TIDMSBRY
RNS Number : 9973P
Sainsbury(J) PLC
16 October 2019
16 October 2019
J Sainsbury plc
2018/19 Financial Statements - restated for IFRS 16
As previously announced, J Sainsbury plc is adopting the fully
retrospective approach to the new IFRS 16 lease standard, effective
for the Group for the 52 weeks ending 7 March 2020.
IFRS 16 will have no economic effect on the business or cash. It
does however impact the way assets, liabilities and the income
statement are presented.
Our first Financial Statements to be prepared under IFRS 16 will
be Interims 2019/20, to be reported on 7 November 2019. Ahead of
those results, we are today publishing first half and full year
restated 2018/19 results on a post-IFRS 16 basis.
-- In line with prior guidance, restated underlying profit
before tax for 2018/19 reduces by GBP34 million and statutory
profit before tax reduces by GBP37 million. Underlying profit
before tax therefore reduces from GBP635 million to GBP601 million,
and statutory profit before tax reduces from GBP239 million to
GBP202 million
-- This restatement comprises GBP747 million reduction in rent,
GBP(470) million increase in depreciation, GBP(323) million
increase in underlying net finance costs and GBP12 million
reduction in other costs
-- The financial impact on the restated 2018/19 balance sheet
includes the recognition of right-of-use assets of GBP4,993
million, recognition of IFRS 16 lease liabilities of GBP(5,822)
million and recognition of deferred tax assets of GBP162 million.
2018/19 restated net assets reduce by GBP(673) million and retail
net debt increases from GBP(1,142) million to GBP(6,844)
million
-- 2018/19 Net debt to EBITDAR of 3.1 times compares to
previously reported adjusted Net debt to EBITDAR of 3.2 times
See below for 2018/19 full year and half year restated Financial
Statements. See
https://www.about.sainsburys.co.uk/investors/results-reports-and-presentations
for a more detailed disclosure on the impact of IFRS 16.
Investor Relations Enquiries Media Enquiries
James Collins +44 (0) 7801 813 074 Rebecca Reilly +44 (0) 20
7695 7295
These condensed consolidated financial statements for the 52
weeks ended 9 March 2019 do not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. A copy of the
statutory accounts for the 52 weeks ended 9 March 2019 (as
reported) have been filed with the Registrar of Companies following
their approval at the AGM. The auditor's report on those accounts
was not qualified, did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying the report and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
Group income statement
28 weeks to IFRS 16 28 weeks to 52 weeks IFRS 16 52 weeks
22 September Impact 22 September 9 March Impact 9 March
2018 2018 2019 2019
(reported) (restated) (reported) (restated)
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------------- -------- ------------- ----------- -------- -----------
Revenue 15,127 - 15,127 29,007 - 29,007
Cost of sales (14,100) 146 (13,954) (27,000) 281 (26,719)
------------------------------------
Gross profit 1,027 146 1,173 2,007 281 2,288
Administrative expenses (891) 5 (886) (1,733) 8 (1,725)
Other income 16 - 16 38 - 38
------------------------------------
Operating profit 152 151 303 312 289 601
Finance income 28 1 29 22 2 24
Finance costs (49) (177) (226) (99) (328) (427)
Share of post-tax profit from joint
ventures and associates 1 - 1 4 - 4
------------------------------------
Profit before tax 132 (25) 107 239 (37) 202
Analysed as:
Underlying profit before tax 302 (23) 279 635 (34) 601
Non-underlying items (170) (2) (172) (396) (3) (399)
132 (25) 107 239 (37) 202
---------------------------------- ------------- -------- ------------- ----------- --------
Income tax credit/(expense) 12 4 16 (20) 4 (16)
Profit for the financial period 144 (21) 123 219 (33) 186
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Earnings per share pence pence pence pence
---------------------------------- ------------- -------- ------------- ----------- -------- -----------
Basic earnings 6.1 (1.0) 5.1 9.1 (1.5) 7.6
Diluted earnings 5.8 (0.9) 4.9 8.9 (1.3) 7.5
Underlying basic earnings 10.3 (0.9) 9.4 22.0 (1.4) 20.7
Underlying diluted earnings 9.5 (0.7) 8.8 20.3 (1.2) 19.1
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Group balance sheet
28 weeks IFRS 28 weeks 52 weeks IFRS 52 weeks
to 16 to to 16 to
22 September Impact 22 September 9 March Impact 9 March
2018 2018 2019 2019
(reported) (restated) (reported) (restated)
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Non-current assets
Property, plant and equipment 9,782 (498) 9,284 9,708 (515) 9,193
Right-of-use asset - 5,055 5,055 - 4,993 4,993
Intangible assets 1,052 (1) 1,051 1,044 (1) 1,043
Investments in joint ventures
and associates 209 - 209 205 - 205
Financial assets at fair value
through other comprehensive
income 541 - 541 645 - 645
Other receivables 30 28 58 33 24 57
Amounts due from Financial
Services customers 2,752 - 2,752 3,349 - 3,349
Derivative financial instruments 18 - 18 9 - 9
Net retirement benefit surplus 266 - 266 959 - 959
14,650 4,584 19,234 15,952 4,501 20,453
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Current assets
Inventories 1,879 - 1,879 1,929 - 1,929
Trade and other receivables 659 (6) 653 661 (31) 630
Amounts due from Financial
Services customers 3,482 - 3,482 3,638 - 3,638
Financial assets at fair value
through other comprehensive
income 353 - 353 211 - 211
Derivative financial instruments 47 - 47 21 - 21
Cash and cash equivalents 1,463 - 1,463 1,121 - 1,121
-------------------------------------
7,883 (6) 7,877 7,581 (31) 7,550
Assets held for sale 8 - 8 8 - 8
7,891 (6) 7,885 7,589 (31) 7,558
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Total assets 22,541 4,578 27,119 23,541 4,470 28,011
------------------------------------- ------------- -------- ------------- ----------- -------- -----------
Current liabilities
Trade and other payables (4,824) 42 (4,782) (4,444) 71 (4,373)
Amounts due to Financial Services
customers and other deposits (5,336) - (5,336) (5,797) - (5,797)
Borrowings (255) (510) (765) (832) (517) (1,349)
Derivative financial instruments (6) - (6) (17) - (17)
Taxes payable (123) - (123) (204) - (204)
Provisions (133) 22 (111) (123) 14 (109)
-------------------------------------
(10,677) (446) (11,123) (11,417) (432) (11,849)
Net current liabilities (2,786) (452) (3,238) (3,828) (463) (4,291)
------------------------------------- ------------- -------- ------------- ----------- -------- -----------
Non-current liabilities
Other payables (333) 250 (83) (340) 253 (87)
Amounts due to Financial Services
customers and other deposits (1,850) - (1,850) (1,804) - (1,804)
Borrowings (1,388) (5,263) (6,651) (950) (5,192) (6,142)
Derivative financial instruments (9) - (9) (17) - (17)
Deferred income tax liability (287) 162 (125) (397) 162 (235)
Provisions (161) 57 (104) (160) 65 (95)
Net retirement benefit obligations - - - - - -
(4,028) (4,794) (8,822) (3,668) (4,712) (8,380)
------------------------------------ ------------- -------- ------------- ----------- -------- -----------
Net assets 7,836 (662) 7,174 8,456 (674) 7,782
------------------------------------- ------------- -------- ------------- ----------- -------- -----------
Equity
Called up share capital 629 - 629 630 - 630
Share premium account 1,140 - 1,140 1,147 - 1,147
Capital redemption reserve 680 - 680 680 - 680
Merger reserve 568 - 568 568 - 568
Other reserves 170 - 170 172 - 172
Retained earnings 4,153 (662) 3,491 4,763 (674) 4,089
-------------------------------------
Total equity before perpetual
securities 7,340 (662) 6,678 7,960 (674) 7,286
Perpetual capital securities 248 - 248 248 - 248
Perpetual convertible bonds 248 - 248 248 - 248
Total equity 7,836 (662) 7,174 8,456 (674) 7,782
------------------------------------- ------------- -------- ------------- ----------- -------- -----------
Group cash flow statement
28 weeks 28 weeks
to IFRS 16 to 52 weeks to IFRS 16 52 weeks to
22 September Impact 22 September 9 March Impact 9 March
2018 2018 2019 2019
(reported) (restated) (reported) (restated)
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------------- -------- ------------- ------------ -------- ------------
Cash flows from operating activities
Profit before tax 132 (25) 107 239 (37) 202
Net finance costs 21 176 197 77 326 403
Share of post-tax-profit from joint
ventures and associates (1) - (1) (4) - (4)
Operating profit 152 151 303 312 289 601
Adjustments for:
Depreciation expense 354 252 606 649 470 1,119
Amortisation expense 75 - 75 143 - 143
Non-cash adjustments arising from
acquisitions - - - (2) - (2)
Financial Services impairment
losses on loans and advances 49 - 49 98 - 98
Loss/(profit) on sale of
properties 12 - 12 17 - 17
Loss on disposal of intangibles 1 - 1 - - -
Impairment charge of property,
plant and equipment - - - 3 - 3
Share-based payments expense 19 - 19 39 - 39
Retirement benefit obligations (25) - (25) 45 - 45
Operating cash flows before changes
in working capital 637 403 1,040 1,304 759 2,063
Changes in working capital
Increase in inventories (69) - (69) (118) - (118)
Increase in current financial
assets (180) - (180) (97) - (97)
Decrease/(increase) in trade and
other receivables 67 (13) 54 74 18 92
Increase in amounts due from
Financial Services customers and
other deposits (672) - (672) (1,480) - (1,480)
Increase in trade and other
payables 415 9 424 94 (23) 71
Increase in amounts due to
Financial Services customers and
other deposits 662 - 662 1,077 - 1,077
(Decrease)/increase in provisions
and other liabilities (75) 9 (66) (105) 12 (93)
Cash generated from operations 785 408 1,193 749 766 1,515
Interest paid (33) - (33) (63) - (63)
Corporation tax paid (22) - (22) (68) - (68)
Net cash generated from operating
activities 730 408 1,138 618 766 1,384
-------------------------------------- ------------- -------- ------------- ------------ -------- ------------
Cash flows from investing activities
Purchase of property, plant and
equipment (237) 2 (235) (478) 4 (474)
Initial direct costs on right-of-use
assets - (6) (6) - (11) (11)
Purchase of intangible assets (58) - (58) (116) - (116)
Proceeds from disposal of property,
plant and equipment 34 - 34 64 - 64
Proceeds from financial assets at
fair value through other
comprehensive income - - - 39 - 39
Acquisition of subsidiaries, net of
cash acquired - - - - - -
Investment in joint ventures (5) - (5) (5) - (5)
Interest received 2 - 2 4 - 4
Dividends and distributions received 16 - 16 18 - 18
Net cash used in investing activities (248) (4) (252) (474) (7) (481)
-------------------------------------- ------------- -------- ------------- ------------ -------- ------------
Cash flows from financing activities
Proceeds from issuance of ordinary
shares 11 - 11 22 - 22
Proceeds from borrowings - - - 135 - 135
Proceeds from financial assets 39 - 39 - - -
Repayment of borrowings (581) - (581) (593) - (593)
Purchase of own shares (12) - (12) (30) - (30)
Repayment of capital element of
obligations under finance lease
borrowings (25) (224) (249) (32) (425) (457)
Interest elements of obligations
under finance lease payments (4) (180) (184) (7) (334) (341)
Dividends paid on ordinary shares (156) - (156) (224) - (224)
Dividends paid on perpetual
securities (20) - (20) (23) - (23)
Net cash used in financing activities (748) (404) (1,152) (752) (759) (1,511)
-------------------------------------- ------------- -------- ------------- ------------ -------- ------------
Net (decrease)/increase in cash and
cash equivalents (266) - (266) (608) - (608)
Opening cash and cash equivalents 1,728 - 1,728 1,728 - 1,728
Closing cash and cash equivalents 1,462 - 1,462 1,120 - 1,120
-------------------------------------- ------------- -------- ------------- ------------ -------- ------------
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END
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