Our strategy

Delivering results

We believe our strategy has delivered, and will continue to deliver, strongly improved profit margins for our shareholders, whilst positioning the Group for long term growth.

Financial objectives

Sales growth that
exceeds that of
the market

Earnings that meet
the expectations of
shareholders

Commentary

Sales growth, particularly organic growth, is key to retail success and long term expansion. We aim to grow grocery like-for-like sales faster than market growth.

Sales growth needs to be converted into profitable growth. We aim to strongly improve profit margins whilst positioning for long term growth.

Measures of success

Like-for-like sales growth in excess of the market (%)

  2007 2008 2009
Like-for-like sales growth (ex-fuel) 5.2 4.6 7.9
Market growth rate 4.0 3.5 5.6
Like-for-like sales growth in excess of the market 1.2 1.1 2.3

Underlying basic earnings per
share (pence)

Underlying basic earnings per share chart

Like-for-like sales growth in excess of the market (%)

Like for like sales growth chart

Source: Nielsen like-for-like sales growth for 52 weeks to our year end.

Total dividend (pence per share)

Total dividend chart

Balance sheet strategy

The Group is securely financed and has a strong balance sheet. Our balance sheet strategy is based on the following principles:

Principle

Commentary

Maintain operational control of our retail stores.

95% of our estate is freehold.
 

Planned investments funded through existing facilities.

We are confident that our planned Optimisation Plan investments for the next two years can be met from existing financing facilities.
 

Maintain strong investment grade balance sheet.

Our credit rating improved to Baa1 in March 2008 and we received a further upgrade in March 2009 to A3. We are one of only three European retailers to have this rating, which is the highest in this sector.
 

Sustain funded pension schemes on IAS 19 basis.

We continue to take actions to ensure that the schemes are adequately funded for the long term.

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