Sainsbury Swings to FY16 Pretax Profit But Cuts Dividend Payout
04 May 2016 - 5:24PM
Dow Jones News
By Ian Walker
LONDON--J Sainsbury PLC (SBRY.LN) Wednesday reported a swing to
pretax profit for fiscal 2016, but cut its dividend payout as it
continues to manage costs.
The U.K.'s second largest grocer by market share added that it
achieved 225 million pounds ($327.38 million) of cost savings in
the year ended March 12, and expects to save around GBP120 million
next year. It added that the company is on track to deliver the
three-year GBP500 million target by the end of fiscal 2018.
The company, which is in the middle of a GBP1.4 billion takeover
for Argos owner Home Retail Group PLC (HOME.LN), made a pretax
profit for the year of GBP548 million, compared with a loss of
GBP72 million a year earlier, on sales excluding value-added tax
and including fuel of GBP23.51 billion and GBP23.78 billion
respectively.
The board has cut the final dividend to 8.1 pence a share, from
8.2 pence a year earlier, taking the total payout for the year to
12.1 pence, down from 13.2 pence in fiscal 2015.
In March, Home Retail recommended the 171.5 pence a share offer
by Sainsbury's, ending a four-month-long battle to buy it. The
price includes 0.321 in Sainsbury's shares, 55 pence in cash, 25
pence a share reflecting a GBP200 million planned return to
shareholders from the Homebase sale, and 2.8 pence in lieu of the
Home Retail final dividend.
The offer is expected to complete in the third quarter of this
year, provided it gets shareholder and regulatory approvals.
An approach by Sainsbury for Home Retail last November was
rejected but in February the two companies tentatively agreed
terms.
Based on the latest data from Kantar, which monitors the
household-grocery purchasing habits of 25,000 demographically
representative households in the U.K., Sainsbury's had a market
share of 16.4% in the 12 weeks ended March 27, behind Tesco PLC
(TSCO.LN) which had a 28.1% share.
-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
(END) Dow Jones Newswires
May 04, 2016 03:09 ET (07:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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