Sainsbury’s interim results highlight ‘good sales and profit growth’

Sainsbury’s has today released interim results for the 28 weeks to 1 October 2011. A summary of the highlights can be found below:

Overview:

- Total sales (inc VAT, inc fuel) up 7.6 per cent to £12,848 million (2010/11: £11,944 million)
- Total sales (inc VAT, ex fuel) up 4.3 per cent
- Like-for-like sales (inc VAT, ex fuel) up 1.9 per cent
- Underlying operating profit up 7.0 per cent to £396 million (2010/11: £370 million)
- Underlying profit before tax up 6.6 per cent to £354 million (2010/11: £332 million)
- Underlying basic earnings per share up 6.1 per cent to 13.9 pence (2010/11: 13.1 pence)
- Interim dividend of 4.5 pence per share up 4.7 per cent (2010/11: 4.3 pence)
- Revenue (ex VAT, inc fuel) up 6.1 per cent to £11,693 million (2010/11: £11,020 million)
- Profit before tax of £395 million, reflecting lower property profits (2010/11: £466 million)
- Basic earnings per share of 16.2 pence (2010/11: 18.7 pence)

Operating highlights:

- Good sales growth in a challenging environment
- Cost savings of £50 million broadly offset inflationary increases
- Weekly customer transactions up almost one million on last year, to nearly 22 million
- Successful launch of 'Live Well For Less' and 'Sainsbury's Brand Match'
- Over 2,700 jobs created and 15,000 seasonal jobs to be created at Christmas
- Capital programme continues to achieve a pre-tax internal rate of return of over 15 per cent
- Supermarket of the Year and Convenience Chain of the Year at the 2011 Retail Industry Awards

Five areas of focus:

* Food: Over 3,200 new and improved 'by Sainsbury's' products launched
* General merchandise and clothing: Continued good growth and launch of 'Gok for TU'
* Channels: Opened 400th convenience store; online growing by around 20 per cent; 'Click & Collect' now in over 700 stores
* New business: Share of Sainsbury's Bank post-tax operating profit at £7 million, up 16.7 per cent
* Property: 596,000 sq ft of gross new space; value of properties up £0.4 billion to £10.9 billion

David Tyler, Chairman, said: "We are pleased with our sales and profit performance, given the challenging economic environment. We have continued to make good progress against our five areas of focus, strengthening our position for the long-term, particularly the investment in our food and clothing ranges as well as new channels and services. Our interim dividend is 4.5 pence, which is in line with our policy to pay this at 30 per cent of the previous year's full-year dividend."

Justin King, Chief Executive, said: "Our further good sales growth reflects our continued hard work to help our customers cope with the tough economic environment. They are recognising the efforts we are making to help them manage their budgets and to 'Live Well For Less'. This is reflected in customer visits, with transactions up almost one million on last year, to nearly 22 million a week. We continue to apply a tight control on costs, achieving £50 million savings so far this year. Combined with our strong sales this has helped us to grow profits, with underlying operating profit up seven per cent.

"We were proud to announce our ambitious '20 by 20 Sustainability Plan' in October, to help our customers 'Live Well' and also to transform the way we do business. We also recently launched 'Sainsbury's Brand Match' which has helped bring 'Live Well for Less' to life. We are delighted with the response from customers.

"We expect the economic environment to remain challenging for the foreseeable future but we are confident of further good progress in the Christmas period ahead and our ability to grow by continuing to do a great job in helping our customers 'Live Well For Less'."

Source : J Sainsbury Plc corporate website
www.j-sainsbury.co.uk/media/latest-stories/2011/20111109-interim-results-for-the-28-weeks-to-1-october-2011/