7th Mar 2019 10:18
LONDON (Alliance News) - John Lewis Partnership PLC on Thursday reported a rise in its annual profit driven by a good performance from its supermarket chain Waitrose, while department store chain John Lewis continued to struggle.
For the year ended January 26, the company posted pretax profit, up 9.2% to GBP117.4 million from GBP107.5 million a year ago.
Pretax profit before partnership bonus and exceptional items, however, dropped 45% to GBP160.0 million from GBP292.8 million, mainly due to the significant profit reduction in department store chain John Lewis.
On an operational level, before partnership bonus and exceptional items, the group reported a GBP227.0 million profit, down 38% from GBP364.4 million a year ago.
Waitrose & Partners' operating profit rose 18% to GBP203.2 million, while at John Lewis & Partners, it declined 56% to GBP114.7 million from GBP257.8 million mainly due to weaker Home sales, higher technology costs, and margin pressure.
Overall revenue increased 1.0% to GBP10.32 billion from GBP10.22 billion a year ago, with Waitrose increasing sales by 1.2% to GBP6.43 billion and John Lewis by 0.7% to GBP3.89 billion.
"In line with expectations set out in June, our Partnership profits before exceptionals have finished substantially lower in what has been a challenging year, particularly in non-food," Chair Charlie Mayfield said.
He added: "While partnership profits were down, there were several areas where we have seen performance move forward, particularly in areas where we have invested."
For example, Waitrose's online grocery sales rose 14%, "well ahead of the market", as the company focused on developing the supermarket's own website Waitrose.com preparing to end a two-decade-old partnership with Ocado Group PLC.
Ocado last month, inked a deal with rival department store and grocery chain Marks & Spencer Group PLC to become its delivery partner.
Looking ahead, John Lewis said it is in a good position to manage the impact of the UK's exit from the European Union at the end of the month, with the main risk posed by a decrease in consumer confidence and spending.
"Given the current level of uncertainty, we expect 2019 trading conditions to remain challenging," it added.
Related Shares:
OcadoMarks & SpencerJLH.L