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John Lewis Partnership plc Annual Report and Accounts 2014


GROUP PERFORMANCE Our results reflect the collective hard work of our Partners.


Group performance In 2013/14, the Partnership traded well, delivering good growth in sales and profit before exceptionals. Both Waitrose and John Lewis grew sales well ahead of their respective markets, increasing their market shares.


Partnership gross sales (inc VAT) were £10.2bn, an increase of £630.2m, or 6.6%, on last year. Revenue, which is adjusted for sale or return sales and excludes VAT, was £9.0bn, up by £562.3m or 6.6%.


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exceptional item Partnership operating profit was £423.6m, down £29.8m, or 6.6% on last year. This includes an exceptional cost of £47.3m following a review of the Partnership’s holiday pay policy during the year. Excluding the exceptional item, operating profit was £470.9m, an increase of £17.5m or 3.9%.


The exceptional item comprises costs of £39.3m for payments to Partners and associated expenses, and £8.0m for an increase in future pension liabilities.


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Bonus and tax Profit before Partnership Bonus and tax was £329.1m, down by £14.2m, or 4.1% on last year with the decline wholly attributable to the exceptional item. Excluding this it was £376.4m, up by £33.1m or 9.6%.


Partnership Bonus These results reflect the collective hard work of our Partners who, as co-owners, each received the same percentage of annual pay as Partnership Bonus. Partners shared £202.5m in profit, which represents 15% of pay or the equivalent of nearly 8 weeks’ pay.


Other 7%


Distribution 12%


Refurbishment and other branch spend 30%


Investment in the future Capital investment in 2013/14 was £533.1m, an increase of £156.2m (41.4%) on the previous year. This includes £55.8m on freehold properties.


The majority of our spend continues to be in our store base, either on new stores or the refurbishment of existing ones. However, to enhance the agility and robustness of our systems and infrastructure, we have also significantly increased our capital investment in distribution and IT in the year.


Investment in Waitrose was £316.6m, up £118.4m (59.7%) on the previous year, and in John Lewis investment was £174.8m, up £30.5m (21.1%).


We expect the higher level of capital investment to continue in 2014/15, as our employee-owned model allows us to invest for the long term.


Capital investment by category (%)


INVESTMENT 26% IT


New Branches 25%


We are investing in our store base as well as our IT and distribution infrastructure to address our customers’ changing needs.


Helen Weir, Finance Director


PENSION BENEFIT REVIEW


The Partnership is currently engaged in discussions with the Partnership Council on the level and form of the future provision of pension benefits to Partners.


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