Wednesday, 13 November 2013

Sainsbury - Interim Results

Sainsbury have today announced half-year results for the 6m to end September 2013. Sales and profits continue to impress and have been boosted by growth in own-brand food which is moving ahead at twice the rate of branded goods, and even faster growth in their range of non-food goods such as general merchandise and clothing.

Profit before tax is up 9.1% to £433m (2012/13: £397m) whilst basic earnings per share is up 8.5% to 17.9p (2012/13: 16.5p) aided by a reduced corporation tax levy.

The Board has proposed an interim dividend of 5.0p (2012/13: 4.8p), up 4.2% year-on-year. This is in line with their policy of paying 30% of the prior year's full-year dividend as an interim dividend.

In addition, online grocery sales have increased some 15% with annualised sales now exceeding £1bn. Online customer total spend is more than double the average supermarket-only shopper

Commenting on these results CEO Justin King, said,
"Our share of the grocery market is the highest for a decade at 16.8 per cent following 35 consecutive quarters of like-for-like sales growth. We are helping customers Live Well for Less through high-quality, affordable own-brand products, Brand Match, Nectar and targeted coupon-at-till promotions.

"Whilst customers' budgets remain tight and any recovery in the economy may take time to take effect, our consistent strategy and strong values-driven culture mean we are well placed to continue to deliver for customers, colleagues and shareholders."

On the new business front, they recently launched a new mobile phone network - Mobile by Sainsbury's - a joint venture with Vodafone, offering high-quality, value-for-money mobile phone tariffs and handsets. SIM cards are now available in all stores, with 300 stores also offering a range of handsets.

The results have been well received by the market and in morning trading the share price was up 4% at 415p. I have a figure of 17.6p pencilled in for the full-year dividend which would give a forward yield of 4.2%.

More on this one following the Christmas trading update in early January, but happy to continue holding.

As always, please DYOR.

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