Sainsbury's profit impacted by failed proposed merger with Asda
Sainsbury’s has seen its full year underlying pre-tax profit increase by 7.8% to £635 million although statutory pre-tax profit was hit by charges relating to its failed proposed merger with Asda.
The retailer attributed the uplift to a “solid” food performance, delivery of £160 million Argos synergies nine months ahead of schedule, and reduced interest costs.
However, the 52 week period to 9 March saw statutory pre-tax profit decline to £219 million from £309 million in the previous year as the retailer was hit by charges relating to legislation on guaranteed minimum pensions, retail restructuring, the integration of Argos and costs relating to the retailer’s proposed Asda merger.
Retail underlying operating profit was up 10.7% to £692 million in the period although like-for-like sales in the fourth quarter edged down 0.9%.
Sainsbury’s said it experienced growth across all of its channels in the year. Sales at its convenience stores and online grocery sales grew by 3.7% and 6.9% respectively. Meanwhile, supermarket sales edged up 1% as the retailer benefited from the addition of Argos stores inside supermarkets.
During the period, Sainsbury’s reorganised its store operations and completed the integration of Argos.
Looking ahead, Mike Coupe, group chief executive of J Sainsbury, said: " “We will increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year. £4.7 billion of our revenue now comes from our online businesses and we are increasing investment in technology to make shopping across Sainsbury's, Argos and Sainsbury's Bank as quick and convenient as possible. We will also continue to strengthen our balance sheet and are making a new commitment to reduce net debt by at least £600 million over the next three years.”
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