Sainsbury’s has posted its preliminary results for the 52 weeks to 10 March in which its group like-for-like sales increased by 9% to £31.7bn, yet its statutory profit plummeted by almost £100m.
Statutory profit for the ‘Big Four’ grocer was £409m a significant decrease from the £503m the previous year.
Although Sainsbury’s underlying profit before tax saw a return to growth driven by an 11% increase in the second half of the year reaching £589m, up from £581m. The growth was attributed to “delivery of Argos synergies, efficiency savings across the group and improving food margin trends.”
Sainsbury’s also announced a proposed final dividend of 7.1 pence per share, an increase of 8%, bringing its full year dividend to 10.2 pence per share.
Following his controversial ITV interview about the company’s proposed merger with ASDA Mike Coupe, group chief executive of J Sainsbury, said: “We are focused on making Sainsbury’s a destination of choice. We are clearly differentiated by the quality of our food and we have recently invested a further £150m to lower prices.
“General merchandise and clothing are both performing ahead of the market and, in response to great customer feedback and financial returns, we are opening Argos stores in our supermarkets faster than we originally planned. We will also deliver £160m EBITDA synergies by March 2019, six months ahead of plan.
“We continue to find ways to simplify our business and reduce costs. We have exceeded our original three year £500m target and delivered a total of £540m in savings. In addition, we will deliver at least £500m of cost savings over the next three years to 2020/21. Net debt has reduced by £113m to £1,364m and we are targeting to reduce net debt by a further £100m in 2018/19. I am optimistic about the year ahead.”
In the update Sainsbury’s also announced that it expects profits for 2018/19 to be in line with current market consensus of £629m.