Interim Results

JOHN LEWIS OF HUNGERFORD PLC INTERIM STATEMENT FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002 HIGHLIGHTS • Revenues increased 12% to £1,512,000 (2001 - £1,350,000). • Loss on ordinary activities before and after taxation £143,000 (2001 - £42,000). • Net cash outflows from operating activities £126,000 (2001 - £133,000 inflows). • Unit sales growth over last year same period: Kitchens +14%: Furniture -23%. • One new showroom opened. CHAIRMANS STATEMENT Review of Operations The last six months trading results have been disappointing. Following strong first quarter sales performance, driven by a highly successful promotion in conjunction with Sainsburys plc, second quarter sales slowed significantly. In addition results for the first half have been adversely affected by the carrying costs of delays in completing the Company's new store in Muswell Hill, London that did not open until mid February 2002. Furniture sales have declined sharply in the period against last year as a result of changes in the focus of promotions. Furniture is generally more complicated to manufacture and requires a high input of skilled labour. Kitchen manufacture, by contrast, requires less skilled labour and enables the Company to leverage its recent investment in new manufacturing equipment. As previously reported the Company has had challenges with recruitment and retention of quality sales and design staff. Whilst by the beginning of the financial year, most designer vacancies had been filled, it takes time for new staff to become fully trained and effective. Generally the Company has a good history with staff retention, but over the last year or so sales performance has suffered through a combination of new openings and staff leaving for reasons unconnected with the Company. One full time designer supported by an assistant staffs many of the Company's sales outlets and the absence of the designer, even for a short period, has a significant negative impact on sales. Currently the Company is experiencing increased stability in its sales staffing which together with increased investment in training, should produce an improved sales performance. The Company currently has to make changes in two of its sales locations. In London we are disappointed to be losing our concession at Jerry's Home Store in the Fulham Road, which only opened at the beginning of 2001. This is due to the closure of the host store. The concession has performed well for us since its relocation from Liberty in Regent Street, London but will close at the end of May 2002. To replace our London flagship presence, the Company has agreed terms (subject to contract) for a high profile site in the Fulham Road comprising some 2,500 sq. ft. This will be a Company leased showroom giving the Company the space and profile to build on the sales potential we have seen at Jerry's. In Bristol the Company will be closing its concession at Debenhams of Bristol towards the end of June 2002 due to refitting of the host store. To replace this outlet, the Company has agreed (subject to contract) to lease a 600 sq. ft. showroom in the Clifton area of Bristol. We feel that both these new locations will give the Company opportunities to build on its established business in these geographic areas. Summary of Financial Results Turnover for the period was £1,512,000 against £1,350,000 in the comparable period last year. Losses before and after tax were £143,000 (2001 - £42,000). Capital expenditures in the period were £101,000 (2001 - £210,000) representing in the main fitting out costs at the new showroom in Muswell Hill, London. The Company has in place overdraft facilities amounting to £400,000. Outlook for the Future As described above the Company has experienced a significant general slowdown in sales in recent months. In addition it is likely that during the change over period of the London and Bristol sales outlets, sales will reduce. These two factors combined are likely to negatively affect the results for the full year to 31 August 2002. Notwithstanding the above your Board believes that the Company remains well positioned to grow sales and profits in future years. John Lewis Chairman 15 May 2002 PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 28 February 28 February 31 August 2002 2001 2001 £000 £000 £000 1,512 1,350 3,042 Turnover Cost of sales (626) (641) (1,296) -------- -------- -------- 886 709 1,746 Gross profit Distribution costs (274) (155) (508) Administration costs (755) (597) (1,117) ------- ------- --------- (143) (43) 121 Operating (loss)/profit Interest receivable 1 1 2 Interest payable (1) - (1) -------- -------- -------- (Loss)/profit on ordinary activities (143) (42) 122 before taxation Taxation - - (38) ------- -------- -------- (Loss)/profit on ordinary activities (143) (42) 84 after taxation Dividends - - (55) ------- ------- ------- (143) (42) 29 Retained (loss)/profit ==== ==== ==== Earnings/(loss) per share (0.10)p (0.03)p 0.06p ==== ==== ==== BALANCE SHEET AS AT 28 FEBRUARY 2002 Unaudited Unaudited Audited 28 February 2002 28 February 2001 31 August 2001 £000 £000 £000 £000 £000 £000 Fixed assets Intangible assets 30 33 32 Tangible assets 2,006 1,873 1,979 ------- ------- -------- 2,036 1,906 2,011 Current assets Stocks 298 176 224 Debtors 169 106 66 Cash at bank and in hand 77 95 85 ------- ------- -------- 544 377 375 Creditors: amounts falling due within (1,159) (826) (822) one year ------- ------- ------- Net current (615) (449) (447) liabilities ------- ------- ------- Total assets less 1,421 1,457 1,564 current liabilities Provisions for liabilities and (36) - (36) charges ------- ------- -------- 1,385 1,457 1,528 Total net assets ===== ===== ===== Capital and Reserves Called up share 149 149 149 capital Other reserves 1 1 1 Share premium account 825 825 825 Profit and Loss account 410 482 553 ------ ------- ------- Shareholders funds - all equity interests 1,385 1,457 1,528 ==== ==== ==== CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 28 FEBRUARY 2002 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 28 February 28 February 31 August 2002 2001 2001 £000 £000 £000 Operating (loss)/profit (143) (43) 121 Depreciation 72 44 110 Loss/(profit) on disposal of tangible fixed assets 4 (1) (1) (Increase)/decrease in Stock (74) 20 (27) (Increase)/decrease in Debtors (103) (38) 1 Increase in Creditors 118 151 143 ------- ------- ------- Net cash (outflow)/inflow (126) 133 347 from operating activities Returns on investments and - 1 1 servicing of finance - - (2) Corporation tax (101) (210) (380) Capital expenditure (17) (18) (50) Equity dividends paid ------- ------- ------- (244) (94) (84) Decrease in cash ==== ==== ==== Notes: 1. The interim accounts, which are unaudited, have been prepared under the historical cost convention using the accounting policies set out in the accounts for the year ended 31 August 2001. 2. The loss per share is calculated on the loss of £143,000 after taxation and on the basis of 148,745,519 shares in issue. The loss per share for the 6 months ended 28 February 2001 is calculated on the loss after taxation of £42,000 and on the basis of 148,745,519 shares in issue. The earnings per share for the year ended 31 August 2001 is calculated on the profit after taxation of £84,000 and on the basis of 148,745,519 shares in issue. 3. Copies of the 2002 interim accounts will be available to shareholders on the Company's website, www.john-lewis.co.uk, in due course. 4. Copies of this announcement will be available from the Nominated Adviser: Smith & Williamson Corporate Finance, No 1 Riding House Street, London, W1A 3AS for one month from the date of this announcement. -ends-

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John Lewis of Hungerford (JLH)
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