At its AGM, chairman of UK supermarket group J Sainsbury Philip Hampton confirmed changes to board personnel and updated shareholders on the company’s accelerated store development programme and the progress of its “Make Sainsbury’s Great Again” business plan.
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The Make Sainsbury’s Great Again plan includes improvements in customer offer and a recovery in sales performance. To date, including sales growth so far this year, the company said it had delivered GBP1bn (US$1.84bn) towards the GBP2.5bn target under the plan, and it is expected that over the next 12 to 24 months improved sales coupled with reduced costs will drive improved profitability. While the plan was “on track” and had made a good start, there was still much to do, the company said.
A new incentive framework was unveiled at the AGM. The 2006 Long Term Incentive Plan is designed to retain key talent for the future, including 1,000 senior managers and all supermarket store managers, for the long-term success of the business. The targets require increased return on capital employed and growth in cash flow per share. A new Deferred Annual Bonus Plan is also being proposed for the most senior management.
Having announced in May its intention to accelerate its store development programme, Sainsbury’s announced at the AGM that it has agreed to acquire a 35,000 square foot site for a food-focused store in Urmston, Manchester, which will form part of a major town centre redevelopment. The new store is expected to open in 2008.
Justin King, chief executive, presented operational and financial results for the 2005/06 financial year to shareholders, highlighting total sales growth (excluding petrol) of 5.8% (3.7% on a like-for-like basis) and the delivery of GBP110m in cost savings, resulting in an increase in underlying profit before tax of 12.2%.
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By GlobalDataCommenting on the results for 2005/06, Hampton said: “At last year’s meeting I said how I believed that Sainsbury’s, with its passion for food, its history of quality and innovation and its strong ethical approach, was a company worth fighting for and I think our performance over the last financial year has increased confidence in our prospects among customers, colleagues and, I believe, among shareholders as well.”
Hampton also announced that since the last AGM, Darren Shapland had taken over as chief financial officer, John McAdam as senior independent director, and Anna Ford as a non-executive director. In addition, Hampton confirmed that, as previously announced, Bridget Macaskill is to step down as a non-executive director with effect from 12 July.
