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John Lewis reports 'strong' half-year financial results
10:24am Thursday 12th September 2013 in News
John Lewis Partnership reported ''strong'' half-year results today after its department stores and supermarkets continued to grow market share.
The employee-owned partnership, which has 39 John Lewis shops and 294 Waitrose supermarkets, racked up £4.7 billion in sales in the six months to July 27, an increase of 7 per cent despite comparisons with strong trading last summer.
Underlying profits were 4 per cent higher at £115.8 million, although a payment of £40 million to staff following the miscalculation of holiday pay over the last seven years meant bottom-line profits fell 38.5 per cent to £68.5 million.
Partnership chairman Sir Charlie Mayfield said trading conditions were showing signs of improvement and that John Lewis and Waitrose had grown sales ''well ahead'' of their respective markets during a strong first half.
He added: ''Looking ahead, I'm encouraged by progress this year and am confident of the plans we have in place for Christmas.
''Despite a strong second half last year, both during the Olympics and at Christmas, I expect us to trade positively in the second half.''
In the first six weeks of the second half, John Lewis sales rose by 5.1 per cent on a like-for-like basis, while Waitrose was 4.4 per cent higher.
The Partnership said Waitrose had outperformed the sector for more than four years and that its market share stood at 4.9 per cent - 0.3 per cent higher than a year ago. Its sales in the first half were up by 7.8 per cent to £3 billion, or 6.9 per cent on a like-for-like sales basis, as operating profits climbed 12.8 per cent to £160.2 million.
Department store profits were up 10 per cent to £50.1 million after sales growth of 6.6% to £1.71 billion, an increase of 5.1% on a same-store basis.
Investment costs of £53.2 million, including in store refurbishments and IT, meant the division's overall profits fell 24 per cent to £34.7 million.
In March, the business announced that employees would receive 17 per cent of their salary as part of an annual bonus, equivalent to nearly nine weeks pay.
The business created a net figure of 800 new jobs, taking its headcount to around 85,500 staff.
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