11th Nov 2015 07:16
LONDON (Alliance News) - J Sainsbury PLC on Wednesday said the grocery market in the UK remains challenging and posted lower sales for the first half, even as it swung to a pretax profit in the period.
The FTSE 100-listed grocer said its pretax profit for the 28 weeks to September 26 was GBP339.0 million, swung from a GBP290.0 million loss made a year earlier due to writedowns it had booked. Underlying pretax profit for the group fell 18% in the recent half to GBP308.0 million from GBP375.0 million a year before.
Sainsbury's will pay an interim dividend of 4.0 pence per share, down 20% from 5.0p a year earlier.
Total group sales, excluding VAT and fuel, fell 2.0% to GBP12.42 billion from GBP12.67 billion a year earlier, it said. Underlying sales, including VAT, fell 2.0% to GBP13.64 billion from GBP13.92 billion.
Retail sales for the group, including VAT but excluding fuel, were down 0.1% in the half, while like-for-like sales were down 1.6%.
Sainsbury's said the UK food market remains challenging and said its overall market share declined marginally in the first half to 16.5%, as it continued to face increased competition from discounters such as Aldi and Lidl.
The group is focused on its cost-savings plans and said it remains on track to take GBP500.0 million in annual costs out of the business over three years, with GBP225.0 million of that to be achieved in the current financial year.
"We are making good progress against the strategy we outlined last November. We are delivering volume and transaction growth as customers value our quality improvements and our clearer, simpler message of lower regular prices," said Mike Coupe, Sainsbury's chief executive.
"The grocery retail marketplace remains challenging but Sainsbury's is a great business, run by an experienced management team, supported by talented colleagues and strong values. I am confident we are making progress and we are looking forward to a successful Christmas, offering our customers fantastic products and great value," Coupe added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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