2018/19 Financial Statements restated for IFRS 16

16 October 2019

J Sainsbury plc

 2018/19 Financial Statements - restated for IFRS 16

As previously announced, J Sainsbury plc is adopting the fully retrospective approach to the new IFRS 16 lease standard, effective for the Group for the 52 weeks ending 7 March 2020.

IFRS 16 will have no economic effect on the business or cash. It does however impact the way assets, liabilities and the income statement are presented.

Our first Financial Statements to be prepared under IFRS 16 will be Interims 2019/20, to be reported on 7 November 2019. Ahead of those results, we are today publishing first half and full year restated 2018/19 results on a post-IFRS 16 basis.

·     In line with prior guidance, restated underlying profit before tax for 2018/19 reduces by £34 million and statutory profit before tax reduces by £37 million. Underlying profit before tax therefore reduces from £635 million to £601 million, and statutory profit before tax reduces from £239 million to £202 million

·     This restatement comprises £747 million reduction in rent, £(470) million increase in depreciation, £(323) million increase in underlying net finance costs and £12 million reduction in other costs

·     The financial impact on the restated 2018/19 balance sheet includes the recognition of right-of-use assets of £4,993 million, recognition of IFRS 16 lease liabilities of £(5,822) million and recognition of deferred tax assets of £162 million. 2018/19 restated net assets reduce by £(673) million and retail net debt increases from £(1,142) million to £(6,844) million

·     2018/19 Net debt to EBITDAR of 3.1 times compares to previously reported adjusted Net debt to EBITDAR of 3.2 times

See below for 2018/19 full year and half year restated Financial Statements. See https://www.about.sainsburys.co.uk/investors/results-reports-and-presentations for a more detailed disclosure on the impact of IFRS 16.

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These condensed consolidated financial statements for the 52 weeks ended 9 March 2019 do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the 52 weeks ended 9 March 2019 (as reported) have been filed with the Registrar of Companies following their approval at the AGM. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.