Sainsbury's profit meets City forecasts

10th Nov 2010 07:05

Sainsbury's made enough money during the first half to keep the analysts happy and sales were pretty much as expected given the supermarket giant issued an update just a month ago.Profit before tax, the benefit of any property deals and other one-offs was £332m for the 28 weeks to 2 October, up 8.1% on last year. Analysts were looking for £330m. Including property profits, profit grew 36% to £466m.Sales including VAT increased by 7% to £11.94bn and rose 4.8% ignoring fuel. Like for like (LFL) sales including VAT but not fuel were up 2%. With fuel they jumped 4.4%."The LFL growth rate was below Sainsbury's medium-term planning assumption of between three and four per cent, but represented a good performance in tough economic conditions, and was ahead of market growth," the company said. Like for like sales growth was 1.1% in the first quarter and 2.9% in the second.Cost savings, including the rollout of self-scan checkouts and more efficient logistics, have fully offset inflationary pressures during the first half, helping reduce labour costs relative to sales. Chief executive Justin King said customer numbers were now at an all-time high of over 20m transactions every week, and the company is on track to hit its target space growth of 15% over the two years to March 2011.And though the economic environment is expected to remain challenging in the second half, King thinks the company is in a position to do well.The interim dividend of 4.3p a share is up on the 4p paid last year.