May 14 - Philip Hampton, chairman, said: “This year has been particularly significant for Sainsbury's since it marked the completion of the Making Sainsbury's Great Again (“MSGA”) recovery plan announced in October 2004 and we moved from a period of recovery to growth. Underlying profit before tax for the year was up 28.4 per cent to £488 million, more than double the £238 million reported for the year to March 2005, which was prior to our recovery plan.
Financial Summary 2008
· Total retail sales (inc VAT) up 5.8 per cent to £19,287 million (2007: £18,227 million)
· Like-for-like sales (ex fuel, inc VAT) up 3.9 per cent (1)
· Underlying profit before tax up 28.4 per cent at £488 million (2007: £380 million) (2)
· Profit before tax of £479 million (2007: £477 million)
· Underlying basic earnings per share 19.6 pence (2007: 14.7 pence) (3)
· Basic earnings per share of 19.1 pence (2007: 19.2 pence)
· Proposed final dividend of 9.00 pence per share (2007: 7.35 pence), up 22.4 per cent making full year dividend of 12.00 pence (2007: 9.75 pence) up 23.1 per cent
Making Sainsbury’s Great Again: Targets exceeded
· Grown sales by £2.7 billion: exceeding plan to reach £2.5 billion sales growth by March 2008 (4)
· 13 quarters of consecutive like-for-like sales growth
· Over £450 million invested in customer offer delivering best price position for many years
· Cost savings of over £440 million achieved
· Profit more than doubled (£488 million vs. £238 million) demonstrating strong operational gearing (5)
· 117,000 colleagues share annual bonus of £47 million: Over £150 million awarded in past three years
· 2.5 million additional customers: over 16.5 million a week compared to 14 million a week in 2005 (6)
Making Sainsbury’s Great Again: Recovery to growth
· Transacted around £2 billion of asset management activity including two property JVs since March 2007 (7)
· New 30,000 sq ft non-food offer launched in April 2008
· Plans announced to launch an online non-food offer: £15 million revenue investment in 2008/09
· Strengthening of operating board with four new members
Philip Hampton, chairman, said: “This year has been particularly significant for Sainsbury’s since it marked the completion of the Making Sainsbury’s Great Again (“MSGA”) recovery plan announced in October 2004 and we moved from a period of recovery to growth. Underlying profit before tax for the year was up 28.4 per cent to £488 million, more than double the £238 million reported for the year to March 2005, which was prior to our recovery plan.
“It is a credit to the management team and colleagues at Sainsbury’s that our performance over the past 12 months was delivered against an extended backdrop of speculation concerning the potential takeover of the company which lasted for the majority of 2007. Throughout this period the business continued to perform well reflecting the exceptional leadership and commitment from the management team. The Board is recommending a final dividend of 9.00 pence per share, making the full year dividend 12.00 pence, an increase of 23.1 per cent compared to last year. This is covered 1.63 times by earnings which is in line with our stated policy of dividend cover in the range of between 1.5 times and 1.75 times.”
Justin King, chief executive, said “When I joined Sainsbury’s we undertook a complete review of the business and outlined a plan to Making Sainsbury’s Great Again in October 2004. The plan was based on delivering great quality food at fair prices. To achieve this on an ongoing basis we needed to fix many fundamental parts of our operation. Only by satisfying customers and improving sales could we return to sustainable growth in both sales and profitability and this has driven everything we have done over the past three and a half years.