Notes to the financial statements
3 Segment reporting
The Group’s primary reporting format is business segments, with each segment representing a business unit that offers different products and serves different markets.
The businesses are organised into two operating divisions:
- Retailing (Supermarkets and Convenience); and
- Financial services (Sainsbury’s Bank).
All material operations are carried out in the UK.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
| Retailing
£m |
Financial services £m |
Group £m |
|
|---|---|---|---|
| 2007 | |||
| Segment revenue | |||
| Sales to external customers | 16,860 | — | 16,860 |
| Services to external customers | — | 291 | 291 |
| Total revenue | 16,860 | 291 | 17,151 |
| Underlying operating profit1 | 429 | 2 | 431 |
| Profit on sale of properties | 7 | — | 7 |
| Profit on part disposal of Sainsbury’s Bank | — | 10 | 10 |
| Past service gains on defined benefit schemes | 72 | — | 72 |
| Segment result | 508 | 12 | 520 |
| Finance income | 64 | ||
| Finance costs | (107) | ||
| Income tax expense | (153) | ||
| Profit for the financial year | 324 | ||
| Assets | 9,478 | — | 9,478 |
| Investment in joint ventures | 10 | 88 | 98 |
| Segment assets | 9,576 | ||
| Segment liabilities | 5,227 | — | 5,227 |
| Other segment items | |||
| Capital expenditure | 733 | 4 | 737 |
| Depreciation expense | 469 | 10 | 479 |
| Amortisation expense | 19 | 2 | 21 |
| Impairment of amounts due from Sainsbury’s Bank customers | — | 89 | 89 |
| 2006 | |||
| Segment revenue | |||
| Sales to external customers | 15,731 | — | 15,731 |
| Services to external customers | — | 330 | 330 |
| Total revenue | 15,731 | 330 | 16,061 |
| Underlying operating profit/(loss)1 | 352 | (10) | 342 |
| Profit on sale of properties | 1 | — | 1 |
| Business Review operating costs | (51) | — | (51) |
| IT insourcing costs | (63) | — | (63) |
| Segment result | 239 | (10) | 229 |
| Finance income | 30 | ||
| Finance costs | (155) | ||
| Income tax expense | (46) | ||
| Profit for the financial year | 58 | ||
| Assets | 9,058 | 3,679 | 12,737 |
| Investment in joint ventures | 10 | — | 10 |
| Segment assets | 12,747 | ||
| Segment liabilities | 5,281 | 3,501 | 8,782 |
| Other segment items | |||
| Capital expenditure | 518 | 7 | 525 |
| Depreciation expense | 442 | 7 | 449 |
| Amortisation expense | 19 | 2 | 21 |
| Impairment of amounts due from Sainsbury’s Bank customers | — | 106 | 106 |