PROFITS remain in decline at Sainsbury, one of the weaker supermarket multiples in Britain. Almost £1 billion was wiped off the stock market value of the giants food retailing group yesterday after it stunned the stock market with a profits warning.
The group said it expected current year profits to fall for the second successive year, projecting a figure of between £640 and £650 million. This compares with £712 million last year and £809 million the year before.
Industry analysts warned that the news, combined with modest Christmas sales figures, meant the company needed an overhaul of its trading strategy.
The news sent shares in the company plummeting 51p to 341p, wiping £938 million off its £7.21 billion stock market value. The profits fall last year was the first fall in more than 20 years as a public company.
Chairman David Sainsbury expressed " disappointment "that business investment costs have affected group profitability".
The group said that sales grew by 4.4 per cent in the run-up to Christmas, a figure slightly better-than-expected. He said the board was encouraged by the sales growth and that management "is now focused, on turning increased sales into profit growth
The figures contrast with the market leader Tesco which earlier this week reported like-for-like sales growth of 7.5 per cent.
Sainsbury's first store in Northern Ireland opened at Ballymena in early December and sales have exceeded forecast. "Obtaining planning consent continues to be difficult but we anticipate a similar opening programme next year."
