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John Lewis Partnership plc Annual Report and Accounts 2014
KEY PERFORMANCE INDICATORS (KPIs) CONTINUED
CASH FLOW FROM OPERATIONS (£m)
Definition Measure of how much cash has been generated by the Partnership’s business operations.
Why we use this measure Identifies whether the Partnership is generating sufficient positive cash flow to maintain and invest in our operations, or whether external financing may be required.
Commentary Cash inflow generated from operations fell by 21.0% principally due to higher normal pension contributions and lower improvements in working capital.
How we performed (£m)
648 745 759 979 773
2010 CAPITAL EXPENDITURE (£m)
Definition Expenditure relating to the acquisition or upgrade of physical assets, such as buildings or machinery and intangible assets, such as computer software.
Why we use this measure Measures how funds are being reinvested into the Partnership, particularly in the form of new shops and refurbishments, or to enhance the agility and robustness of systems and infrastructure in distribution and IT.
RETURN ON INVESTED CAPITAL (ROIC) (%)
Definition Post tax profit, adjusted for non-operating and exceptional items, as a proportion of average operating net assets, adjusted to reflect a deemed capital value for property lease rentals.
Why we use this measure Measures how efficiently the Partnership uses the capital invested in our operations. ROIC is a useful metric to assess the long-term value creation by our business.
Commentary ROIC has increased principally due to the strong profit growth in the year.
How we performed (%)
7.7% 7.9% 7.2% 8.2% 8.5%
Commentary Capital expenditure increased by 41.4%, principally on our store base, as well as in distribution and IT.
How we performed (£m)
445 493 518 376 533
2011
2012 2013
2014
2010
2011
20122013
2014
2010 GROSS SALES PER AVERAGE FTE (£000)
Definition Gross sales divided by the average number of Partners.
Why we use this measure Gross sales per FTE is an indicator of productivity within the Partnership. This is particularly useful when compared against other retailers – a higher result denotes higher productivity.
Commentary Gross sales per FTE increased due to the strong like-for-like sales growth in both Waitrose and John Lewis.
How we performed (£000)
161.7 169.2 170.7 179.2 182.0
2011
2012 2013
2014
2010
2011
2012 2013
2014
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