Financial Review
Cash flow statement
Group net debt as at 24 March 2007 was £1,380 million (2006: £1,415 million). Adjusting for the impact of Sainsbury’s Bank, which was consolidated in the prior year, net debt reduced by £156 million (2006: ex Sainsbury’s Bank £1,536 million).
Within the overall cash flow movement for the year there were a number of significant one-off items. The significant cash outflows related to a £240 million one-off pension contribution made in May 2006 and £90 million paid out in relation to one-off costs charged to the income statement in the prior year. These were offset by significant cash inflows relating to £93 million received in respect of property disposals and the sale of five per cent shareholding of Sainsbury’s Bank, £81 million proceeds from issue of shares and around £150 million relating to yearend timing differences on working capital which are expected to reverse in the next financial year. After adjusting for these items, underlying cash flow for the year was £162 million favourable. In the next financial year the Group expects to deliver an underlying cash flow neutral position after adjusting for the reversal of the £150 million working capital timing differences.
| Summary cash flow statement for the 52 weeks to 24 March 2007 |
2007 £m |
2006 £m |
|---|---|---|
| Cash generated from operations1 | 830 | 780 |
| Net interest | (83) | (156) |
| Corporation tax received | 9 | 3 |
| Cash flow before appropriations | 756 | 627 |
| Purchase of non-current assets | (788) | (561) |
| Disposal of non-current assets/operations | 93 | 151 |
| Proceeds from issue of shares | 81 | 22 |
| Capital redemption | (2) | (9) |
| (Repayment of)/proceeds from borrowings | (75) | 65 |
| Debt restructuring costs | (2) | (22) |
| Dividends paid | (140) | (131) |
| Net (decrease)/increase in cash and cash equivalents | (77) | 142 |
| Decrease/(increase) in debt | 79 | (65) |
| IAS 32 and IAS 39 adjustments | – | (51) |
| Other non-cash movements | 33 | – |
| Movement in net debt | 35 | 26 |
| Opening net debt | (1,415) | (1,441) |
| Closing net debt | (1,380) | (1,415) |
| Of which: | ||
| Retailing | (1,380) | (1,536) |
| Financial services | – | 121 |
| Closing net debt | (1,380) | (1,415) |