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John Lewis Partnership on Thursday reported an improved annual performance and restored its yearly bonus.
The operator of the eponymous department store chain, as well as grocer Waitrose, did not pay its customary partner bonus in the previous financial year and had ruled out restoring it until adjusted profit topped £150 million and its debt ratio fell below four times.
For the financial year that ended January 29, John Lewis posted revenue of £10.84 billion, up 0.6% from £10.77 billion. It narrowed its pretax loss to £26 million from £517 million.
Net exceptions costs were reduced to £161 million from £648 million.
Pretax profit before exceptional items and its partner bonus increased 38% to £181 million from £131 million.
The company noted the John Lewis department store chain alone registered record annual sales of £4.9 billion, up 4% annually.
The company also turned to cost cuts. It saved £170 million, John Lewis said, a ‘major factor behind our profit growth’.
‘This has involved difficult decisions that have affected Partners deeply: reducing management roles in our shops and reducing our central teams. We have also closed eight John Lewis stores and a delivery hub. These were necessary decisions to ensure the partnership is sustainable in the future,’ John Lewis added.
In addition to meeting its target for adjusted profit, John Lewis said its year-end debt ratio was 2.3 times, improved from 3.4x, paving the way for a partner bonus.
The total partner bonus was £46 million, the company said.
In the previous financial year, John Lewis did not pay its customary partnership bonus. Prior to that, the last time the bonus was axed was in 1948, when John Lewis was dealing with the fall out of World War Two. It didn't resume bonus payment again until 1954. In financial 2020, John Lewis paid out £31 million in partnership bonuses.
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