121
Exceptional items (98) (580) 244 482 (342)
(Loss)/profit before tax (29) (635) 192 606 (221)
---------------------------------- ------- ------- -------- ----------- -----------
* 2019/20 is also presented due to the unusual nature of
2020/21.
Underpinning the growth in profit was a 6% increase in sales
([4]) across the Group. In detail:
Waitrose continued its positive momentum with 2% sales(4) growth
(like-for-like up 4%) on last year and up 10% on 2019/20. This was
largely driven by online growth as we increased capacity in our
shops and delivery fleet and through a new fulfilment centre in
Greenford, West London, to meet rising demand. Our partnership with
Deliveroo expanded from 40 to 150 shops with a potential reach of
up to 13m customers. It is already generating sales of almost GBP1m
a week and attracting younger customers.
Online sales now stand at 17%, up from 11% a year ago but back a
bit from 20% in March this year. Waitrose was the only supermarket
in growth and was the fastest growing online supermarket since the
pandemic began, according to Kantar. ([5]) Customer service remains
high with Waitrose winning Grocer magazine's Gold 33 Award.
A combination of pandemic-related costs and growth of online has
diluted operating margins. We are addressing this through
investment in stock management systems, delivery charging and other
efficiencies.
We are making good progress in exploiting the potential of our
two brands to work closer together giving our customers more
choice. All general merchandise sold in Waitrose will be sourced by
John Lewis in time for Christmas. 17 Waitrose stores now have a
dedicated, redesigned John Lewis space, and that number will be
approximately 40 by the end of the year. Sales in these stores are
higher and customer reaction has been very positive. We are also
launching joint ranges for the first time, and have begun with the
Levantine Table, which brings together Waitrose food and drink with
John Lewis homeware with a Middle Eastern theme.
John Lewis saw strong sales(4) growth in the first half: up 12%
on last year (like-for-like up 13%). Pleasingly, this was slightly
up by 1% on 2019/20 (like-for-like up 11%). Almost 75% of sales
were online in the first half, broadly the same as last year, and
significantly up on pre-pandemic levels (40%).
Margins also rebounded strongly against last year as we returned
to a more balanced pattern of trade: fewer laptops, more lamps and
linen sales. Technology sales were flat year on year while growth
was strong in Home (up 23%), Fashion (up 22%) and Nursery (up 18%).
Compared to 2019/20, margins remained subdued as sales in lower
margin categories remained higher than before the pandemic and
inflationary pressures in global freight pushed up costs.
In Home, we launched ANYDAY, our new own brand that combines
John Lewis' long admired quality with style and value for money. It
has been our most successful own brand launch ever for a Spring
season with GBP56m of sales in the half. We announced plans to
introduce 90 new Fashion and Beauty brands, and invested
significantly in Nursery with the launch of our own brand travel
range and launch of post-birth consultations.
Customers are returning to stores typically for larger, more
considered purchases such as furniture and beds, and 'take with
you' items like stationery and gifts, but so far not in the same
numbers as before the pandemic. For the period that our shops were
open this year, like-for-like sales ([6]) compared to two years ago
were around 20% lower. City centres have been harder hit than
retail parks and standalone stores. John Lewis continues to rank
highly with customers as the highest rated retailer in the July
2021 UK Customer Satisfaction Index.
As part of our Partnership Plan, we are seeking to grow our
profits beyond retail in areas where the brand is trusted, margins
are higher and customer demand is strong. Following the relaunch of
home insurance and the roll out of point of sale credit for the
first time online in the first half, in August John Lewis Financial
Services launched its first investment products in partnership with
Nutmeg, the digital wealth manager. They are particularly intended
for people who are considering taking the first step into
investing.
Partnership responsibilities
As a Partnership, we measure our success not just by our
commercial performance but by the contribution we make to our
Partners' lives and to the wider community. As our commercial
performance recovers, we will be able to do more on both
fronts.
Investing in our Partners: Clearly, it has been a tough year for
Partners but we are also investing. From November this year,
Partners will be able to take six months' paid parental leave and
time off for pregnancy loss, a benefit offered by no other
retailer. Where possible, all roles are now advertised with
flexible working. In the lead up to Christmas, Partners will be
able to eat for free at work and will receive a higher discount at
Waitrose. We want Partners to be proud of the benefits we offer and
as a Partnership we are gathering views as to how best to ensure
our package remains up to date and valued. At our April pay review,
the Group invested GBP54m into pay resulting in 28,000 more
Partners being paid the voluntary real living wage, taking the
proportion from 47% to 81%. Today, the average rate of pay for a
Partner who is not a manager is now GBP10.32. We want to pay the
voluntary real living wage to all Partners and last year pledged
that we would do so when our profits recover to GBP200m.
Wider community: We are cutting waste in our own operations and
helping customers to do the same. From 27 September, we will no
longer sell 10p bags for life in Waitrose and all online grocery
deliveries will be bagless. Waitrose 'Unpacked' - which offers
customers refillable solutions to help cut out plastics - has been
expanded with 13 new lines. Over the next four years Waitrose
customers will have access to 800 electric vehicle charging points
in 100 of our shops through our growing collaboration with Shell.
John Lewis customers can now rent over 350 furniture lines,
including ANYDAY, through our tie-up with Fat Llama, and hundreds
more lines will be added this month. We made GBP2.5m in charitable
donations this half year and also launched trials with Essex County
Council and The Prince's Trust to help care leavers into
employment.
Outlook
Our focus for the second half will be execution of the
Partnership Plan: delighting our customers with unrivalled products
and service (online and in store) and giving them the best possible
Christmas. Second half highlights include:
-- Autumn/Winter expansion of ANYDAY to include Men's, Women's and Children's Fashion;
-- Relaunching the MyJL app to improve rewards for customers;
-- Expanding areas dedicated to John Lewis within Waitrose to
approximately 40 shops by early 2022;
-- 10 new Christmas emporiums (one-stop Christmas shops offering
inspirational experiences, including in-store events and workshops)
in John Lewis and over 100 new Christmas lines in Waitrose;
-- A bigger Waitrose Levantine Table range and new
vegan/vegetarian own brands - Plant Life and GoVeggie.
We have begun the financial year with profits recovering, ahead
of both last year and expectations set at our year end results.
Traditionally, our profits are skewed to the second half of the
year because of the importance of Christmas, especially in John
Lewis. As we look ahead, there is significant uncertainty. Like the
whole of retail, we are managing global supply chain challenges and
labour shortages. We are seeing inflationary pressures, which we
expect to persist.
We are taking a raft of measures to mitigate these risks and
deliver Christmas for our customers. These include a successful
campaign to recruit drivers, offering competitive salaries and
benefits, recruiting 7,000 temporary seasonal roles and booking
additional freight to make sure John Lewis Christmas products
arrive on time.
Given the back ended nature of our trading year, we do not
generally provide an outlook. And this year we face additional
uncertainty. Even with the success of the vaccination programme the
course of the pandemic this winter is hard to call. As we set out
in March, we retained business rates relief under the original
Government scheme to see the Group through the pandemic and avoid
further job losses. We also said in March that we would keep under
review whether to retain business rates relief under the extended
scheme. We will take a decision at year end.
The conditions for paying a bonus to Partners - sustainable
profits of GBP150m and net debts of less than four times our
earnings - were set by the Board in September 2020 and remain in
place. The Board will take a decision on whether to award a bonus
for 2021/22 in the usual way in March 2022.
Thank you for your continued commitment to our business and to
one another. We will come through stronger.
Sharon White
Partner and Chairman
JOHN LEWIS PLC UNAUDITED HALF YEAR RESULTS 2021/22 - DETAIL
Market context
Retail in the UK is showing signs of recovering from the
pandemic but the pre-pandemic structural changes to the retail
industry continue - such as pressure on margins, declining
footfall, increased demand for online shopping plus operational
cost inflation running ahead of sales growth in a number of areas.
Added to new economic and supply chain challenges, these factors
reinforce the need to press on with the delivery of our Partnership
Plan, to become a thriving Partnership, loved by Partners and
customers.
INTERIM FINANCIAL PERFORMANCE TO 31 JULY 2021
Click or paste the following link into your web browser to view
the graph titled 'H1 Profit/(loss) before Partnership Bonus, tax
and exceptionals (GBPm)'. Refer to page 6 for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
Note: The chart shows our Profit/(loss) before Partnership
Bonus, tax and exceptionals since 2016/17, with 2019/20 shown twice
as that is the year we adopted IFRS 16 (lease accounting standard)
which reduced our profits that year by GBP26m. The period from
2016/17 to 2019/20 is shown before the adoption of IFRS 16, and
2019/20 and 2020/21 are shown after the adoption of IFRS 16.
Profit
GBPm 2021/22 2020/21 2019/20* Better/ Better/
(worse) (worse)
than 20/21 than 19/20
------- -------
Profit/(loss) before Partnership
Bonus, tax and exceptional
items (PBTBE) 69 (55) (52) 124 121
Exceptional items (98) (580) 244 482 (342)
(Loss)/profit before tax (29) (635) 192 606 (221)
---------------------------------- ------- ------- -------- ----------- -----------
* 2019/20 is also presented due to the unusual nature of
2020/21.
Sales
GBPm 2021/22 2020/21 2019/20* Change Change
% vs 20/21 % vs 19/20
-------- --------
Total trading sales 5,874 5,567 5,505 +6% +7%
Revenue 5,153 4,919 4,788 +5% +8%
---------------------- -------- -------- --------- ------------ ------------
* 2019/20 is also presented due to the unusual nature of
2020/21.
Profitability
Before exceptionals, the Group made a profit ([7]) of GBP69m,
which was up GBP124m on last year. Last year's results were, of
course, heavily affected by the pandemic. Therefore 2019/20 is a
more meaningful benchmark. Compared to the first half of 2019/20
when we made a loss ([8]) of GBP52m, profit is up GBP121m. The
shape of the profit movement is very different between the two
comparisons.
Compared to the half year results for 2020/21, our PBTBE
improvement of GBP124m is due to a number of factors:
-- Improved sales performance, with John Lewis sales ([9]) up
12% on last year and Waitrose up 2%. This uplift in sales led to an
improvement in trading operating profit of GBP40m;
-- Cost reduction activity towards the GBP300m target by the end
of 2022/23 set in the Partnership Plan delivered GBP66m improvement
in profit. This resulted from efficiencies achieved within cost of
goods sold, operating cost reductions and restructuring
activity;
-- Depreciation costs GBP13m lower as a result of the write down
of John Lewis stores recorded last year, and pension costs GBP8m
lower following the closure of our defined benefit pension scheme
in April 2020 leading to additional benefits through the first
quarter of this year;
-- Direct operational costs of the pandemic at GBP8m were GBP41m
lower this year, as costs in areas like PPE reduced substantially
this year;
-- Offsetting the lower direct operational costs, we received
GBP44m less in Government support this year as we stopped claiming
under the Coronavirus Job Retention Scheme in July 2020.
Click or paste the following link into your web browser to view
the graph titled 'Year on year profit bridge (GBPm)'. Refer to page
8 for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
*GBP41m of this cost reduction benefit is reported later in this
statement within trading operating profit. Our total reported
increase in trading operating profit of GBP81m (an increase of
GBP142m in John Lewis and a decline of GBP61m in Waitrose) consists
of the GBP40m trading operating profit increase shown above, plus
GBP41m of benefits that have been included within cost
reduction.
Compared to 2019/20, our PBTBE has improved by GBP121m due
to:
-- Cost reduction activity delivered GBP66m improvement in profit;
-- Depreciation costs GBP30m lower as a result of the write down
of John Lewis stores recorded last year and pension costs GBP30m
lower following the closure of our defined benefit pension scheme
in April 2020;
-- We received GBP58m in Government support via business rates
relief this year, including GBP23m in the Government's original
scheme and GBP35m in the extension of the scheme from April to
June. This was not available prior to the pandemic;
-- This support helped to offset the impact of John Lewis
department store closures, which were closed for 10 weeks in the
first half (open for the full half in 2019/20), which weakened
trading operating profit by GBP36m, and direct ongoing costs of
GBP8m;
-- Our technology costs increased by GBP22m, a combination of
increased running costs for new technology and transitional costs
as we transfer parts of our IT operations to managed service
providers.
Click or paste the following link into your web browser to view
the graph titled 'Year on 2 year profit bridge (GBPm)'. Refer to
page 9 for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
*GBP41m of this cost reduction benefit is reported later in this
statement within trading operating profit. Our reported increase in
trading operating profit of GBP5m (an increase of GBP10m in John
Lewis and a decline of GBP5m in Waitrose) consists of the GBP36m
trading operating profit decrease shown above, plus GBP41m of
benefits that have been included within cost reduction.
The table below sets out the first half financial headlines for
our brands. We report trading operating profit for each brand,
which excludes costs that are centrally managed for the Group as a
whole, such as property, IT and head office costs, investment spend
and depreciation.
Waitrose John Lewis
----------------------------------------- -----------------------------------------
% vs % vs % vs % vs
2021/22 2020/21 2019/20 20/21 19/20 2021/22 2020/21 2019/20 20/21 19/20
------------------ ------- ------- ------- ------ ------ ------- ------- ------- ------
Total trading
sales (GBPm) 3,792 3,707 3,446 +2% +10% 2,082 1,860 2,059 +12% +1%
Revenue (GBPm) 3,515 3,440 3,176 +2% +11% 1,638 1,479 1,612 +11% +2%
Trading operating
profit (GBPm) 525 586 530 (10)% (1)% 295 153 285 +93% +4%
Trading operating
profit (%) 13.8% 15.8% 15.4% 14.2% 8.2% 13.8%
------------------- ------- ------- ------- ------ ------ ------- ------- ------- ------ ------
In Waitrose, total sales ([10]) grew at 2% (like-for-like up 4%)
- up 10% on 2019/20 - as customer demand held up well, benefiting
from the ongoing closure of much of the hospitality sector and
online capacity growth as we responded to customer behaviour
shifts. A combination of pandemic-related costs and growth of
online has diluted operating margins. This resulted in a decline in
trading operating profit of GBP61m, down 10%.
Top sellers for the period included ready meals and food-to-go
as customers started to return to offices and looked for easy meal
options as well as flowers and houseplants, champagne and sparkling
wine, as they continued to treat themselves at home.
In John Lewis, we saw sales ([11]) growth of 12% (like-for-like
up 13%) with the strength of online helping to offset lost trade
from John Lewis shops being closed for 10 weeks in the first half
and permanent shop closures. We saw a more balanced shopping basket
than in the prior year as sales in H1 shifted towards Home and
Fashion after a high Technology mix in 2020/21 and as customers
have started to go out more while continuing to care for and invest
in their homes. This helped margins recover significantly this
half. The combination of stronger sales, better margins and lower
operating costs this year helped trading operating profit grow
GBP142m, up 93% in the half, bouncing back to 2019/20 levels.
Top sellers for the period include fashion items such as
outerwear and dresses, premium jewellery, and baby car seats.
Popular products include the Theragun massage device, Mulberry
handbags and AirPods as customers looked for ways to treat
themselves.
Click or paste the following link into your web browser to view
the graph titled 'John Lewis sales - category mix %'. Refer to page
10 for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
This year has not been without operational challenges. We
started the year with our John Lewis shops closed for the first 10
weeks of our financial year due to the lockdown. For the period of
lockdown, our John Lewis Partners once again stepped in to support
Waitrose with up to 4,500 Partners re-deployed into our
supermarkets during those weeks.
Like the whole of retail, we are managing global supply chain
challenges and labour shortages. We are seeing inflationary
pressures, which we expect to persist. We are taking a raft of
measures to mitigate these risks and deliver Christmas for our
customers. These include a successful campaign to recruit drivers,
recruiting 7,000 temporary seasonal roles, offering competitive
salaries and benefits and booking additional freight to make sure
John Lewis Christmas products arrive on time.
Loss before tax
Our loss before tax, which is after exceptional costs, was
GBP29m. This compares to a loss before tax of GBP635m the previous
year. Exceptional costs totalled GBP98m (2020/21: exceptional costs
of GBP580m), principally relating to:
-- GBP97m of restructuring and redundancy costs from eight John
Lewis store closures, our proposed Shop Leadership Transformation,
the proposed closure of our Uckfield customer delivery hub and an
updated view on the expected costs of our Head Office
Transformation;
-- GBP1m net charge of our impairment provision for the John
Lewis stores. Further details are included in Note 4 to the interim
financial statements.
Exceptionals (GBPm) 2021/22 2020/21
-------
Strategic restructuring and redundancy programmes (97) (118)
Store impairments - Waitrose - 9
Store impairments - John Lewis (1) (471)
(98) (580)
-------------------------------------------------- -------
Cash and Liquidity
We continue to manage cash prudently given the uncertain
environment. Our liquidity at the half year remains strong, with
GBP1.4bn cash, including short-term investments of GBP0.4bn, and
undrawn bank facilities of GBP0.5bn. This position is required to
deliver the Partnership Plan and meet our obligations; we carry
GBP1.7bn of total net debts including pension and leases, with
GBP0.5bn of financial borrowings due to be repaid in the next four
years (GBP200m of bank term loans maturing between November 2022
and December 2023 and a GBP300m bond maturing in January 2025). It
also ensures that there is adequate funding available to withstand
material volatility in trading, particularly important to the Group
as we do not have access to equity markets owing to our model.
During the first half, we repaid a GBP75m bank term loan
(originally due in November 2021) and GBP300m of the Covid
Corporate Financing Facility in the second half of last year.
At half year, we do not report a debt ratio. This is consistent
with previous years and reflects the seasonality of performance in
the second half, particularly within John Lewis.
Click or paste the following link into your web browser to view
the graph titled 'Liquidity - GBPm'. Refer to page 11 for this
graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
Pensions
Our accounting pension deficit reflects the gap between the
market value of pension assets held by our defined benefit scheme
and our pension liabilities which is an estimate of the expected
pension payments to be made to current and future pensioners in
today's money. The deficit is highly sensitive to changes in
financial and demographic assumptions, particularly changes in
interest rates, as well as to returns on pension investments.
As at July 2021, the accounting pension deficit before deferred
tax was GBP164m, compared to GBP647m in January 2021. The
improvement of GBP483m is mainly due to higher market values for
the pension assets, largely driven by increasing equity investment
valuations.
Click or paste the following link into your web browser to view
the graph titled 'IAS 19 pension deficit - GBPm'. Refer to page 12
for this graph.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
While the accounting pension deficit is shown on the Group's
balance sheet, it does not drive the cash contributions that the
Group makes to the pension scheme. That is decided every three
years as part of the triennial actuarial valuation. The last
triennial valuation as at 31 March 2019 was concluded in May 2020
and showed a deficit of GBP58m. The Group has agreed to make annual
cash contributions of GBP10m until 2026 to eliminate the
deficit.
DELIVERING THE PARTNERSHIP PLAN
Over the last 20 years, we have navigated the changing landscape
of retail by continuing to build on our reputation for quality and
service, growing scale through expanding our physical estate for
both brands and early online expansion for johnlewis.com.
Significant capital was invested to acquire new shops (especially
in Waitrose), technology infrastructure and supply chain expansion
to support digital growth, which stood us well during the pandemic.
As the retail landscape shifted, increasing scale did not lead to
increased margins leaving the Group with greater fixed costs, which
have put pressure on profits in recent years as sales growth has
slowed.
To date, cost reduction plans have been insufficient to fully
address our financial position, hence investment and bonus were
tightened too to bring the Partnership to a stronger financial
footing. This period of austerity has been difficult for Partners
but has resulted in the Group having built sufficiently strong
liquidity to be able to afford the Partnership Plan and secure a
longer term future where the Group thrives, for the benefit of
customers, Partners and communities.
Our role now is to deliver the Partnership Plan, which sets out
the transformation of our business as we set ourselves back on the
path to sustainable profit (GBP200m by 2022/23 and GBP400m by
2025/26). This would meet our constitutional requirement to make
'sufficient' not maximum profit and allow us to distribute a bonus
to Partners. In the first two years of the Plan, we are reducing
our cost base to be able to continue fuelling our turnaround and
meet our commitment to paying the voluntary real living wage, and
are focusing on Retail Customers Love, to build on what makes our
brands special and create the platform for growth outside of
retail. The latter years of the Plan see us boost our investment in
our customer offer even further while driving profit growth from
higher margin activities outside retail, with financial services
and rental housing being our near term priorities.
Investing in transformation
As shared in our full year results statement, we are investing
up to GBP800m this year to support our transformation,
approximately 40% higher than recent years. This investment
includes a number of key elements which are critical to our
Partnership Plan:
-- Digital investment across both brands, at a significantly
higher level than recent years including new capacity to support
our John Lewis online growth;
-- Improvements in our store estate;
-- Updating major category propositions such as Home, and
refreshing financial services products;
-- Restructuring to reduce costs.
During the first half, we have invested GBP334m of the GBP800m
in support of the Plan. Below we draw out some of the key areas of
focus during H1.
Digital investment including new capacity
The pandemic has accelerated the shift to online sales across
both our brands. In John Lewis, we entered the pandemic with around
40% of our sales from online. For long periods during the pandemic,
including the first two months of this financial year, we were an
online-only retailer. As lockdown restrictions eased, we have seen
a new normal beginning to emerge. In the half to date, online sales
have accounted for 74% of all sales.
In Waitrose, we're seeing a shift in the mix of trade between
shops and online. In the first half, 17% of our Waitrose sales were
online (either home delivered or Click & Collect), compared to
20% during lockdown and 5% before the pandemic.
Click or paste the following link into your web browser to view
the charts titled 'John Lewis sales GBPm - channel mix' and
'Waitrose sales GBPm - channel mix'. Refer to page 14 for these
charts.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
Notes: The John Lewis chart shows sales and channel mix since
2018/19. The proportion of online sales has increased to 74% in
2021/22, which includes national lockdowns that resulted in John
Lewis shops being closed for 10 weeks of the year. The Waitrose
chart shows sales and channel mix since 2018/19. It does not
include sales to Ocado between 2018/19 and 2020/21 and excludes
sales made through Deliveroo in 2021/22.
There remains uncertainty about where the balance of trade
between online and physical retail will normalise. However, the
marked shifts we have seen since 2019/20 are highly unlikely to
reverse to pre-pandemic levels. Consequently we are investing
significantly in both our digital proposition and capacity growth
to support customers as they evolve their shopping behaviour.
We continued to invest in capacity within John Lewis to support
the growth in demand for online sales. In August 2021, we announced
our acquisition of a new lease for one million square foot capacity
at Fenny Lock, four miles from our state-of-the-art distribution
facility at Magna Park. The expansion of our distribution capacity
will increase the order volumes we can handle alongside creating
over 500 new jobs. It will also support combining customers' orders
to reduce packages by one million. In addition, we secured a
shorter term lease at Bardon in Leicestershire, further increasing
our scale to support this year's peak.
In Waitrose, we have invested in 24 shops to expand the online
capacity within these shops, with expansion of a further 45
expected in the second half. Alongside this we opened a new
customer fulfilment centre in Greenford, West London, adding
further capacity to meet our customers' needs. Combined, these
investments have supported an increase in capacity to deliver more
than 300,000 grocery orders per week, up from 130,000 a year
ago.
Click or paste the following link into your web browser to view
the chart titled 'Waitrose.com average weekly online orders
('000s)'. Refer to page 15 for this chart.
http://www.rns-pdf.londonstockexchange.com/rns/9256L_1-2021-9-15.pdf
Note: The chart shows Waitrose.com average and peak weekly
online orders by period in 2020/21 and 2021/22 - this does not
include Deliveroo orders.
Alongside capacity growth, we continue to improve our digital
proposition for customers. During H1 we invested GBP40m in creating
improved customer experience on waitrose.com and johnlewis.com.
Waitrose has delivered a number of improvements to the end-to-end
customer experience including: providing more delivery slots,
improving site search, streamlining the checkout process for our
apps making them easier to use and the introduction of online
delivery tracking. The proportion of orders made via the app has
increased from 15% to 28%. Following a successful trial we
announced an expansion of our partnership with Deliveroo, bringing
this service, with an expanded range, to 150 Waitrose shops
nationwide and a potential reach of 13 million customers. Deliveroo
sales are largely incremental and are helping us attract a younger
mix of customers.
In John Lewis, our investment has improved shopping tools like
search and sort, making the shopping journey easier, as well as
creating richer content into customer journeys based on customer
feedback and insight. We've also launched a 'Fit Finder' trial in
John Lewis, which identifies recommended clothing sizes based on
personal measurements and will trial video-on-demand shopping,
enabling customers to engage and shop with live content. The
proportion of orders made via the John Lewis app has increased from
14% to 24%.
Improvements to our store estate
We have invested in 17 Waitrose shops to create an enhanced John
Lewis proposition in these shops. This is either through taking
excess space in these Waitrose shops and converting into a
standalone John Lewis format, or through upweighted 'in-aisle'
branded propositions for customers. This has proven incredibly
popular with our customers, with sales ([12]) of John Lewis
products showing approximately 20% growth year on year compared to
the previous ranges we sold through Waitrose shops.
Across our Waitrose estate, we have scaled up our investment
pipeline to refresh and modernise our offer, with a total of 18
full refurbishments planned for this year. Nearly a third of our
estate will have received some store investment this year.
Alongside these investments we will have introduced ten new Waite
and Rose Cafes, 13 dry age beef cabinets and four sushi counters in
our stores.
During H1, we completed our long term investment in our John
Lewis Edinburgh store. It is early days following the
refurbishment, however, early signs are encouraging. Since
reopening, on a two year basis, shop catchment sales are up 20%.
Across the remainder of the John Lewis stores, we have completed a
deep dive on performance across six shops with a series of customer
proposition improvements identified which we are now
implementing.
We announced and completed the closure of a further eight John
Lewis shops. This is always a difficult decision to make, and is
felt strongly by both Partners and customers in these
communities.
We have significantly scaled up the number of John Lewis
touchpoints around the UK, with products now available for
customers to collect or purchase at over 1,000 locations, with
further expansion planned for the second half.
JL Touchpoints
Jan 2019 Jan 2020 Jan 2021 Aug 2021
-------- -------- -------- --------
John Lewis 52 51 34 34
-------- -------- -------- --------
Waitrose 339 328 327 327
-------- -------- -------- --------
Third Parties 6 68 540 665
-------- -------- -------- --------
Total 397 447 901 1,026
-------- -------- -------- --------
Restructuring and reducing costs
The Partnership Plan contains a commitment to saving GBP300m per
annum from the end of 2022/23. Higher than expected inflation in
some operating cost areas will continue to offset some savings this
year, however we delivered GBP66m of savings in the first half.
Cost reduction target Delivered in Total target*
H1 GBPm
GBPm
------------
Head Office Transformation(#) 2 55
Operational restructuring 13 75
Restructuring programmes 15 130
------------
Buying efficiencies 30 85
Operating efficiencies 21 85
------------------------------------ ------------ -------------
Cost out activities 51 170
------------------------------------ ------------ -------------
Total annual cost reduction target 66 300
------------------------------------ ------------ -------------
# Includes the restructuring of our Head Office functions,
including the net benefit of the outsourcing of parts of our
Technology function to managed service providers
* The total target composition may alter over time as benefits
are realised
Our restructuring programmes in the half principally relate to
the completion of the Head Office Transformation and shop
productivity benefits ahead of formal restructuring. Our cost out
activities are focused on driving structural cost savings across
the Group principally through margin optimisation in Waitrose and
John Lewis, reducing our selling and supply chain costs by being
more efficient in how we operate and lowering spend on goods not
for resale as well as lower property related costs.
Developing New Services
The Partnership Plan sets out our ambition to have 40% of our
profits from outside of retail by 2030, through financial services,
private housing and outdoor living. Our focus for the first two
years of the plan is on financial services and to lay the
foundations to launch a residential rental property offer.
Residential rental property
We have announced ambitions to build 10,000 homes for rental
over the next decade, of which half would be from our own estate.
Our plans are taking shape and we are in the process of
shortlisting partners.
Financial Services
Our financial services business is made up of the Partnership
(credit) Card, insurance products, foreign exchange, investments
and point of sale credit. While spend on the Partnership Card has
recovered during the period, foreign exchange continues to suffer
due to ongoing overseas travel restrictions. Insurance has had a
mixed performance.
Financial Product Half Year performance
Partnership Card Customer spend up 23%
-------------------------------
Home insurance Customer policies down 9%
-------------------------------
Car insurance Customer policies up 65%
-------------------------------
Pet insurance Customer policies up 11%
-------------------------------
Foreign exchange Customer transactions down 75%
-------------------------------
In the first half, we have improved our customer offer:
launching our innovative Home Insurance product; signing a new five
year agreement with Covea as our car insurance provider and
receiving Product of the Year at the GoCompare insurance awards;
adding a new point of sale credit proposition with BNP both in
store and online with GBP31m of funding already provided and, most
recently, launching a Stocks & Shares ISA, Junior ISA and
General Investing service in partnership with the UK's largest
digital wealth manager, Nutmeg.
Our work will continue in the second half to quadruple the size
of our John Lewis Financial Services business over the next five
years, consistent with the Partnership Plan.
Purpose and sustainability
As a Partnership driven by social purpose, we measure our
success not just by our commercial performance but by the
contribution we make to our Partners' lives and to the wider
community.
We made progress against our ambition to be the UK's most
inclusive business. During the first half, we announced equal
parental pay and leave where all Partners will receive 26 weeks'
paid leave (14 weeks at full contractual pay and 12 weeks at 50%
contractual pay) once they have worked for the Group for one year.
We also announced plans to introduce pregnancy loss leave. Both of
these are taking effect from 1 November 2021. We also introduced a
Flexible First policy with job vacancies advertised as flexible
working where possible and launched career support and job
opportunities programme for young people leaving the care
system.
In our annual pay review, we invested a total of GBP54m into
pay, delivering a 4% increase in non-management Partner pay. Our
average non-management pay is now GBP10.32 and we remain committed
to paying the voluntary real living wage when we reach over GBP200m
profit.
We made charitable donations of GBP2.5m, supporting causes
ranging from food poverty to international disaster relief. Through
our Give a Little Love campaign, Waitrose and its suppliers
diverted over five million surplus fresh products from its farm to
food charity FareShare, providing over one million meals to
vulnerable households. We donated over GBP1m this summer to more
than 1,000 local charities and community organisations helping to
end child poverty across the UK, in addition to GBP200k to the
Trussell Trust, which will help to enable 136 food banks in its
network to support thousands of families with emergency food and
practical support over the summer. This summer, we worked with
FareShare and Waitrose farmers/suppliers to donate four million
healthy snacks to ensure children in need have access to great
quality food during the summer holidays and became an official
supporter of the British Nutrition Foundation's Healthy Eating
Week.
We are making good progress against our six strategic
commitments on sustainability ([13]) .
With regards to climate action, we announced plans with Shell to
install 800 customer electric vehicle charging points in 100 of our
Waitrose shops by 2025. Against our People in Supply Chains
commitment, we increased our supply chain transparency by
publishing our first ever 'Women in John Lewis Partnership Supply
Chains' report. This looks at the specific challenges that women
face in our supply chains, and what the Group is doing to try and
address them.
Both brands have also made positive steps in waste reduction: we
have expanded the 'Unpacked' trial range in Waitrose, integrating
refillable ranges into regular aisles at Waitrose Wallingford, and
have extended our John Lewis furniture rental service with Fat
Llama, now offering over 350 lines. We are also trialling a number
of initiatives to reduce plastic waste including Prevented Ocean
Plastics, flexi plastic recycling trials and plastic reduction
trials across soft and exotic fruit lines.
ENQUIRIES
John Lewis plc
Chris Wynn, Partner & Director of Communications, 07980
242019, chris.wynn@johnlewis.co.uk
Katie Robson, Partner & Senior Communications Manager, 07584
669696, katie.robson@johnlewis.co.uk
Debt investors
Christof Nelischer, Partner & Head of Treasury,
investor.relations@johnlewis.co.uk
GLOSSARY OF FINANCIAL AND NON-FINANCIAL TERMS
This glossary gives an explanation of financial and
non-financial terms included in the results statement, compared to
last half year, i.e. July 2020.
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
include 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 Partnership Bonus, exceptional
flow items, depreciation and amortisation, but after lease
adjusted interest and tax. This measure is important
to assess our Debt Ratio.
===================== =============================================================
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. This
is used at year end only.
===================== =============================================================
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 Group'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.
===================== =============================================================
Impairment A reduction in the value of an asset due to a fall
in the expected future economic benefits generated
by the asset.
===================== =============================================================
Investment Total investment spend includes capital investment,
revenue investment, restructuring and redundancy
costs, and lease disposal costs.
===================== =============================================================
Like-for-like Comparison of sales between two periods in time (e.g.
(LFL) sales this year to last year), removing the impact of shop
openings and closures. Waitrose like-for-like sales
excludes fuel.
===================== =============================================================
Liquidity The cash, short-term investments and undrawn committed
credit facilities we have available to us, which
we can use to settle liabilities as they fall due.
===================== =============================================================
Long leave The long leave scheme provides Partners up to six
months' paid leave after 25 years' Group service.
===================== =============================================================
Non-management Level 9 and Level 10 Partners, excluding Assistant
Partners (NMP) Team Managers in Waitrose.
===================== =============================================================
PB Partnership Bonus
=============================================================================================
Profit before Profit before Partnership Bonus, tax and exceptional
Partnership Bonus, items. This measure is important as it allows for
tax and exceptional a comparison of underlying profit performance.
items 2021/22 2020/21
(PBTBE) GBPm GBPm
Profit before PB, tax and exceptional
items 69 (55)
Exceptional items (98) (580)
(Loss)/profit before tax (29) (635)
-------- --------
===================== =============================================================================================
Revenue investment Investment spend recognised directly in the income
statement.
===================== =============================================================================================
Total net debts The Group's borrowings and overdrafts, lease liabilities,
derivative financial instruments and IAS 19 pension
deficit (net of deferred tax), less any liquid cash,
short-term deposits and investments. 2021/22 2020/21
GBPm GBPm
Borrowings and overdrafts (795) (1,169)
Amounts owed to Parent in respect
of SIP shares (25) (36)
Derivative financial instruments (15) -
Pension deficit (after deferred
tax) (147) (534)
Lease liabilities (2,016) (2,059)
Liquid cash, short-term deposits
and investments 1,305 1,463
-------- --------
Total net debts (1,693) (2,335)
-------- --------
===================== =============================================================================================
Total trading Total trading sales represents the full customer
sales sales value, including VAT, that is used to assess
ongoing sales performance. It is before adjustments
for sale or return sales and other accounting adjustments.
2021/22 Waitrose John Lewis Group
GBPm GBPm GBPm
Total trading sales 3,792 2,082 5,874
Value added tax (221) (338) (559)
-------- ---------- -----
Sale or return and other
accounting adjustments (56) (106) (162)
-------- ---------- -----
Revenue 3,515 1,638 5,153
-------- ---------- -----
2020/21 Waitrose John Lewis Group
GBPm GBPm GBPm
Total trading sales 3,707 1,860 5,567
Value added tax (211) (303) (514)
-------- ---------- -----
Sale or return and other
accounting adjustments (56) (78) (134)
-------- ---------- -----
Revenue 3,440 1,479 4,919
-------- ---------- -----
============================================================
Trading operating Trading operating profit represents operating profits
profit used to assess the performance of the John Lewis
and Waitrose brands and determine the allocation
of resources to them. It excludes centrally managed
costs, including fixed property costs and depreciation.
2021/22 Waitrose John Lewis Group
GBPm GBPm GBPm
Trading operating profit 525 295 820
Centrally managed costs
incl property (431)
-------- ---------- -----
Depreciation and amortisation (244)
-------- ---------- -----
Net finance costs (76)
-------- ---------- -----
PBTBE 69
-------- ---------- -----
Exceptional items (98)
-------- ---------- -----
Loss before PB and tax (29)
-------- ---------- -----
2020/21 Waitrose John Lewis Group
GBPm GBPm GBPm
Trading operating profit 586 153 739
Centrally managed costs
incl property (524)
-------- ---------- -----
Depreciation and amortisation (193)
-------- ---------- -----
Net finance costs (77)
-------- ---------- -----
PBTBE (55)
-------- ---------- -----
Exceptional items (580)
-------- ----------
Loss before PB and tax (635)
-------- ---------- -----
=============================================================
Trading operating Trading operating profit divided by Total trading
profit % sales.
================== =============================================================
Consolidated income statement
for the half year ended 31 July 2021
Notes Half year Half year Year to
to to 30 January
31 July 25 July 2021
2021 2020
GBPm GBPm GBPm
------- -------------------------------------------- ----------- ----------- -------------
6 Revenue 5,152.8 4,919.4 10,771.8
Cost of sales (3,512.5) (3,433.2) (7,408.6)
------- -------------------------------------------- ----------- ----------- -------------
Gross profit 1,640.3 1,486.2 3,363.2
Other operating income 50.2 51.3 102.4
Operating expenses before exceptional
items and Partnership Bonus (1,546.2) (1,515.5) (3,179.6)
Share of profit/(loss) of joint venture
(net of tax) 0.5 (0.4) 0.9
------- -------------------------------------------- ----------- ----------- -------------
Operating profit before exceptional items
5 and Partnership Bonus 144.8 21.6 286.9
4 Exceptional items (97.9) (579.6) (648.0)
------- -------------------------------------------- ----------- ----------- -------------
Operating profit/(loss) before Partnership
5 Bonus 46.9 (558.0) (361.1)
7 Finance costs (79.9) (84.7) (168.6)
7 Finance income 4.4 8.2 11.3
------- -------------------------------------------- ----------- ----------- -------------
Loss before Partnership Bonus and tax (28.6) (634.5) (518.4)
Partnership Bonus - - -
------- -------------------------------------------- ----------- ----------- -------------
Loss before tax (28.6) (634.5) (518.4)
8 Taxation (11.8) 75.0 65.4
------- -------------------------------------------- ----------- ----------- -------------
Loss for the period (40.4) (559.5) (453.0)
------- -------------------------------------------- ----------- ----------- -------------
Profit/(loss) before Partnership Bonus,
5 tax, and exceptional items 69.3 (54.9) 129.6
------- -------------------------------------------- ----------- ----------- -------------
Consolidated statement of comprehensive income
for the half year ended 31 July 2021
Half year Half year
to to Year to
31 July 25 July 30 January
Notes 2021 2020 2021
GBPm GBPm GBPm
----- ------------------------------------------- --------- --------- -----------
Loss for the period (40.4) (559.5) (453.0)
Other comprehensive income/(expense):
Items that will not be reclassified
to profit or loss:
Remeasurement of defined benefit pension
12 scheme 484.8 (206.3) (237.4)
Movement in deferred tax on pension
8 scheme (81.1) 47.5 53.6
Movement in current tax on pension
8 scheme 1.0 0.5 1.6
Items that may be reclassified subsequently
to profit or loss:
Fair value (loss)/gain on cash flow
hedges (8.5) 18.4 (5.6)
Movement in deferred tax on cash flow
8 hedges (0.5) (2.6) 0.3
----- ------------------------------------------- --------- --------- -----------
Other comprehensive income/(expense)
for the period 395.7 (142.5) (187.5)
----- ------------------------------------------- --------- --------- -----------
Total comprehensive income/(expense)
for the period 355.3 (702.0) (640.5)
----- ------------------------------------------- --------- --------- -----------
Consolidated balance sheet
as at 31 July 2021
25 July 30 January
Notes 31 July 2021 2020 2021
GBPm GBPm GBPm
----- ---------------------------------------- ------------ --------- ----------
Non-current assets
9 Intangible assets and goodwill 456.4 476.7 467.9
9 Property, plant and equipment 2,941.2 2,999.6 2,983.5
9 Right-of-use assets 1,515.6 1,569.0 1,540.2
Trade and other receivables 15.8 18.3 18.0
14 Derivative financial instruments 0.8 1.7 0.1
Investment in and loans to joint venture 3.7 2.1 3.4
Deferred tax asset 14.1 85.1 103.4
----- ---------------------------------------- ------------ --------- ----------
4,947.6 5,152.5 5,116.5
----- ---------------------------------------- ------------ --------- ----------
Current assets
Inventories 629.7 557.9 643.9
Trade and other receivables 312.4 307.0 250.8
Current tax receivable 0.3 20.7 9.0
14 Derivative financial instruments 5.5 10.8 7.2
10 Assets held for sale - 14.1 10.6
Short-term investments 391.8 25.3 0.3
Cash and cash equivalents 1,032.8 1,551.0 1,518.2
----- ---------------------------------------- ------------ --------- ----------
2,372.5 2,486.8 2,440.0
----- ---------------------------------------- ------------ --------- ----------
Total assets 7,320.1 7,639.3 7,556.5
----- ---------------------------------------- ------------ --------- ----------
Current liabilities
14 Borrowings and overdrafts - (298.3) (75.0)
Trade and other payables (1,618.4) (1,568.8) (1,654.7)
14 Lease liabilities (135.8) (119.2) (127.3)
11 Provisions (207.7) (146.7) (193.6)
14 Derivative financial instruments (20.3) (9.1) (20.9)
----- ---------------------------------------- ------------ --------- ----------
(1,982.2) (2,142.1) (2,071.5)
----- ---------------------------------------- ------------ --------- ----------
Non-current liabilities
14 Borrowings (794.5) (870.5) (795.4)
Trade and other payables (41.3) (42.1) (45.0)
14 Lease liabilities (1,879.8) (1,940.1) (1,910.0)
11 Provisions (169.6) (170.3) (162.4)
14 Derivative financial instruments (0.6) (3.1) (2.7)
12 Retirement benefit obligations (163.9) (623.8) (646.9)
Deferred tax liability (5.2) - (5.2)
----- ---------------------------------------- ------------ --------- ----------
(3,054.9) (3,649.9) (3,567.6)
----- ---------------------------------------- ------------ --------- ----------
Total liabilities (5,037.1) (5,792.0) (5,639.1)
----- ---------------------------------------- ------------ --------- ----------
Net assets 2,283.0 1,847.3 1,917.4
----- ---------------------------------------- ------------ --------- ----------
Equity
Share capital 6.7 6.7 6.7
Share premium 0.3 0.3 0.3
Other reserves (11.4) (0.2) (12.7)
Retained earnings 2,287.4 1,840.5 1,923.1
----- ---------------------------------------- ------------ --------- ----------
Total equity 2,283.0 1,847.3 1,917.4
----- ---------------------------------------- ------------ --------- ----------
Consolidated statement of changes in equity
for the half year ended 31 July 2021
Foreign
currency
Share Share Capital Hedging translation Retained Total
Notes capital premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Balance at 25 January 2020 6.7 0.3 1.4 (14.6) 0.4 2,558.3 2,552.5
Loss for the period - - - - - (559.5) (559.5)
Remeasurement of defined
12 benefit pension scheme - - - - - (206.3) (206.3)
Fair value gain on cash
flow hedges - - - 18.4 - - 18.4
Tax on above items recognised
in equity - - - (2.6) - 48.0 45.4
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Total comprehensive income/(expense)
for the period - - - 15.8 - (717.8) (702.0)
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Transfers to inventories - - - (3.2) - - (3.2)
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Balance at 25 July 2020 6.7 0.3 1.4 (2.0) 0.4 1,840.5 1,847.3
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Balance at 25 January 2020 6.7 0.3 1.4 (14.6) 0.4 2,558.3 2,552.5
Loss for the year - - - - - (453.0) (453.0)
Remeasurement of defined
12 benefit pension scheme - - - - - (237.4) (237.4)
Fair value loss on cash
flow hedges - - - (5.6) - - (5.6)
Tax on above items recognised
in equity - - - 0.3 - 55.2 55.5
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Total comprehensive expense
for the year - - - (5.3) - (635.2) (640.5)
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Transfers to inventories - - - 5.4 - - 5.4
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Balance at 30 January 2021 6.7 0.3 1.4 (14.5) 0.4 1,923.1 1,917.4
Loss for the period - - - - - (40.4) (40.4)
Remeasurement of defined
12 benefit pension scheme - - - - - 484.8 484.8
Fair value loss on cash
flow hedges - - - (8.5) - - (8.5)
Tax on above items recognised
in equity - - - (0.5) - (80.1) (80.6)
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Total comprehensive (expense)/income
for the period - - - (9.0) - 364.3 355.3
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Transfers to inventories - - - 10.3 - - 10.3
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Balance at 31 July 2021 6.7 0.3 1.4 (13.2) 0.4 2,287.4 2,283.0
----- ------------------------------------ -------- -------- -------- -------- ------------ --------- -------
Consolidated statement of cash flows
for the half year ended 31 July 2021
Half year Half year Year to
to to 30 January
Notes 31 July 2021 25 July 2020 2021
GBPm GBPm GBPm
----- -------------------------------------------- ------------- ------------- -----------
Cash generated from operations before
13 Partnership Bonus 233.3 294.6 820.0
Net taxation paid 5.6 (14.6) (16.0)
Pension deficit reduction payments (5.0) (2.5) (7.5)
Finance costs paid (53.0) (56.9) (114.7)
----- -------------------------------------------- ------------- ------------- -----------
Net cash generated from operating activities
before Partnership Bonus 180.9 220.6 681.8
----- -------------------------------------------- ------------- ------------- -----------
Partnership Bonus paid - (31.4) (31.4)
Net cash generated from operating activities
after Partnership Bonus 180.9 189.2 650.4
----- -------------------------------------------- ------------- ------------- -----------
Cash flows from investing activities
Purchase of property, plant and equipment (77.4) (39.3) (122.5)
Purchase of intangible assets (53.3) (42.5) (99.1)
Proceeds from sale of property, plant
and equipment and intangible assets 10.9 139.6 142.2
Finance income received 0.3 3.1 4.0
Cash (outflow)/inflow from short-term
investments (391.5) 291.1 316.1
----- -------------------------------------------- ------------- ------------- -----------
Net cash (used in)/from investing activities (511.0) 352.0 240.7
----- -------------------------------------------- ------------- ------------- -----------
Cash flows from financing activities
Finance costs paid in respect of bonds - - (31.1)
Finance costs paid in respect of financial
instruments (2.5) (2.8) -
Payment of capital element of leases (77.8) (34.0) (90.1)
Cash (outflow)/inflow from borrowings (75.0) 448.3 150.0
----- -------------------------------------------- ------------- ------------- -----------
Net cash (used in)/from financing activities (155.3) 411.5 28.8
----- -------------------------------------------- ------------- ------------- -----------
(Decrease)/Increase in net cash and
cash equivalents (485.4) 952.7 919.9
Net cash and cash equivalents at beginning
of the period 1,518.2 598.3 598.3
----- -------------------------------------------- ------------- ------------- -----------
Net cash and cash equivalents at end
of the period 1,032.8 1,551.0 1,518.2
----- -------------------------------------------- ------------- ------------- -----------
Net cash and cash equivalents comprise:
Cash at bank and in hand 162.8 129.6 178.2
Short-term deposits 870.0 1,421.4 1,340.0
----- -------------------------------------------- ------------- ------------- -----------
1,032.8 1,551.0 1,518.2
----- -------------------------------------------- ------------- ------------- -----------
Notes to the financial statements
1 Basis of preparation
This condensed set of interim financial statements was approved
by the Board on 15 September 2021. The condensed set of interim
financial statements do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The condensed set
of interim financial statements is unaudited and has not been
reviewed by the auditor. The comparative information for the half
year to or as at 25 July 2020 has not been audited, but has been
reviewed in accordance with the International Standard on Review
Engagements (UK and Ireland) 2410.
The results for the half year to 31 July 2021 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 2021 have been reported on by the Group's auditor and filed
with the Registrar of Companies. The report of the auditor was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under section 498 of the Companies
Act 2006.
This condensed set of interim financial statements for the half
year ended 31 July 2021 has been prepared in accordance with IAS 34
'Interim Financial Reporting' as adopted by the European Union. The
condensed set of interim financial statements should be read in
conjunction with the Annual Report and Accounts for the year ended
30 January 2021, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. Changes to significant accounting policies are
described in note 2.
Going concern
In determining the appropriate basis of preparation of the
condensed set of interim financial statements for the period ended
31 July 2021, the Directors are required to consider whether the
Group can continue in operational existence for a period of at
least 12 months from the approval of these financial statements.
The Board has concluded that it is appropriate to adopt the going
concern basis, having undertaken a rigorous assessment of the
financial forecasts with specific consideration to the trading
position of the Group, for the reasons set out below.
As at 31 July 2021, the Group had total assets less current
liabilities of GBP5.3bn and net assets of GBP2.3bn. Liquidity as at
that date remains strong at GBP1.9bn, made up of cash and cash
equivalents, short-term investments and undrawn committed credit
facilities of GBP0.5bn.
The financial year has started well with profits recovering,
ahead of last year and the previous year. Both Waitrose stores and
its online activities continued to perform well with the number of
orders fulfilled more than double the level being fulfilled last
year. Customer demand remained high during the lockdown earlier
this year although, since the slow reopening of hospitality
services, customer behaviour has begun to return to pre-pandemic
patterns and year on year growth rates for online have slowed. For
John Lewis, sales and trading operating profit has rebounded in the
first half after a very disrupted year last year. On 28 June 2021,
it was confirmed that the eight John Lewis stores proposed for
closure earlier in the year will not reopen following the end of
group consultation. The full impact of the Covid-19 pandemic is
unknown at this time and is unpredictable, and our key priority
continues to be the health and wellbeing of our Partners and
customers, while we maintain our high standards of service.
Accordingly, the Directors have reviewed the continually
evolving situation relating to Covid-19 and considered its longer
term impacts, for example on consumer demand, by modelling a
downside scenario to cover the going concern assessment period,
being for the 12 month period ending September 2022. In addition,
the Directors have modelled a further period to 28 January 2023 in
order to cover the maturity of the revolving credit facility and
term loan repayments which fall due ahead of this date. For the
purposes of the going concern assessment, it is assumed that all
Group borrowings are repaid at their maturity date and that no
further refinancing or funding is undertaken. The downside case
represents an increasingly severe but plausible scenario. It
assumes lockdown conditions resume in Q4 2021/22 and that John
Lewis stores are closed during this period, with online sales
remaining operational but with reduced demand.
Waitrose remains operational both in store and online, albeit
with sales and margin pulled back from current trading levels. This
is followed by a further, deeper recession throughout the
assessment period resulting in a further reduction in sales, as
well as a reduction in margin across both brands and a number of
one-off events, e.g. a regulatory and data security breach, higher
impairment charge, increasing pension deficit and under-delivery of
key activities of the Partnership Plan. The impact of the downside
adjustments has been reviewed against the Group's projected cash
position and financial covenants. Should these occur, mitigating
actions would be required to ensure that the Group remains liquid
and financially viable.
The downside model has a significant adverse impact on sales,
margin and cash flow. In response, the Directors have identified
available mitigations in the going concern assessment period, all
within management's control, to reduce costs and optimise the
Group's cash flow, liquidity and covenant headroom. The majority of
these mitigations would only be triggered in the event of the
downside scenario materialising. Mitigating actions include, but
are not limited to, reducing capital and investment expenditure
through postponing or pausing projects and change activity;
deferring or cancelling discretionary spend (including
discretionary Partner benefits); and reducing marketing spend.
The Group has debt maturing in November 2021 when GBP64m (of a
total GBP450m) syndicated facility matures. The Group's committed
facilities contain one financial performance covenant, which is a
profit based covenant ('Fixed Charge Cover'). The downside scenario
modelled indicates that without mitigating actions a number of the
Group's covenants relating to the bonds, term loans and undrawn
committed credit facilities would breach at the next balance sheet
date due to the reduction in profits and net assets modelled.
However, whilst the scenario indicates breaches, the same scenario
indicates that post mitigating actions, the cash low point under
such a scenario would be GBP575m, under which our covenants would
not breach, the bonds would not be required to be repaid early and
the committed credit facilities would remain undrawn. The Group
would prefer to retain the option to utilise its facilities,
therefore, covenant compliance will continue to be monitored
closely and, if deemed necessary, the Group will seek a covenant
relaxation from its bank group, or take other actions to replace
the level of liquidity support provided by these facilities.
The downside detailed above is deemed by the Directors to
provide a severe but plausible stress test on our ability to adopt
the going concern basis. This includes a significant reduction in
2021/22 performance and reduced trading performance across both
brands, resulting in a pre-mitigation cash reduction to forecast.
Uncertainty exists in respect of the potential impact of Covid-19
in 2021/22 and its longer term economic impact. We have made our
assessment based on our best view of the severe but plausible
downside scenario that we might face. If outcomes are unexpectedly
significantly worse, the Directors would need to consider what
additional mitigating actions were needed, for example, accessing
the value of our asset base to support liquidity. Consequently, the
Directors have concluded that it is not reasonable to do a further
stress test of a level of increased severity beyond the severe
downside already modelled.
Consequently, the Directors have concluded that the Group and
Company will have sufficient funds to continue to meet its
liabilities as they fall due for at least 12 months from the date
of approval of the condensed set of interim financial statements
and therefore have prepared the financial statements on a going
concern basis.
2 Accounting policies
The Group's results for the half year to 31 July 2021 have been
prepared on a basis consistent with the Group's accounting policies
published in the financial statements for the year ended 30 January
2021.
A number of amendments to, and the interpretation of, existing
accounting standards became effective during the period, none of
which have had a significant impact on the condensed interim
financial statements.
3 Risks and uncertainties
The Group has a formal risk identification process which
includes a rigorous analysis of internal and external risks within
leadership teams, at the Executive Team, Audit and Risk Committee,
Ethics & Sustainability Committee and the Group Board. The
principal risks and uncertainties affecting the Group were reported
in the Strategic Report, set out on pages 48 to 56 of the John
Lewis Partnership Annual Report and Accounts 2021, a copy of which
is available on the Group's website www.johnlewispartnership.co.uk
. All risks remain relevant for the second half of the financial
year.
Covid-19 continues to be the most significant external risk
currently facing the Group, impacting our customers, Partners,
supply chain, stores and online operations. The Group has
proactively responded to Covid-19, for example by implementing
personal protective equipment and social distancing measures across
all of our shops and supply chain; increasing Waitrose online
delivery capacity; prioritising our vulnerable customers; and
protecting our liquidity through reducing capital and investment
expenditure, deferring or cancelling discretionary spend such as
marketing, and negotiating financing arrangements. Despite the
relaxation of restrictions in recent months, our priority continues
to be to protect the safety and wellbeing of our customers and
Partners and support the community.
Principal risks:
-- External environment: external environment changes impact the
delivery of business-as-usual (BAU) operations or strategic
objectives;
-- Proposition: failure to deliver profitable, market-leading
propositions to inspire our customers and maintain competitive
advantage;
-- Partner differentiation: the responsibilities and benefits of
membership are not sufficiently felt and experienced by Partners
and/or do not drive a distinctive and better business in service of
our purpose;
-- Information security: loss of key customer, Partner and/or
commercially sensitive data leading to financial, regulatory,
legal, operational and reputational issues;
-- Liquidity: insufficient cash when needed to support operating
cash flows, pay our debts or invest for the future;
-- Change delivery: change does not realise the desired benefits
and drives unforeseen cost and consequences;
-- Customer experience: Customers do not receive differentiated,
excellent customer service across touchpoints;
-- Regulatory non-compliance: failure to comply with key regulatory requirements;
-- Ethics and sustainability: failure to live up to our ethics and sustainability ambition; and
-- Partner wellbeing: partners' sense of wellbeing is threatened
by societal and organisational uncertainty and change.
Looking forward to the second half of the year, the Group will
continue to monitor global Covid-19 developments, Government and
National Institute for Health Protection guidance and respond
appropriately, whilst maintaining customer service and protecting
Partners and local communities. Emerging risks around UK labour
shortages, especially in areas like drivers, alongside inflationary
effects from global supply chain challenges will be actively
monitored and mitigating actions taken.
4 Exceptional items
Half year to Half year to Year to
31 July 2021 25 July 2020 30 January 2021
Operating Taxation Operating Taxation Operating Taxation
(expenses)/ credit/ (expenses)/ credit/ (expenses)/ credit/
income (charge) income (charge) income (charge)
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------------ --------- ------------ --------- ------------ ---------
Strategic restructuring
and redundancy programmes
Physical estate (63.4) 6.8 (105.5) 12.9 (93.7) 15.6
Shop operations (41.3) 9.9 0.2 - 0.6 (0.1)
Head office reviews 7.4 (1.7) (12.6) 1.2 (96.1) 18.3
----------------------------- ------------ --------- ------------ --------- ------------ ---------
(97.3) 15.0 (117.9) 14.1 (189.2) 33.8
----------------------------- ------------ --------- ------------ --------- ------------ ---------
Store impairments - John
Lewis (0.6) (2.6) (470.7) 61.0 (468.1) 72.2
Store impairments - Waitrose - 0.1 9.3 (1.2) 9.6 (1.3)
Pay provision - - (0.3) 0.1 (0.3) 0.1
----------------------------- ------------ --------- ------------ --------- ------------ ---------
(97.9) 12.5 (579.6) 74.0 (648.0) 104.8
----------------------------- ------------ --------- ------------ --------- ------------ ---------
Strategic restructuring and redundancy programmes
Since January 2021, the Group has continued its strategic review
of physical estate with the closure of a further eight John Lewis
stores, announced a major reorganisation of management structures
in John Lewis and Waitrose stores, and progressed with the
restructure of head office functions. These programmes present
significant deviations from normal operations for the Group, in
terms of their size and nature, and are therefore presented as
exceptional items to provide a more meaningful view of the Group's
underlying business performance. The financial impacts of these
programmes are detailed below.
Physical estate: Since 2017, we have been working on our
programme of optimising our existing estate; this includes ensuring
that the size and shape of our physical estate is delivering on
both our customer proposition, and financial returns. With the
launch of the Partnership Plan, and the acceleration of change we
have seen in customer shopping behaviour, we have refocused on the
need to ensure our stores reflect how our customers want to shop -
'right space, right place' - and as a result we anticipate these
changes may now be extended to 2025/26.
Following the closure of eight John Lewis stores in 2020, it was
confirmed in June 2021 that a further eight stores would be closed
this year. A subsequent review of our distribution network led to
the proposal in July 2021 for the Uckfield CDH to close in the
first half of 2022. Accordingly, at July 2021 we have recognised a
net exceptional charge of GBP(63.4)m (January 2021: GBP(93.7)m;
July 2020: GBP(105.5)m; charges recognised following the
announcement of the first eight John Lewis store closures). The net
charge includes the impairment of assets (reflecting the shortening
of the useful economic life), accelerated depreciation of buildings
and fixtures and fittings, and management's best estimate of
closure costs including onerous leases, dilapidations, project
costs and, where closure has been approved and announced,
redundancy costs. The impairment charge of the recently announced
store closures are included in this category.
Shop operations: Alongside the assessment of our physical
estate, we also identified that the way in which we run and manage
our shops would require adjustment. In order to improve the
customer experience and efficiencies in our stores, we have made a
number of changes in our shop operating models. This has included
reviewing store management structures, the centralisation of
certain functions, and aligning regional offerings in order to
deliver a more flexible, multi-skilled and productive model.
The next stage of this review was announced in July 2021, with
the proposal to simplify and reduce layers of management in
Waitrose and John Lewis shops. Approximately 3,000 Partners entered
into a period of consultation in July with a proposed overall
reduction of around 1,000 management roles. As such, GBP(39.4)m of
expected redundancy-related costs, as well as GBP(1.9)m of project
costs, have been recognised at July 2021, based on management's
best estimate of future expenses. In the year to January 2021, a
credit of GBP0.6m was recognised in exceptional items under 'shop
operations' due to the release of redundancy provisions relating to
the prior year.
Head office: The transformation of head office operations has
continued this half. This is part of the wider review of a number
of Group functions which began at the end of 2017. Given the scale
of the change, the delivery of these reviews was expected to take
four years, and are now well progressed with the completion of the
consultation periods for the Head Office Transformation (HOT)
programme. This programme was announced as part of the Partnership
Plan in November 2020 and builds on previous reviews to make the
head office leaner and more efficient. Last financial year
GBP(96.1)m of exceptional costs were recognised for head office
reviews, GBP(72.6)m of which were based on management's best
estimates of expected costs for redundancy and voluntary severance
related to the HOT programme. Following completion of the
consultation periods, the expected costs have been updated
resulting in a net credit of GBP7.4m recognised at July 2021. The
credit related to the release of these provisions has been
classified as exceptional as the original charge was treated as
such last financial year. This net credit also includes expenses
incurred this half for consultancy fees and redundancies related to
the Tech & Change restructure.
Included within operating expenses, and not separately reported
as exceptional, are GBP(3.0)m (January 2021: GBP(4.0)m; July 2020:
GBP(1.4)m) of restructuring and redundancy costs which are
considered by the Group to be separate from our strategic
programmes and part of the underlying business performance.
Store impairments (Waitrose)
At July 2021, there was no charge to exceptionals (January 2021:
GBP9.6m credit; July 2020: GBP9.3m credit).
Store impairments (John Lewis)
At July 2021, a net impairment charge of GBP(0.6)m (January
2021: GBP(468.1)m charge; July 2020: GBP(470.7)m charge) has been
recognised. The cash flow forecasts across the John Lewis store
estate at July 2021 have been updated for the latest view of future
trading, allocation of online sales and the impact of the John
Lewis property strategy concluded during the period
The updated cash flow forecasts have led to a reversal of
impairment charges of GBP70.4m and new impairment charges of
GBP(71.0)m. The existing provisions were previously charged as
exceptional. By virtue of the size of the charge, and that the
circumstances which have led to the charge arising are unique and
unusual, the charge has been recognised as exceptional. See note 9
for further detail.
The John Lewis plc response to Covid-19
As last year, consideration has been given as to whether costs
and income relating to Covid-19 meet the definition of exceptional
items and whether, individually or collectively, they are
significant by virtue of their size and nature. Whilst these
criteria are met in a number of cases (for example, furlough income
and costs of personal protective equipment), given the diverse
actions arising in response to the Covid-19 pandemic, isolating and
quantifying all individual items of cost and income in an even
handed way is difficult to achieve and could be misleading. On this
basis, it has been deemed not appropriate to classify costs or
income associated with Covid-19 as exceptional.
5 Segmental reporting
The Group's reporting segments are determined based on the
internal financial reporting to the chief operating decision-maker
(CODM) and is split by the business activities of its brands (John
Lewis and Waitrose).
The Executive Team reviews the operating performance for each
Brand (John Lewis and Waitrose) in the Group, using non-GAAP
measures known as total trading sales and trading operating profit
('TOP').
Total trading sales represents the full customer sales value
including VAT as reported weekly to the Executive Team, before
adjustments for sale or return sales and other accounting
adjustments.
TOP is based on operating profit, but excludes centrally managed
costs. These centrally managed costs are outside of the direct
influence and control of the brands and are reviewed by the
Executive Team at a Group level in aggregate. TOP is used to assess
the performance of the John Lewis and Waitrose brands and determine
the allocation of resources to those segments.
Centrally managed costs include all fixed property costs of the
Group, head office costs, and one-off adjusting items. One-off
adjusting items are those that do not meet the Group's definition
of 'exceptional items', because they are considered to be relevant
to the principal activities of the business. However, these are
removed from the TOP of each brand, as they are non-recurring in a
business-as-usual scenario, and this allows management to better
assess their underlying performance.
The Waitrose 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.
Waitrose John Lewis Group
GBPm GBPm GBPm
------------------------------------------------ -------- ---------- -------
Half year to 31 July 2021
Total trading sales 3,792.5 2,081.7 5,874.2
Value added tax (221.2) (337.8) (559.0)
Sale or return and other accounting adjustments (56.5) (105.9) (162.4)
------------------------------------------------ -------- ---------- -------
Revenue 3,514.8 1,638.0 5,152.8
------------------------------------------------ -------- ---------- -------
Trading operating profit(1) 524.6 295.0 819.6
------------------------------------------------ -------- ---------- -------
Centrally managed costs including property (430.5)
Depreciation and amortisation (244.3)
------------------------------------------------ -------- ---------- -------
Operating profit before exceptional items
and Partnership Bonus 144.8
Exceptional items (97.9)
------------------------------------------------ -------- ---------- -------
Operating profit before Partnership Bonus 46.9
Finance costs (79.9)
Finance income 4.4
------------------------------------------------ -------- ---------- -------
Loss before Partnership Bonus and tax (28.6)
Partnership Bonus -
------------------------------------------------ -------- ---------- -------
Loss before tax (28.6)
------------------------------------------------ -------- ---------- -------
(1) Included in trading operating profit is other operating
income of which GBP46.5m (split between operating segments:
GBP31.6m John Lewis and GBP14.9m Waitrose) represents further
income from external customers. This is reported to the CODM
separately as part of other income and expenses.
Waitrose John Lewis Group
GBPm GBPm GBPm
------------------------------------------------ -------- ---------- -------
Half year to 25 July 2020
Total trading sales 3,706.7 1,860.3 5,567.0
Value added tax (210.8) (302.5) (513.3)
Sale or return and other accounting adjustments (56.1) (78.2) (134.3)
------------------------------------------------ -------- ---------- -------
Revenue 3,439.8 1,479.6 4,919.4
------------------------------------------------ -------- ---------- -------
Trading operating profit(1) 585.7 152.9 738.6
------------------------------------------------ -------- ---------- -------
Centrally managed costs including property (524.3)
Depreciation and amortisation (192.7)
------------------------------------------------ -------- ---------- -------
Operating profit before exceptional items
and Partnership Bonus 21.6
Exceptional items (579.6)
------------------------------------------------ -------- ---------- -------
Operating loss before Partnership Bonus (558.0)
Finance costs (84.7)
Finance income 8.2
------------------------------------------------ -------- ---------- -------
Loss before Partnership Bonus and tax (634.5)
Partnership Bonus -
------------------------------------------------ -------- ---------- -------
Loss before tax (634.5)
------------------------------------------------ -------- ---------- -------
(1) Included in trading operating profit is other operating
income of which GBP48.1m (split between operating segments:
GBP22.4m John Lewis and GBP25.7m Waitrose) represents further
income from external customers. This is reported to the CODM
separately as part of other income and expenses.
Waitrose John Lewis Group
GBPm GBPm GBPm
------------------------------------------------ -------- ---------- ---------
Year to 30 January 2021
Total trading sales 7,595.2 4,721.9 12,317.1
Value added tax (438.9) (766.9) (1,205.8)
Sale or return and other accounting adjustments (112.4) (227.1) (339.5)
------------------------------------------------ -------- ---------- ---------
Revenue 7,043.9 3,727.9 10,771.8
------------------------------------------------ -------- ---------- ---------
Trading operating profit(1) 1,144.6 554.4 1,699.0
------------------------------------------------ -------- ---------- ---------
Centrally managed costs including property (902.1)
Depreciation and amortisation (510.0)
------------------------------------------------ -------- ---------- ---------
Operating profit before exceptional items
and Partnership Bonus 286.9
Exceptional items (648.0)
------------------------------------------------ -------- ---------- ---------
Operating loss before Partnership Bonus (361.1)
Finance costs (168.6)
Finance income 11.3
------------------------------------------------ -------- ---------- ---------
Loss before Partnership Bonus and tax (518.4)
Partnership Bonus -
------------------------------------------------ -------- ---------- ---------
Loss before tax (518.4)
------------------------------------------------ -------- ---------- ---------
(1) Included in trading operating profit is other operating
income of which GBP95.6m (split between operating segments:
GBP50.0m John Lewis and GBP45.6m Waitrose) represents further
income from external customers. This is reported to the CODM
separately as part of other income and expenses.
6 Revenue
Disaggregation of revenue from contracts with customers
The revenue recognition policy is unchanged from that described
in the Annual Report and Accounts for the year ended 30 January
2021.
We analyse our revenue between goods and services. Goods are
split into four major product lines: Grocery, Home, Fashion and
Technology. Services comprise free service guarantees on selected
goods. This presentation is consistent with how our Executive Team
reviews performance. In line with our five-year Partnership Plan,
we expect our service offering to increase in the coming year and,
as such, will keep this reporting under review including the
classification of commission income from other services as other
income rather than revenue.
Half year Half year Year to
to 31 July to 25 July 30 January
2021 2020 2021
GBPm GBPm GBPm
-------------------- ----------- ----------- -----------
Major product lines
-------------------- ----------- ----------- -----------
Goods
-------------------- ----------- ----------- -----------
- Grocery 3,512.9 3,430.2 7,040.4
-------------------- ----------- ----------- -----------
- Home 501.7 390.1 995.5
-------------------- ----------- ----------- -----------
- Fashion 430.4 383.5 946.6
-------------------- ----------- ----------- -----------
- Technology 660.9 668.9 1,695.5
-------------------- ----------- ----------- -----------
Services
-------------------- ----------- ----------- -----------
- Free warranty 12.7 13.3 25.9
-------------------- ----------- ----------- -----------
- Other revenue 34.2 33.4 67.9
-------------------- ----------- ----------- -----------
5,152.8 4,919.4 10,771.8
-------------------- ----------- ----------- -----------
7 Net finance costs
Half year Half year Year to
to to 30 January
31 July 25 July 2021
2021 2020
GBPm GBPm GBPm
--------------------------------------- --------- --------- -----------
Finance costs
Finance costs in respect of borrowings
and lease liabilities(1) (72.3) (74.1) (149.8)
Fair value measurements and other (0.8) (2.5) (2.5)
Net finance costs arising on defined
benefit retirement scheme (5.0) (3.9) (7.8)
Net finance costs arising on other
employee benefit schemes (1.8) (4.2) (8.5)
--------------------------------------- --------- --------- -----------
Total finance costs (79.9) (84.7) (168.6)
--------------------------------------- --------- --------- -----------
Finance income
Finance income in respect of cash and
short-term investments(2) 3.4 5.2 8.8
Fair value measurements and other 1.0 3.0 2.5
--------------------------------------- --------- --------- -----------
Total finance income 4.4 8.2 11.3
--------------------------------------- --------- --------- -----------
Net finance costs (75.5) (76.5) (157.3)
--------------------------------------- --------- --------- -----------
(1) Finance costs in respect of borrowings and lease liabilities
include interest payable on interest rate swaps of GBP2.5m (July
2020: GBP2.8m; January 2021: GBP5.3m) and lease liabilities of
GBP49.2m (July 2020: GBP53.7m; January 2021: GBP104.2m).
(2) Finance income in respect of cash and short-term investments
includes interest receivable on interest rate swaps of GBP3.1m
(July 2020: GBP3.1m; January 2021: GBP6.1m).
Capitalised borrowing costs totalled GBP0.3m (July 2020: GBP0.9m
; January 2021: GBP2.2m) of which GBPnil (July 2020: GBP0.8m
January 2021: GBP2.1m) were capitalised within intangible assets
and GBP0.3m (July 2020: GBP0.1m; January 2021: GBP0.1m) were
capitalised within property, plant and equipment.
8 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 excluding any discrete items. The tax charge on
discrete items at half year is calculated separately. The effective
tax rate at the half year is higher than would be expected for the
full-year. This is as a result of a significant number of discrete
items at the half year.
On 3 March 2021, the UK Government announced its intention to
increase the rate of corporation tax from 19% to 25% with effect
from 1 April 2023. The Finance Act 2021 received Royal Assent on 10
June 2021. The impact of the enacted change to the Group is an
increase to the net deferred tax asset on the balance sheet of
GBP32.7m.
9 Property, plant and equipment, Intangible assets, and Right-of-use assets
Property, Intangible Right-of-use Total
plant and assets assets
equipment
GBPm GBPm GBPm GBPm
--------------------------------- ---------- ---------- ------------ -------
Net book value at 30 January
2021 2,983.5 467.9 1,540.2 4,991.6
Additions(1) 67.7 53.5 53.0 174.2
Depreciation and amortisation(2) (109.7) (64.9) (77.5) (252.1)
Disposals and write-offs (0.3) (0.1) (0.1) (0.5)
--------------------------------- ---------- ---------- ------------ -------
Net book value at 31 July
2021 2,941.2 456.4 1,515.6 4,913.2
--------------------------------- ---------- ---------- ------------ -------
(1) For the period ended 31 July 2021, additions for the year
include the non-cash capital expenditure accrual on property, plant
and equipment of GBP14.7m (January 2021: GBP24.4m) and intangible
assets of GBP1.7m (January 2021: GBP1.1m).
(2) For the period ended 31 July 2021 depreciation and
amortisation includes net impairment charges of GBP(9.1)m to
right-of-use assets (January 2021: GBP(209.9)m) and GBP(1.9)m to
land and buildings (January 2021: GBP(274.0)m), and an impairment
release of GBP3.2m to fixtures and fittings (January 2021:
GBP(41.8)m).
Intangible assets primarily relate to internally developed
computer software.
Right-of-use assets are recognised in relation to the Group's
leases, representing the economic benefits of the Group's right to
use the underlying leased assets. The Group's lease portfolio is
principally comprised of property leases of land and buildings in
relation to Waitrose and John Lewis (JL) stores, distribution
centres and head offices. The Group also holds a number of vehicle
and equipment leases and service agreements deemed to meet the
definition of a lease under IFRS 16.
The impairment review methodology is unchanged from that
described in the Annual Report and Accounts for the year ended 30
January 2021. The review compares the recoverable amount for each
Cash Generating Unit (CGU), typically a store, to the carrying
value on the balance sheet; this includes right-of-use assets. It
considers the Value in Use (VIU) of a CGU compared to the carrying
value in the first instance, and subsequently the fair value less
cost to dispose if the VIU is lower than the CGU carrying
value.
External market valuations are regularly obtained by the Group
and used within the consideration of fair value less cost to
dispose. This is an annual exercise completed ahead of each year
end that considers the available market for department store
properties and factors in the impact of the Covid-19 pandemic.
The key assumptions in the calculations are the discount rate,
expected sales and margin performance, the allocation of online
sales to stores in the determination of the JL store Cash
Generating Units (CGUs) and market valuations considered in fair
value less costs of disposal calculations. The discount rate is a
pre-tax rate derived from the Group's weighted average cost of
capital and is 10% (Jan 2021: 7%) in Waitrose and 14% (Jan 2021:
10%) in JL.
Following the impairment review, the Group recognised a net
impairment charge arising from JL stores as an exceptional charge
of GBP(0.6)m across property, plant and equipment and right-of-use
assets. Additionally, a GBP(9.9)m charge was recognised as
exceptional in relation to our Physical Estate programme and
represents the impairment of assets in our JL store closure
programme. A GBP2.7m credit relating to Waitrose stores was not
recognised as exceptional. The total impairment charge at the half
year is GBP(7.8)m.
The existing provisions have an underlying reduction due to
utilisation of the provision, which is principally due to store
exits: GBP42.5m for JL and GBP4.1m for Waitrose.
John Lewis store impairment
The Covid-19 pandemic continues to represent an impairment
trigger. As such, all John Lewis (JL) stores have been tested for
impairment, in line with last year.
The calculations use a post-tax cash flow based on a five year
plan approved by the Board. The forecasts are then extrapolated
beyond the five-year period using a long-term growth rate of 2.0%.
The plan has been prepared following the lifting of lockdown
restrictions associated with the pandemic and including the impact
of the updated property strategy. The key assumptions in this plan
are the recovery of JL shop sales from the impact of Covid-19
restrictions, year on year sales growth and margin assumptions. The
plan differentiates between online and shop sales growth/decline,
which is relevant to our store CGUs that continue to include an
allocation of online sales.
The impact of the JL impairment review is a net charge of
GBP(0.6)m to exceptionals. The cash flow forecasts across the John
Lewis store estate have been updated for the latest view of future
trading which includes the impact of the John Lewis property
strategy announced during the half year, allocation of online sales
and continued change in customer shopping behaviour. The updated
cash flow forecasts have led to a reversal of impairment charges of
GBP70.4m and new impairment charges of GBP(71.0)m.
For the JL business, there is significant ongoing market
uncertainty and changing customer behaviours. The JL impairment
estimation is most sensitive to changes in sales and margin
forecasts, as well as the allocation of online sales, and therefore
sensitivity analysis has focused on these aspects of the impairment
evaluation. Management's review of historical forecasts shows an
average variance for the sales growth of 2.7%. Reducing the sales
growth by this percentage would increase the net JL impairment by
GBP(19.8)m.
Judgement is required as to whether online sales (and associated
costs) should be attributed to JL stores for the purposes of
impairment testing. Our allocation of a proportion of online sales,
made by customers who shop both online and in shops('omnichannel'),
is supported by the 'omnichannel' approach embedded in our
strategy, management and operation of our stores. It reflects the
role our stores play in providing customers with an opportunity to
browse, touch and feel our product range before purchasing online.
The merchandising of the product offer in our physical estate
provides inspiration for our customers who may then choose to
purchase online (in particular for larger items and more considered
purchases in our Home offer). For these reasons, online sales are
allocated to stores based on Click & Collect online sales, and
also a further proportion of online sales to reflect the role the
store plays in facilitating online purchases. This further
allocation is based on evidence of a physical touchpoint with the
store through previous purchasing behaviour. The allocations of the
sales and weighting of the drivers (i.e. Click & Collect versus
greater allocation to reflect the role the store plays in
facilitating online sales) varies by store.
Given the pace of change in customer behaviour and the
transition to online purchasing, as well as the sensitivity of the
JL impairment to the online allocation, management continue to
consider how further changes could impact impairment. If the online
allocation assumptions were reduced such that only online sales
serviced through instore Click & Collect were allocated to
CGUs, this would further increase the impairment provision by
GBP(146.5)m. If no online sales were attributed to the CGUs, the
impairment provision would increase by GBP(211.5)m.
The discount rate used in the calculation of cash flows is
derived from the JL Weighted Average Cost of Capital (WACC) which
has increased since the year end. An increase in the discount rate
assumption of 100 bps would increase the JL impairment by
GBP(3.5)m.
Waitrose store impairment
The impairment calculations for Waitrose stores use a post-tax
cash flow based on a five year plan approved by the Board. The
forecasts are then extrapolated beyond the five-year period using a
long-term growth rate of 2.0%. The key assumptions in this plan are
the stabilisation of sales following the pandemic disruption, year
on year sales growth and margin assumptions. Waitrose online sales
are allocated directly to the store that the online order is picked
and fulfilled from. Online sales are therefore included in the
Waitrose CGUs as the sales are directly attributable to store
activity; this is not considered a key judgement.
The Waitrose Customer Fulfilment Centres (CFCs) have been
included in the impairment review alongside the store CGUs in a way
that reflects the commercial reality that the CFCs are designed to
serve specific regional postcodes of the UK alongside the
stores.
The impact of the Waitrose impairment review is a net credit of
GBP2.7m within operating expenses. It includes the release of
previous impairment charges of GBP9.5m due to improved store
performance which has been judged to be sustainable. These
reversals have been partly offset by new impairment charges of
GBP(6.8)m relating to performance deterioration on a small number
of stores.
The Waitrose impairment estimation is most sensitive to changes
in the sales growth and margin assumptions. Based on realistic and
reasonable variations to the forecast currently used by the
business, reducing the sales growth by 0.7% and the margin
assumption by 50 bps would together increase the impairment by
GBP(7.5)m. Management's review of historical forecasts shows an
average variance for the sales growth of 0.6%. Reducing the sales
growth by this percentage would increase the Waitrose impairment by
GBP(1.6)m.
The discount rate used in the calculation of cash flows is
derived from the Waitrose Weighted Average Cost of Capital (WACC)
which has increased from year end. Increasing the discount rate by
100 bps would increase the Waitrose impairment by GBP(2.4)m.
10 Assets held for sale
At 31 July 2021, there were no properties recorded as held for
sale.
At 30 January 2021, one property asset in Waitrose was recorded
as held for sale with a total carrying value of GBP10.6m and has
been subsequently sold.
At 25 July 2020, four property assets in Waitrose were recorded
as held for sale with a total carrying value of GBP14.1m and have
been subsequently sold.
11 Provisions
Long Customer Insurance Reorganisation Other Total
leave refunds claims
GBPm GBPm GBPm GBPm GBPm GBPm
------------------- ------- -------- --------- -------------- ------ -------
At 30 January 2021 (150.7) (37.2) (26.7) (90.4) (51.0) (356.0)
------------------- ------- -------- --------- -------------- ------ -------
Charged to income
statement (4.9) (27.7) (7.0) (105.9) (2.1) (147.6)
Released to income
statement - - 0.9 24.0 4.6 29.5
Utilised 3.0 37.2 4.2 46.9 5.5 96.8
------------------- ------- -------- --------- -------------- ------ -------
At 31 July 2021 (152.6) (27.7) (28.6) (125.4) (43.0) (377.3)
------------------- ------- -------- --------- -------------- ------ -------
Of which:
Current (35.1) (27.7) (11.1) (125.4) (8.4) (207.7)
Non-current (117.5) - (17.5) - (34.6) (169.6)
------------------- ------- -------- --------- -------------- ------ -------
The Group has a long leave scheme, open to all Partners, which
provides up to six months paid leave after 25 years' service. There
is no proportional entitlement for shorter periods of service. The
provision for the liabilities under the scheme is assessed on an
actuarial basis, reflecting Partners' expected service profiles,
salary growth, National Insurance and overtime earnings
assumptions. The real discount rate applied differs from the real
discount rate used for the Group's retirement benefit obligations
(note 12) as it reflects a rate appropriate to the shorter duration
of the long leave liability so as to accrue the cost over Partners'
service periods.
Provisions for customer refunds reflect the Group's expected
liability for returns of goods sold, based on experience of rates
of return.
Provisions for insurance claims are in respect of the Group's
employer's public and vehicle third-party liability insurances. The
provisions are based on reserves held in the Group's captive
insurance company, JLP Insurance Limited. These reserves are
established using independent actuarial assessments wherever
possible, or a reasonable assessment based on past claims
experience.
Provisions held for reorganisation relate to strategic
restructuring and redundancy programmes; principally in relation to
the ongoing review of the Group's physical estate, our shop
management reorganisation, as well as head office and central
function restructuring.
Other provisions primarily include property related costs.
12 Retirement benefit obligations
The pension scheme operated by the Group is the John Lewis
Partnership Trust for Pensions. The scheme includes a defined
benefit section, providing pensions and death benefits to members.
All contributions to the defined benefit section of the scheme are
funded by the Group. The scheme also includes a defined
contribution section. Contributions to the defined contribution
section of the scheme are made by both Partners and the Group.
On 1 April 2020, the defined benefit section of the scheme
closed to future accrual. Following closure, members' deferred
pensions now increase annually by inflation up to 5% per annum
(measured using CPI).
Pension commitments have been calculated based on the most
recent actuarial valuations, as at 31 March 2019, which have been
updated by the actuaries to reflect the assets and liabilities of
the scheme as at 31 July 2021. The next triennial actuarial
valuation of the scheme will take place as at 31 March 2022.
Scheme assets are stated at market value at 31 July 2021.
The following financial assumptions have been used:
25 July 30 January
31 July 2021 2020 2021
------------------------------------ ------------ ------- ----------
Discount rate 1.70% 1.50% 1.55%
Future retail price inflation (RPI) 3.05% 2.70% 2.75%
Future consumer price inflation
(CPI) 2.60% 1.90% 2.30%
Increase in pensions - in payment
Pre-April 1997 1.85% 1.55% 1.75%
April 1997 - April 2016 2.85% 2.60% 2.65%
Post-April 2016 1.85% 1.55% 1.75%
Increase in pensions - deferred 2.60% 1.90% 2.30%
------------------------------------- ------------ ------- ----------
The movement in the net defined benefit liability in the period
is as follows:
Half year
to Year to
Half year to 25 July 30 January
31 July 2021 2020 2021
GBPm GBPm GBPm
------------------------------------- ------------- --------- -----------
Net defined benefit liability
at beginning of period (646.9) (417.4) (417.4)
Operating cost/Pension expense (3.9) (23.0) (26.6)
Interest cost on pension liabilities (57.1) (64.1) (128.1)
Interest income on assets 52.1 60.2 120.3
Contributions 7.1 26.8 42.3
Total gains/(losses) recognised
in equity 484.8 (206.3) (237.4)
------------------------------------- ------------- --------- -----------
Net defined benefit liability
at end of period (163.9) (623.8) (646.9)
------------------------------------- ------------- --------- -----------
The post-retirement mortality assumptions used in valuing the
pension liabilities were based on the 'S2 Light' (30 January 2021:
'S2 Light'; 25 July 2020: 'S2 Light') series standard tables. Based
on scheme experience, the probability of death at each age was
multiplied by 127% for males and 106% for females who were non
pensioners and 130% for males and 109% for females who were
pensioners (30 January 2021: 127% for males and 106% for females;
25 July 2020: 127% for males and 106% for females). Future
improvements in life expectancy have been allowed for in line with
the latest CMI model projections subject to a long-term trend of
1.25% (30 January 2021: 1.25%; 25 July 2020: 1.25%). The average
life expectancies assumed were as follows:
31 July 2020 30 January
2021
Men Women Men Women
----------------------------------- ------ ------- ----- ------
Average life expectancy for a
65 year old (in years) 20.9 23.3 21.1 23.4
Average life expectancy at age
65, for a 50 year old (in years) 21.9 24.6 22.0 24.5
----------------------------------- ------ ------- ----- ------
13 Reconciliation of loss before tax to cash generated from operations before Partnership Bonus
Half year Half year
to to Year to
31 July 25 July 30 January
2021 2020 2021
GBPm GBPm GBPm
------------------------------------------- --------- --------- -----------
Loss before tax (28.6) (634.5) (518.4)
Amortisation and write offs of intangible
assets (1) 64.9 65.1 135.6
Depreciation (1) 187.2 719.0 906.1
Share of (profit)/loss of joint venture
(net of tax) (0.5) 0.4 (0.9)
Net finance costs 75.5 76.5 157.3
Partnership Bonus - - -
Fair value (gains)/losses on derivative
financial instruments (1.2) 1.2 (0.3)
Loss/(profit) on disposal of property,
plant and equipment and intangible assets 2.3 (10.0) (21.0)
Decrease/(increase) in inventories 14.2 53.6 (30.2)
(Increase)/decrease in receivables (50.1) 23.0 80.0
(Decrease)/increase in payables (51.7) (42.1) 41.6
Increase/(decrease) in retirement benefit
obligations 1.8 (1.3) (8.2)
Increase in provisions 19.5 43.7 78.4
------------------------------------------- --------- --------- -----------
Cash generated from operations before
Partnership Bonus 233.3 294.6 820.0
------------------------------------------- --------- --------- -----------
(1) Includes net impairment charges
14 Analysis of net debt
30 January Cash flow Other non- 31 July
2021 cash movements 2021
GBPm GBPm GBPm GBPm
--------------------------------- ---------- --------- --------------- ---------
Non-current assets
Derivative financial instruments 0.1 - 0.7 0.8
--------------------------------- ---------- --------- --------------- ---------
0.1 - 0.7 0.8
--------------------------------- ---------- --------- --------------- ---------
Current assets
Cash and cash equivalents 1,518.2 (485.4) - 1,032.8
Short-term investments 0.3 391.5 - 391.8
Derivative financial instruments 7.2 0.8 (2.5) 5.5
--------------------------------- ---------- --------- --------------- ---------
1,525.7 (93.1) (2.5) 1,430.1
--------------------------------- ---------- --------- --------------- ---------
Current liabilities
Borrowings and overdrafts (75.0) 75.0 - -
Lease liabilities (127.3) 127.0 (135.5) (135.8)
Derivative financial instruments (20.9) 9.7 (9.1) (20.3)
--------------------------------- ---------- --------- --------------- ---------
(223.2) 211.7 (144.6) (156.1)
--------------------------------- ---------- --------- --------------- ---------
Non-current liabilities
Borrowings (800.0) - - (800.0)
Unamortised bond transaction
costs 8.8 - (0.8) 8.0
Fair value adjustment for
hedged element on bonds (4.2) - 1.7 (2.5)
Lease liabilities (1,910.0) - 30.2 (1,879.8)
Derivative financial instruments (2.7) - 2.1 (0.6)
--------------------------------- ---------- --------- --------------- ---------
(2,708.1) - 33.2 (2,674.9)
--------------------------------- ---------- --------- --------------- ---------
Total net debt (1,405.5) 118.6 (113.2) (1,400.1)
--------------------------------- ---------- --------- --------------- ---------
During the period ended 31 July 2021, one term loan of GBP75m
due for repayment in November 2021, was repaid early.
Reconciliation of net cash flow to
net debt
------------------------------------- --------- --------- -----------
Half year Half year Year to
to to 30 January
31 July 25 July 2021
2021 2020
GBPm GBPm GBPm
------------------------------------- --------- --------- -----------
(Decrease)/increase in net cash and
cash equivalents in the period (485.4) 952.7 919.9
Cash outflow/(inflow) from movement
in short-term investments 391.5 (291.1) (316.1)
Cash outflow/(inflow) from borrowing 75.0 (448.3) (150.0)
Cash outflow from movement in other
net debt items 137.5 85.1 199.7
------------------------------------- --------- --------- -----------
Cash movement in net debt for the
period 118.6 298.4 653.5
Opening net debt (1,405.5) (1,915.6) (1,915.6)
Non-cash movements in net debt for
the period (113.2) (34.3) (143.4)
------------------------------------- --------- --------- -----------
Closing net debt (1,400.1) (1,651.5) (1,405.5)
------------------------------------- --------- --------- -----------
15 Management of financial risks
The principal financial risks to which the Group is exposed are
capital and long-term funding risk, liquidity risk, interest rate
risk, foreign currency risk, credit risk, and energy risk.
This condensed set of interim financial statements does not
include all risk management information and disclosures required in
the annual financial statements and should be read in conjunction
with the Annual Report and Accounts for the year ended 30 January
2021. During the half year to 31 July 2021, the Group has continued
to apply the financial risk management process and policies as
detailed in the Annual Report and Accounts for the year ended 30
January 2021.
Valuation techniques and assumptions applied in determining the
fair value of each class of asset or liability are consistent with
those used as at 30 January 2021 and reflect the current economic
environment.
Fair value estimation
The different levels per the IFRS 13 fair value hierarchy have
been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices);
Level 3: inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs).
During the half year to 31 July 2021, there have been no
transfers between any levels of the IFRS 13 fair value hierarchy
and there were no reclassifications of financial assets as a result
of a change in the purpose or use of those assets.
The fair value of a derivative financial instrument represents
the difference between the value of the outstanding contracts at
their contracted rates and a valuation calculated using the forward
rates of exchange and interest rates prevailing at the balance
sheet date. The fair value of the derivative financial instruments
held by the Group are classified as Level 2 under the IFRS 13 fair
value hierarchy, as all significant inputs to the valuation model
used are based on observable market data and are not traded in an
active market. At 31 July 2021, the net fair value of derivative
financial instruments was GBP14.6m, liability (30 January 2021:
GBP16.3m, liability; 25 July 2020: GBP0.3m, asset).
The following table compares the Group's liabilities held at
amortised cost, where there is a difference between carrying value
(CV) and fair value (FV):
31 July 2021 25 July 2020 30 January 2021
GBPm GBPm GBPm GBPm GBPm GBPm
CV FV CV FV CV FV
---------------------- ------- ------- ------- ------- -------- -------
Financial liabilities
Listed bonds (592.0) (659.8) (590.4) (580.0) (591.2) (641.5)
---------------------- ------- ------- ------- ------- -------- -------
The fair values of the Group's listed bonds have been determined
by reference to market price quotations and classified as Level 1
under the IFRS 13 fair value hierarchy. For other financial assets
and liabilities, there are no material differences between carrying
value and fair value.
16 Capital commitments
At 31 July 2021, contracts had been entered into for future
capital expenditure of GBP49.2m (30 January 2021: GBP35.5m; 25 July
2020: GBP31.3m) of which GBP44.1m (30 January 2021: GBP30.5m; 25
July 2020: GBP22.1m) relates to property, plant and equipment and
GBP5.1m (30 January 2021: GBP5.0m; 25 July 2020: GBP9.2m) relates
to intangible assets.
17 Related party transactions
There have been no material changes to the principal
subsidiaries listed in the Annual Report and Accounts for the year
ended 30 January 2021. All related party transactions arise during
the ordinary course of business. There were no material changes in
the transactions or balances during the half year ended 31 July
2021.
18 Subsequent events
There are no disclosable subsequent events.
Statement of Directors' responsibilities
The Directors confirm that to the best of their knowledge the
condensed set of interim financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
For and by Order of the Board
Sharon White , Chairman
Berangere Michel , Executive Director, Finance
15 September 2021
([1]) Profit before Partnership Bonus, tax and exceptional items
(PBTBE)
([2]) Loss before Partnership Bonus, tax and exceptional
items
([3]) Rates relief in the half: GBP23m in the Government's
original scheme and GBP35m in the extension
([4]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([5]) Source: Kantar data March 2020 to July 2021
([6]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([7]) Profit before Partnership Bonus, tax and exceptional items
(PBTBE)
([8]) Loss before Partnership Bonus, tax and exceptional
items
([9]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([10]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([11]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([12]) All references to sales are total trading sales which
includes VAT, sale or return and other accounting adjustments
([13])
https://www.johnlewispartnership.co.uk/csr/our-strategy.html
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