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 |
|
|---|---|---|---|
| 2008 | |||
| Segment revenue | |||
| Sales to external customers | 17,837 | - | 17,837 |
| Underlying operating profit1 | 535 | - | 535 |
| Profit on sale of properties | 7 | - | 7 |
| Costs relating to approach from Delta Two | (7) | - | (7) |
| Costs associated with Office of Fair Trading dairy inquiry | (27) | - | (27) |
| Fair value gain on other financial asset | 22 | - | 22 |
Segment result |
530 | - | 530 |
| Finance income | 83 | ||
| Finance costs | (132) | ||
| Share of post-tax profit/(loss) from joint ventures | 1 | (3) | (2) |
| Income tax expense | (150) | ||
| Profit for the financial year | 329 | ||
Assets |
9,967 | - | 9,967 |
| Investment in joint ventures | 59 | 89 | 148 |
| Segment assets | 10,115 | ||
| Segment liabilities | 5,180 | - | 5,180 |
Other segment items |
|||
| Capital expenditure | 1,006 | - | 1,006 |
| Depreciation expense | 463 | - | 463 |
| Amortisation expense | 18 | - | 18 |
| Reversal of impairment on receivables | (1) | - | (1) |
| Other non-cash expenses | |||
| Share-based payments | 53 | - | 53 |
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 |
| Other non-cash expenses | |||
| Share-based payments | 38 | – | 38 |
- Underlying profit before tax from continuing operations before finance income and finance costs and share of post-tax profit or loss from joint ventures.