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Sainsbury profits up 60 per cent

15/11/2006

Supermarket giant J Sainsbury has announced a 60 per cent rise in half-year pre-tax profits, stressing that its recovery plan is "on track".

Publishing interim results today, the grocery retailer revealed that underlying profit before tax in the 28 weeks to October 7th 2006 was £189 million, up from £118 million a year earlier.

Sainsbury, whose advertising campaigns feature TV chef Jamie Oliver, said that a focus on providing "fresh and healthy food" had helped drive the growth.

The grocery chain revealed that total sales were up 8.3 per cent to £9.5 million, while like-for-like sales, excluding new stores and fuel, were up 6.2 per cent.

The company, which is 18 months into a three-year recovery plan, also revealed that it had delivered £1.3 billion of additional sales so far, more than half of its target of £2.5 billion by March 2008.

Commenting on the results, Sainsbury's chief executive, Justin King, said: "We have made good progress during the first six months of the year, reporting our seventh consecutive quarter of like-for-like sales growth, our best performance for many years."

Mr King added that the company, which has struggled to compete against rivals such as Tesco in recent years, had increased its market share over the period, with weekly customer transactions growing by 1.5 billion.

He also highlighted that a good performance by Sainsbury's online sales business had helped boost results, with internet sales up by 40 per cent year-on year during the first half.

Meanwhile, the Sainsbury chief added that the retailer's "focus on healthy, safe, fresh and tasty food" was "becoming increasingly important" to consumers.

Recent initiatives launched by the company include the 'wheel of health' - a traffic light-style system of nutritional labelling to help consumers identify healthy foods.

Mr King concluded: "We expect the market to remain highly competitive but our first-half performance gives us good momentum as customers continue to look for better quality products at competitive prices."

Sainsbury said that it would pay an interim dividend of 2.4 pence a share to its investors, up by 11.6 per cent on the previous year.

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