Mike Coupe, Chief Executive of Sainsbury's, said: "We are making good progress against the strategy we outlined to shareholders in November 2014. We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment. We deliver great quality products and services at fair prices, whenever and wherever customers want to shop - and with volumes and transactions up, it is clear customers are responding positively to our offer. Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices. We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels. These results reflect the multi-product, multi-channel shopping experience customers are looking for today and our proposed acquisition of Home Retail Group plc will accelerate our strategy in this direction.
"We continue to manage our costs and capital expenditure carefully and, after making operating cost savings of £225 million this year, we are on track to deliver our three-year £500 million cost saving programme by the end of 2017/18. Ongoing pricing pressures and food price deflation have impacted our sales and operating margins. As a result, underlying profit and earnings per share are down this year versus last year.
"The market is competitive, and it will remain so for the foreseeable future. We believe we have the right strategy in place and are taking the right decisions to achieve our vision to be the most trusted retailer where people love to work and shop."
|
|
2015/16 |
2014/15 |
% Total Change |
|
Business Performance |
|||
|
Underlying Group sales (inc VAT)(1) |
£25,829m |
£26,122m |
(1.1)% |
|
Retail sales (inc VAT, ex fuel) |
|
|
0.4% |
|
Like-for-Like sales (inc VAT, ex fuel) |
|
|
(0.9)% |
|
Underlying profit before tax(2) |
£587m |
£681m |
(13.8)% |
|
Underlying basic earnings per share(3) |
24.2p |
26.4p |
(8.3)% |
|
Return on capital employed(4) |
8.8% |
9.7% |
(88)bps |
|
Statutory Reporting* |
|||
|
Group sales (ex VAT, inc fuel) |
£23,506m |
£23,775m |
|
|
Items excluded from underlying results |
£(39)m |
£(753)m |
|
|
Profit/(loss) before tax |
£548m |
£(72)m |
|
|
Basic earnings/(loss) per share |
23.9p |
(8.7)p |
|
|
Proposed final dividend |
8.1p |
8.2p |
(1.2)% |
|
Proposed full year dividend |
12.1p |
13.2p |
(8.3)% |
|
Return on capital employed excluding net retirement benefit obligations |
8.3% |
9.0% |
|
*Variation between Business Performance and Statutory Reporting is due to items excluded from underlying results
David Tyler, Chairman of Sainsbury's, added: "Our strategy is built on the fundamental strengths of our business - great heritage, quality food, fair prices and strong values. It recognises that customers will increasingly shop through multiple channels and according to their varying needs. Our business will continue to evolve and adapt to changing shopping needs, ensuring that we exceed customer expectations in an increasingly fast-paced, digital world.
"We are focused on building shareholder value and are confident that by following our established strategy, driving efficiencies and managing costs carefully, we will achieve this. We are committed to paying an affordable dividend to our shareholders and have maintained this at 2.0 times cover. We are therefore recommending a final dividend of 8.1 pence per share this year, making the proposed full year dividend 12.1 pence per share."
