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J Sainsbury sees first drop in profit in ten years

J Sainsbury
J Sainsbury   Group sales, excluding VAT, were down 0.7%

J Sainsbury reported its first drop in full-year underlying profit in ten years. Group sales, excluding value added tax, were down 0.7% in the 52 weeks ended March 14 to £23.78 billion ($36.12 billion).

Underlying pretax profit, which strips out one-time items and pension expenses, dropped 15% to £681 million but beat analysts’ consensus estimate of £659 million, according to the company.

J Sainsbury reported a full-year pretax loss of £72 million, including one-time charges, compared with a profit of £898 million a year earlier.

J Sainsbury in November outlined a plan to save £500 million over the next three years and has said it would cut hundreds of jobs as part of the process. The grocer has also said it would pour £150 million into cutting prices.

The company proposed a full-year dividend of 13.2 pence, down 24%.

J Sainsbury’s banking unit marked a relative bright spot, with operating profit up 17% to £62 million.The company said total capital costs associated with its transition to a new platform as it moves to take full ownership of the bank are expected to increase by between £80 million and £120 million.


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