Summary balance sheet

Shareholders’ funds as at 17 March 2012 were £5,629 million (19 March 2011: £5,424 million), an increase of £205 million. This is mainly attributable to the continued profitable growth of the underlying business, continued investment in space to support future growth, offset by an increase in the net retirement benefit obligations and net debt.

Property, plant and equipment assets have increased by £545 million, as a result of increased space growth.

Net debt is £166 million higher than at 19 March 2011 due to an investment in property, plant and equipment, with additional debt partly offset by slightly higher cash balances at year-end as a result of improved working capital management.

Gearing increased year-on-year to 35.2 per cent (2010/11: 33.4 per cent), as a result of the higher net debt. Our interest cover moved to 7.5 times (2010/11: 7.9 times), while fixed charge cover was in line with last year at 3.1 times (2010/11: 3.1 times), as was adjusted net debt to EBITDAR at 4.1 times (2010/11: 4.1 times).

Summary balance sheet
at 17 March 2012
 2012
£m
 2011
£m
 Movement
£m
Land and buildings (freehold and long leasehold) 6,802  6,440 362
Land and buildings (short leasehold) 648  622 26
Fixtures and fittings 1,879  1,722 157
Property, plant and equipment 9,329 8,784 545
Other non-current assets 911 842 69
Inventories 938 812 126
Trade and other receivables 286 303 (17)
Cash and cash equivalents 739 501 238
Debt  (2,719) (2,315) (404)
Net debt  (1,980) (1,814) (166)
Trade and other payables and provisions (3,400) (3,262) (138)
Retirement benefit obligations, net of deferred tax (455) (241) (214)
Net assets 5,629 5,424 205
       
Key financial ratios      
Adjusted net debt to EBITDAR1 4.1 times 4.1 times  
Interest cover2 7.5 times 7.9 times  
Fixed charge cover3 3.1 times 3.1 times  
Gearing4 35.2% 33.4%  
  1. Net debt plus capitalised lease obligations (5.5% NPV) divided by EBITDAR.
  2. Underlying profit before interest and tax divided by underlying net finance costs.
  3. EBITDAR divided by net rent and underlying net finance costs.
  4. Net debt divided by net assets.

As at 17 March 2012, Sainsbury’s estimated market value of properties rose by £0.7 billion to £11.2 billion (19 March 2011: £10.5 billion), driven by property value added of £1.0 billion, partly offset by sale and leasebacks of £0.3 billion. The property value is based on a yield of 4.9 per cent and includes a 50 per cent share of properties held within its property joint ventures.

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