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Company Sainsbury(J) PLC
TIDM SBRY
Headline 2018/19 Financial Statements restated for IFRS 16
Released 07:00 16-Oct-2019
Number 9973P07

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 £34 million and statutory profit before tax reduces by £37 million. Underlying profit before tax therefore reduces from £635 million to £601 million, and statutory profit before tax reduces from £239 million to £202 million

·     This restatement comprises £747 million reduction in rent, £(470) million increase in depreciation, £(323) million increase in underlying net finance costs and £12 million reduction in other costs

·     The financial impact on the restated 2018/19 balance sheet includes the recognition of right-of-use assets of £4,993 million, recognition of IFRS 16 lease liabilities of £(5,822) million and recognition of deferred tax assets of £162 million. 2018/19 restated net assets reduce by £(673) million and retail net debt increases from £(1,142) million to £(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)




£m

£m

£m


£m

£m

£m











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 to

IFRS 16

28 weeks 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)



£m

£m

£m


£m

£m

£m

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 to

IFRS 16

28 weeks 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)


£m

£m

£m


£m

£m

£m









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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