UK retailer Sainsbury, which earlier this week proposed a £15 billion merger with rival Asda, has failed to woo investors with full-year profits.
Underlying profit before tax, a measure that excludes distorting factors such as exchange-rate movements, was 1.4 per cent higher at £589 million, after £581 million in the previous year.
Group sales were nine per cent higher at £31.7 billion, against £29 billion the previous year, and the final dividend will be 7.1p a share, a 7.6 per cent rise on 6.6p the previous year. This will take the total dividend pay-out for the year to 10.2p, the same as last time.
Pressure on volumes
Items excluded from the underlying profit figure totalled a debit of £180 million, against one of £78 million in 2016-2017. Thus the statutory pre-tax profit figure was £409 million, against £503 million in 2016-2017.
It added: “In line with our expectations, consumers continue to shop more frequently across different channels and store formats, with convenience stores and on-line both showing strong growth.
“Discount and bargain retailers continue to open significant numbers of new stores and gain market share.”
It warned: “These trends continue to place pressure on volumes through the core supermarket format. However, we anticipate that supermarkets will remain an important channel for groceries.”
Mike Coupe, group chief executive, said: “We have accelerated the rate of change and innovation across the group and more customers are choosing to shop with us.” He added: “We are focused on making Sainsbury’s a destination of choice. We are clearly differentiated by the quality of our food.”