REG - Sainsbury(J) PLC - 2018/19 Financial Statements restated for IFRS 16
RNS Number : 9973PSainsbury(J) PLC16 October 201916 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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