24 May 2024, 18:13
By Furniture News Sept 14, 2023

JLP reports improved H1, but Home sales suffer

John Lewis Partnership has reported an improved performance for the half year, narrowing losses before tax by 41% to £59m.

Before tax and exceptionals, losses fell to £57.3m (£66.8m a year earlier), a +14% improvement.

Liquidity was strong at £1.3b (£1.5b a year earlier), with borrowings unchanged at £650m. Cash generated from operations was £97.4m, £76.7m better than last year.

The partnership invested £196.9m in transformation and, after investments and financing activities, had an outflow of cash in the first half of £232.4m – an improvement of £238.4m YoY (the partnership generates most of its cash in the second half).

Total sales were £5.8b, up +2% YoY, while revenue was up +3%. Some 600,000 more customers shopped with the partnership in the half, taking the total number of customers to 21.4 million.

However, while Waitrose proved strong, John Lewis' sales were £2.1b, down -2%. While spending more on clothing, customers were cautious about big-ticket items in Home and Tech (down -5% and -4% respectively) – "in effect it’s been a case of ‘more loafers and fewer sofas’," says the retailer.

Interest-bearing credit is now available online, and will be available in-store from mid-October (ahead of peak), to help customers spread the cost of their purchases. 

The balance between store and online purchases remained broadly unchanged, at 43% and 57% respectively. Shop sales improved by +2%, driven by increased footfall, while online declined -4% owing to weaker conversion.

The partnership says that it was hit hard by inflation last year, which increased costs by £179m – and meaning it will take a further two years to deliver the proposed Partnership Plan (in 2027/28, rather than 2025/26). It adds that plans are on track to scale efficiencies in the second half, delivering over £100m benefit by the end of the year, while investing to modernise technology and data.

While the outlook remains uncertain, the partnership expects an improved full-year financial performance compared to last year's £77.6m loss before tax, partnership bonus and exceptionals. 

Sharon White, chairman, says: “The partnership is a unique model that has been tested and come through stronger many times in our 100-year history. While change is never easy - and there is a long road ahead - there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the partnership model remain high.” 

CEO Nish Kankiwala adds: “Our transformation to modernise our business is well under way, and I want to thank our partners for their efforts to give customers great service, quality and value when they shop with us in-store or online. There are no brands better placed than Waitrose and John Lewis to provide customers with what they need right now - to help them feel good and eat well.”

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