British retailer Sainsbury(J) Plc. (SBRY.L,JSAIY.PK) Wednesday said profit in the first half of the year increased from last year, amid strong growth in non-food business. Further, the company lifted its interim dividend by 6.7 percent.
Pre-tax profit advanced to 405 million pounds from 395 million pounds. Underlying profit before tax was 373 million pounds, while it totaled 354 million pounds last year, due to strong performance in joint venture profits. Profit attributable to owners of the parent rose to 320 million pounds from 302 million pounds. Earnings per share grew to 16.8 pence from 15.9 pence. Revenue increased to 12.16 billion pounds from 11.69 billion pounds in the prior year. Including VAT and fuel, sales rose 4 per cent to 13.37 billion pounds, helped by a 2.3 percent contribution from new space and like-for-like sales growth of 1.7 per cent.
LFL sales growth was 1.4 per cent in the first quarter that included five bank holidays, a royal event and periods of unseasonal weather. The second quarter, which contained the Olympics, Paralympics and continued periods of unseasonal weather, had LFL growth of 1.9 per cent.
The retailer said its share of the grocery market is the highest for almost a decade at 16.7 per cent, with 31 consecutive quarters of like-for-like sales growth.
Against the background of the unseasonal weather, six bank holidays, the Queen's Diamond Jubilee and the Olympic and Paralympic Games, the company saw a continuation of savvy shopping in the first half. However, customers put on average one fewer item in their basket, ''although the impact of this trend is now annualising.''
Sainsbury's added a gross 351,000 sq ft of selling space since the beginning of the year, up 1.7 percent from last year.
The contribution of 2.4 percent from net new space was slightly ahead of Sainsbury's expectations. Both convenience and online businesses saw growth of around 20 per cent, and non-food continued to grow at more than twice the rate of food.
The company's board proposed an interim dividend of 4.8 pence per share, up 6.7 percent from last year.
David Tyler, Chairman, said: "Sainsbury's has made a strong start to the year, delivering continued outperformance in what has remained a challenging market. We have grown our underlying basic earnings per share to 15.2 pence, return on capital employed remains unchanged at 10.9 per cent and our interim dividend is 4.8 pence per share, up 6.7 per cent."
SBRY.L closed down 0.5 percent on Tuesday at 347.20 pence.
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