Interim Results 2016/17

5 October 2016

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Colleague interview with Dave Lewis and Alan Stewart

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Positive like-for-like sales and volume growth in all regions across the Group

  • UK like-for-like sales growth of 0.6% and Group like-for-like sales growth of 1.0%1
  • UK volumes up 2.1%; UK transactions up 1.6%
  • International volumes up 3.3%; International transactions up 0.3%

Significant progress against all three priorities

  • Competitive in the UK – all key customer metrics improving relative to the market
  • More secure balance sheet – net debt reduced by further £0.8bn since year-end
  • Rebuilding trust – brand health returned to highest level in more than four years2

Customer, colleague and supplier partner measures all improving

  • Most improved retailer in terms of customer recommendations3
  • 78% of colleagues recommend us as a ‘great place to work’ (up from 70% in 1H 2014/15)
  • Very strong improvement in UK supplier satisfaction measure at 78% (up from 51% in 2014/15)

Well-placed against our plans – on track to deliver £1.2bn Group operating profit before exceptional items for the full year

  • Rebuilding profitability whilst investing in our customer offer
  • Group operating profit before exceptional items up 60% in the first half
  • Exclusive fresh food brands performing ahead of plan; investment part-offset by mix benefit

Sharing our ambition to deliver 3.5-4.0% Group operating margin by 2019/20

  • Underpinned by six strategic drivers, we will strengthen our customer offer whilst creating long-term, sustainable value for shareholders
  • Includes £1.5bn further operating cost reductions, to be realised through a more efficient and responsive distribution system, a simpler store operating model & goods not for resale savings
  • Total capex will average £1.4bn per year to support this programme

Statutory results: statutory revenue £27.3bn, up 1.4%; statutory profit before tax £71m, down (28.3)%

1. Like-for-like is the growth in sales from stores that have been open for at least a year at a constant foreign exchange rate and includes online sales.

2. As per YouGov BrandIndex, August 2016.

3. As per the periodic Customer Spotlight Tracker.