Sainsbury grows its half-year profits by a fifth

Nov 15 2007 by Peter McCusker, The Journal

SUPERMARKET giant Sainsbury’s yesterday said it had grown half-year profits by a fifth despite the “distraction” of its £10.6bn takeover saga.

The retail chain, which was the focus of a failed Qatari-backed takeover approach, banked interim pre-tax profits of £232m, marginally better than the £231m expected by analysts.

Sainsbury’s said 16.5 million shoppers now pass through its check-outs each week and confirmed it was ahead of its three-year recovery plan, with £2.4bn growth in sales since March 2005.

Sainsbury’s saw sales, excluding petrol, grow 4% on a like-for-like basis in the six months to October 6 despite “challenging” weather conditions.

The group cautioned over “tighter constraints on current consumer spending”, having seen sales growth slow in the second quarter.

But it said its strong Christmas offering should stand it in good stead for the festive season.

Sainsbury’s added that its upmarket product range, Taste the Difference, had seen its highest sales week outside the key Christmas and Easter periods amid a “taste festival” running throughout September and October. Its non-food offering is also enjoying further growth – at more than double the rate of food growth.The firm’s bosses stressed their confidence in the group under its Making Sainsbury’s Great Again turnaround strategy, having left investors disappointed with the second failed takeover this year.

Qatari investment fund Delta Two pulled its potential multi-billion pound offer earlier this month, less than a year after a private equity takeover attempt also fell by the wayside.