John Lewis Partnership plc annual report and accounts 2013

Investment in the future

Capital spending in 2012/13 was £376.9m, a decrease of £140.9m (27.2%). This reduction largely reflects fewer branch openings and lower spend on refurbishments. We expect capital spending in 2013/14 to return to 2011/12 levels.

Waitrose invested £198.2m, mainly on new branches opening in 2012/13 together with three extensions, branch refurbishments, investment in the implementation of a new warehouse management system to drive productivity in our supply chain, and also a number of retail systems improvements to aid efficiency and enhance the flexibility of our offer.

John Lewis invested £144.3m, with the mix of investment continuing to reflect the business strategy of opening new space, refurbishing key shops and investing in the information technology and distribution infrastructure to support omni-channel trading.

In addition, £34.4m was invested centrally, mainly in maintaining and modernising our information technology platforms, head office buildings and residential clubs

Cash flow and net debt

Cash generated from operations grew to £979.0m, an increase of £219.9m, or 29.0%.

At 26 January 2013, net debt was £371.9m, a decrease of £205.4m, or 35.6%, and gearing ratio decreased from 28.7% to 19.6%. During the year we repaid borrowings totalling £242m from available cash. In January 2013 we replaced a number of existing bilateral borrowing facilities with a new £325m five year syndicated facility, which was undrawn at year end.

Capital expenditure (£m)

2009 2010 2011 2012 2013

Waitrose: 234 303 354 293 198

John Lewis: 140 112 120 182 144

Group: 30 30 19 43 34

Operating cash flow and net debt (£m)

Total net debt: 432 402 548 577 372

Operating cash flow: 586 648 745 759 979

Gearing(1) ratio %

2009 2010 2011 2012 2013

25 24 27 29 20 

Gearing is net debt divided by net assets.

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