- Underlying pretax profit of 42 mln stg
- To step-up investment to 542 mln stg
- No staff bonus
- No longer has target for scale of broader business
LONDON, March 14 (Reuters) - Britain's John Lewis Partnership on Thursday reported a return to annual profit due to improved trading in its food business and cost savings, and forecast further improvement this year.
The employee-owned retailer, which runs John Lewis department stores and the Waitrose supermarket chain, said it would step up investment in 2024-25 to 542 million pounds ($694 million) from 312 million pounds in 2023-24.
It will also spend 116 million pounds on higher pay for its 76,000 staff, known as partners, who received no bonus for a second straight year for 2023-24.
Chairman Sharon White, who is stepping down in 2025 having decided not to seek a second term of office, warned in September that her turnaround plan would take two years longer than originally forecast due to inflationary pressures and greater than expected investment requirements.
The partnership made a profit before tax and exceptional items of 42 million pounds in the year to Jan. 27 2024, versus a loss of 78 million pounds in the previous year.
Total sales rose 1% to 12.4 billion pounds, as one million more customers shopped with the group. Waitrose sales were up 5% to 7.7 billion pounds but department store sales fell 4% to 4.8 billion pounds.
Productivity improvements were 111 million pounds, the partnership said.
"In 2023/24, our focus has been on returning to profitability through improved trading and productivity, while boosting our customer offer. This has been achieved," it added.
"We expect profits to grow further this year," said White.
Investment this year will focus on modernising technology, opening new Waitrose stores, refreshing existing stores and "simplifying how we work".
The partnership has said its plan to become more efficient will mean job cuts. It has not, however, given a figure.
In January, the Guardian reported it could cut up to 11,000 over five years.
White's original plan was for 40% of the partnership's profit to be generated from outside retail, such as financial services and building rental homes, by 2030.
It said on Thursday its refreshed plan does not set a specific target for the scale of its broader business.
($1 = 0.7817 pounds)
Reporting by James Davey; Editing by Kate Holton and Alexander Smith
Source: Reuters