• Business review
  • Chairman's statement
  • Corporate objectives
  • Key Financial Performance Indicators
  • Key Progress and Achievements
  • Operating review
  • Our goal
  • Corporate responsibility review
  • Financial review
  • Principal risks and uncertainties
• Board of Directors
• Operating Board
• Governance
  • Directors' report
  • Statement of corporate governance
  • Remuneration report
  • Statement of Directors' responsiblities
• Financial statements
  • Independent Auditors’ report to the members of J Sainsbury plc
  • Group income statement
  • Statements of recognised income and expense
  • Balance sheets
  • Cash flow statements
  • Notes to the financial statements
  • Five year financial record
• Additional shareholder information
• Financial calendar

This was partially offset by improved operational cash flows and disposals of £393 million.

Sainsbury’s expects year-end net debt to increase to between £(1.7) billion and £(1.8) billion in 2010, following broadly the same profile as in 2009 with cash outflows weighted towards the first half.

Financing

Sainsbury’s seeks to manage its financing by diversifying funding sources, configuring core borrowings with long-term maturities and maintaining sufficient stand-by liquidity.

Sainsbury’s core funding is represented by two long-term loans entered into in March 2006 and secured over a portion of its property assets. The amortising loans comprise £1,130 million due 2018 and £872 million due 2031. During the year Sainsbury’s also entered into a new £150 million bilateral bank loan maturing in May 2015. Short-term funding is maintained through two committed revolving credit facilities: £400 million due February 2012 and £163 million due May 2011. At 21 March 2009, there was no outstanding balance under these facilities (2008: £nil).

Since the year-end Sainsbury’s has renewed its £35 million loan, due May 2009, at a level of
£50 million and extended its term to May 2012. Additionally, it has put in place a new £50 million credit facility, maturing May 2012.

Capital expenditure

Core capital expenditure amounted to £863 million (2008: £850 million) in the full year, which included £386 million on new store development (2008: £308 million) and £385 million on extensions and refurbishments (2008: £424 million). During the year, a number of freehold properties of existing trading stores were acquired, in line with Sainsbury’s plans to buy freeholds of trading sites where it believes there are potential long-term development opportunities. This expenditure totalled £392 million (2008: £168 million), including £274 million on the British Land JV. This expenditure has been offset by proceeds of £393 million in relation to property disposals (2008: £219 million).

On 4 March 2009, Sainsbury’s announced the acquisition of 24 stores from the Co-operative Group. The financial impact of this acquisition is not reflected in the financial statements. Completion on these stores, of which only one store is awaiting OFT approval, commenced in May 2009.

Sainsbury’s expects capital expenditure for 2010 of between £800 million and £900 million. This will bring its three-year expenditure to £2.5 billion, in line with the guidance provided in May 2007.

Capital expenditure for the 52 weeks to 21 March 2009	2009 £m	2008 £m
New store development	386	308
Extensions and refurbishments	385	424
Other – including supply chain and IT	92	118
Core retail capital expenditure	863	850
British Land JV investment	274	–
Acquisition of freehold properties	118	168
Proceeds from property transactions	(393)	(219)
Net capital expenditure	862	799

Working capital

Sainsbury’s has continued to manage working capital carefully and cash generated from operations includes a year-on-year improvement in working capital of £167 million. This has been achieved through improved management of trade cash flows, supported by the growth of Sainsbury’s supply chain financing platform, whilst reducing stock days.

Summary balance sheet

Shareholders’ funds as at 21 March 2009 were £4,376 million (2008: £4,935 million), a reduction of £559 million, primarily as a result of the deterioration of the pension surplus into a deficit, which reduces net assets by £588 million. Gearing, which measures net debt as a percentage of total equity, increased to 38 per cent (2008: 30 per cent) as a result of the pension surplus moving into deficit.

Summary balance sheet 2009 at 21 March 2009	2009 £m	2008 £m
Non-current assets	8,425	8,010
Inventories	689	681
Trade and other receivables	195	206
Cash and cash equivalents	627	719
Debt	(2,298)	(2,222)
Net debt	(1,671)	(1,503)
Trade and other payables and provisions	(3,040)	(2,825)
Retirement benefit (obligations)/assets, net of deferred tax	(222)	366
Net assets	4,376	4,935