Preliminary results for the 52 weeks to 17 March 2012
Good sales and profit performance; outperforming the market
Financial summary
· Total sales (inc VAT) up 6.8 per cent to £24,511 million (2010/11: £22,943 million)
· Total sales (inc VAT, ex fuel) up 4.5 per cent, like-for-like sales (inc VAT, ex fuel) up 2.1 per cent
· Underlying profit before tax up 7.1 per cent to £712 million (2010/11: £665 million)
· Underlying basic earnings per share up 6.0 per cent to 28.1 pence (2010/11: 26.5 pence)
· Return on capital employed of 11.1 per cent (2010/11: 11.1 per cent)
· Proposed full year dividend of 16.1 pence, up 6.6 per cent, cover 1.75x (2010/11: 15.1 pence, cover 1.75x)
Statutory
· Revenue (ex VAT, inc fuel) up 5.6 per cent to £22,294 million (2010/11: £21,102 million)
· Profit before tax down 3.4 per cent to £799 million (2010/11: £827 million)
· Basic earnings per share down 7.0 per cent to 32.0 pence (2010/11: 34.4 pence)
Operating highlights
· Outperformed the market, increasing market share to 16.6 per cent, the highest for nearly a decade
· Price perception on branded groceries improving, driven by Brand Match
· New contract signed with Nectar, a key source of customer insight and loyalty
· Delivered over £100 million of operational cost savings
· Improved underlying operating margin by 4 bps (10 bps at constant fuel prices)
· Sector leader in FTSE4Good Index; top sector scorer across all dimensions
· Supermarket of the Yearand Convenience Chain of the Year at the 2011 Retail Industry Awards
Strategy highlights
· Great food: Good growth in our own label ranges, with Taste the Difference up 8.2 per cent and basics up 6.8 per cent. Over half way through re-launch of our core by Sainsbury's range with 3,700 products new or improved
· Compelling general merchandise and clothing: Continues to grow faster than our food business, gaining market share
· Complementary channels and services: £1.3 billion convenience business growing total and like-for-like sales well ahead of the market. Fastest-growing online food retailer with 20 per cent growth, now a £0.8 billion business. Click & Collect in over 900 stores with around 50 per cent of general merchandise orders now through this channel
· Developing new business: Sainsbury's Bank enjoyed another successful year with a 40 per cent increase in pre-tax operating profit
· Growing space and creating property value: Opened a further 1.4 million sq ft of gross space, adding 19 new supermarkets, 73 convenience stores and 28 store extensions. Property now valued at £11.2 billion
David Tyler, Chairman, said: "Sainsbury's has continued to deliver good sales and profit performance, and to increase its share of the market. At the same time we have grown underlying earnings per share by 6.0 per cent to 28.1 pence. As a result the Board is recommending a full year dividend of 16.1 pence, an increase of 6.6 per cent, covered 1.75 times by underlying earnings. The Board plans to increase the dividend each year and now intends to build cover to two times over the medium term."
Justin King, Chief Executive said: "We are succeeding by understanding what our customers want, supporting and inspiring them to Live Well For Less. Delivering quality and value is a compelling offer, in tune with what today's savvy shoppers want. Brand Match, combined with our use of coupon-at-till, has improved Sainsbury's price perception whilst retaining the benefits of our heritage in quality and service. We have continued to invest in the future of the business, including opening a further 1.4 million sq ft of gross space, whilst managing costs and increasing net underlying margins.
Whilst the wider economic situation remains uncertain, we remain confident that our clear strategy, market insight and strong values will enable us to make further progress both in our core food and non-food businesses, as well as new channels and services in the year ahead."
