123% profit for UK multiple – Fishupdate.com

123% profit for UK multiple Published:  15 November, 2006

Philip Hampton and Justin King

SUPERMARKET Sainsbury’s has posted a 123% rise in half-year profits.

Commenting on the announcement, Philip Hampton, Chairman, said: “We are now halfway through our three year plan and the recovery is on track. This has been a strong first half performance for Sainsbury’s with underlying profit before tax up 60.2 per cent at £189 million. The Board have approved an interim dividend of 2.40 pence per share, an increase of 11.6 per cent on last half year. This represents 30 per cent of last year’s total dividend. In future years we expect to maintain the approach of 30 per cent of the previous year’s total dividend for the first half.”

Justin King, Chief Executive, 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. Total sales (inc VAT) for the first half increased by 8.3 per cent and like-for-like sales growth (4) was 6.2 per cent. A strong performance on food together with good performances from online and non-food have driven higher sales densities which are up 5.6 per cent. At the same time we have realised cost savings, delivered operational gearing and increased the retailing operating margin by 37 basis points.

“We have now delivered £1.3 billion of additional sales after 18 months, which is just over halfway towards our target to grow sales by £2.5 billion (1) by March 2008. Over the same period, our market share has increased with weekly customer transactions growing 1.5 million as we have introduced better quality products, lowered prices, and improved product availability and customer service.

“Looking forward, we face tougher sales comparatives of over five per cent which were achieved in quarters three and four of 2005/06. We believe that our focus on healthy, safe, fresh and tasty food is becoming increasingly important for customers. 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.”

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