J Sainsbury plc, the food retailer, today announces preliminary results for the full year to 31 March 2001.

Results

  • Group sales** up 5.9% to £18.4 billion (2000 - £17.4 billion).
  • Underlying Group profit* before tax £549 million (2000 - £580 million)
  • Second half underlying Group profit* before tax and e-commerce up 16.0%.
  • Shaw's full-year profits up 45.6%.
  • Total dividend unchanged at 14.32 pence per share.
  • Stronger fourth quarter sales continue into the new year

Major short-term objectives met

  • Stabilised underlying Group profit* before tax and e-commerce at £602 million (2000 - £607 million).
  • Stopped year-on-year decline in profitability in Sainsbury's Supermarkets - second half profits up 21.0%.
  • Sustained improvement in customer numbers, up 6.0% in the second half.

Action taken to refocus and strengthen the Group

  • Sale of Homebase for total consideration net of costs of £975 million.
  • Sale of Egyptian business substantially completed in past week.
  • Acquisition of 19 Grand Union Stores, building Shaw's in the US to 185 stores

UK Supermarkets - 3 year transformation programme on track

Delivering quality products

  • Two major new innovative food ranges - launched "Taste the Difference" in November 2000 and "Blue Parrot Cafe" in March 2001
  • Major new quality clothing collection, designed by Jeff Banks and sold under the Jeff & Co. brand, launched in March 2001
  • Introducing 2,750 new or improved own label products

Improving the shopping experience

  • Significant progress in reinvigorating store portfolio - adding 778,000 sqft of new space with 27 new stores including 14 supermarkets, and 34 extensions to existing stores; 16 stores refurbished in the year.
  • Created 6000 new jobs.
  • Accelerated programme for reinvigoration into 120-130 stores in 2001/02.

(* before amortisation of goodwill and exceptional items)
(** including VAT in Sainsbury's Supermarkets and sales tax in Shaw's.)

Modernising the infrastructure

  • Replatforming our systems underway with IT outsourced to Accenture and blueprint for transition to new systems now in place
  • Major programme to modernise our distribution network centred on the development of a network of new highly automated depots around the country
  • On track to deliver £600 million of annualised savings by April 2004 - £90 million delivered during year.
  • On track to deliver margins to match industry leaders.

Sir Peter Davis, Group Chief Executive, said:

"Our second half results show that the changes we have made this year in our UK supermarkets business are beginning to take effect. In the short-term our food offer is demonstrably better and our stores levels of customer service and product availability are improving.  There is a lot of work still to be done but in the longer-term I am confident that we will have even better ranges, availability and stores to meet our customers needs.

"Shaw's in the US has had a successful year and our acquisition of the Grand Union stores strengthens our presence in the region.

"The sale of Homebase and of the Egyptian business have helped us to regain a stronger sense of purpose and direction for the group in the future, and gives us a stronger balance sheet and greater financial flexibility to fund our strategic investment programme.

As we only announced our 3-year recovery plan in October we have only just begun.  There is a great deal of work yet to do, with new depots to be built and brought on stream, all our computer systems to be renewed and most of our stores still to be refurbished.  Much of this will involve extra costs from double running but I am very encouraged by the progress to date and the determination of the team to deliver one of the UK's most extensive corporate recovery programmes.  Meanwhile the early store refurbishments, the improvements in product quality, and in store service are bringing customers back.  It is encouraging to see the turnaround in customer numbers and the increase in like-for-like sales since Christmas, which continue into the current financial year.  This shows the strategy is beginning to work."