Sainsbury Net Profit More than Doubles

As a result of continued progress, the Board is recommending a full year dividend of 14.2 pence, an increase of 7.6 per cent over the previous year.

14 May 2010 --- UK retailer Sainsbury’s has reported that total sales (inc VAT, inc fuel) were up 5.1 per cent to £21,421 million (2008/09: £20,383 million). Total sales (inc VAT, ex fuel) were up 6.7 per cent, while like-for-like sales (inc VAT, ex fuel) were up 4.3 per cent.

David Tyler, Chairman, said: “The Board is pleased with the performance of Sainsbury’s over the last year. We have delivered sales growth ahead of the market and good profit growth with underlying earnings per share up over 12 per cent. Our progress in achieving our strategic objectives has been strong, particularly on growing space and developing our complementary non-food offer. At the same time, our values continue to underpin everything we do, with our focus on customer service and responsible trading. As a result of this continued progress, the Board is recommending a full year dividend of 14.2 pence, an increase of 7.6 per cent over the previous year. This dividend is covered 1.68 times by earnings in line with our policy for dividend cover of 1.50 to 1.75 times.”

Justin King, Chief Executive, said: "Sainsbury's has outperformed because we continue to lead on providing healthy, fresh and tasty food with universal appeal. Total sales, including VAT, excluding fuel, for the year were up 6.7 per cent and like-for-like sales were up 4.3 per cent. Like-for-like sales have grown cumulatively over five years by nearly 25 per cent. Customers recognise the progress we have made in ‘Making Sainsbury’s Great Again’ and we now serve on average over 19 million customers each week. That's one million more than last year and nearly five million more than five years ago.

"Colleagues have worked hard to deliver operational excellence resulting in better service and further productivity savings which have contributed to 17.5 per cent growth in underlying profit before tax, a good performance in difficult trading times. I am delighted therefore that 127,000 colleagues will share a bonus of over £80 million. Our success has also meant that we have been able to invest over £900 million in capital expenditure in the year. This has added 1.1 million sq ft to our store estate, opening or extending over 100 stores and creating over 6,500 new jobs with Sainsbury’s.

"Sainsbury’s is a growing business with a strong balance sheet, valuable property assets and an improving return on capital. Our strong operating cash flows support our plans to accelerate the investment programme, delivering further trading and property value for shareholders. Whilst we expect that the environment will remain challenging and consumer spending will be under pressure, we believe our strong space growth plans, supporting our expanding food, complementary non-food and convenience store businesses, alongside our continued focus on productivity, will enable the business to make further good progress.”