25th Apr 2024 09:15
(Alliance News) - J Sainsbury PLC on Thursday said annual profit fell as widening costs more than offset rising revenue, although it kept its dividend unchanged and emphasised the performance of its food business.
The London-based supermarket chain said revenue rose 3.8% to GBP32.70 billion in the financial year that ended March 2 from GBP35.16 billion in financial 2023.
Retail sales excluding fuel were up 6.8%, led by Grocery sales, up 9.4%. By contrast, General Merchandise sales down 0.5% including the impact of the closure of Argos in Ireland. Clothing sales were down 6.4%. Fuel sales were down 14%, due to lower prices.
The increase in revenue was offset by cost of sales rising 3.1% to GBP30.3 million from GBP29.4 million and administrative expenses rising 27% to GBP1.9 million from GBP1.5 million.
Pretax profit fell by 15% to GBP277 million from GBP327 million. Despite the falling bottom-line, Sainsbury's declared a final dividend of 9.2 pence, taking its full-year total dividend to an unchanged 13.1p compared to a year earlier.
It also said it will begin its previously announced GBP200 million share buyback programme on Friday. The scheme was revealed back in February and covers financial 2025.
Chief Executive Simon Roberts said: "We said we'd put food back at the heart of Sainsbury's and that's what we've done. Our food business is firing on all cylinders. We have the best combination of value and quality in the market and that's winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions."
Looking ahead, Sainsbury's said it expects to continue to outperform the grocery market and for volume advantage to "drive strong profit leverage in the year ahead".
It expects retail underlying operating profit of between GBP1.01 billion and GBP1.06 billion in its financial 2025, up 5% to 10%.
On Tuesday, data from research house Kantar showed sales at Sainsbury's climbed 5.9% in the 12-week period to April 14, while its market share nudged up by 0.4 percentage point to 15.3%, second only to Tesco PLC at 27.4%.
Shares in Sainsbury's were down 1.4% to 264.20p each in London on Thursday morning. The wider FTSE 100 index was up 0.6%.
By Greg Rosenvinge, Alliance News senior reporter
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