| Interim Results for the 28 weeks ended 14 September 2024 |
| Strong grocery market share gains delivering profit leverage |
| Simon Roberts, Chief Executive of J Sainsbury plc, said: “Our food business is going from strength to strength and we’re making the biggest market share gains in the industry, with continued strong volume growth. More and more customers are coming to us for their big food shop, recognising our winning combination of value, quality and service. |
| “Reflecting our leading quality, more customers are choosing Taste the Difference, with sales up 18 per cent, the strongest premium private label growth in the market. And with the biggest-ever increase in customers’ value perception, we’re outperforming the market across the whole basket, particularly in core fresh food categories. |
| “Our grocery volume growth has delivered strong profit leverage at Sainsbury’s, partially offset by a tough first quarter at Argos. Argos trading has improved through the second quarter and in more recent weeks, so we continue to expect to deliver strong retail underlying operating profit growth and free cash flow generation for the full year. |
| “With strong momentum and increasing confidence in the strength of our grocery offer, we’re now investing to bring the best of Sainsbury’s to more people in more locations, including the recent acquisition of eleven Homebase and two Co-op stores. |
| “Our brilliant colleagues and suppliers are at the heart of everything we do and I want to thank them for all their hard work as we set ourselves up to deliver a fantastic Christmas for our customers. As we head into the festive season, there is real energy and excitement at Sainsbury's and Argos and we’re expecting another strong performance. |
| “We remain very focused on delivering for our customers, communities and shareholders.” |
| Financial Highlights |
- Sainsbury’s sales (excluding fuel) were up 4.6%, with Grocery sales growth of 5.0% and Sainsbury’s General Merchandise & Clothing sales decline of (1.5)%. Argos sales down (5.0)% and fuel sales down (4.4)%
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- Like-for-like Retail sales (excluding fuel) up 3.4% (Q1 2.7%, Q2 4.2%)
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- Retail underlying operating profit of £503m, up 3.7%, with strong Sainsbury’s and Nectar growth partially offset by a lower Argos contribution1
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- Sainsbury’s contribution is up 8.7%, with operating leverage driven by strong grocery volume growth. Operating margin 20 basis points higher year on year
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- Argos contribution1 lower year on year, reflecting tougher than anticipated trading conditions in the first quarter, before sales strengthened in the second quarter
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- Total Financial Services underlying operating profit of £18m, up 38%
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- Total underlying profit before tax of £356m, up 4.7%
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- Statutory profit after tax of £76m, down (51)%. Non-underlying items of £(176)m on a post-tax basis predominantly relate to the restructuring of the Financial Services division
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- Retail free cashflow of £425m. On track to deliver retail free cash flow of at least £500m in 2024/25
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- £150m share buyback to date, on track to complete £200m programme in H2 2024/25
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- Interim dividend of 3.9 pence
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| H1 Financial Summary |
2024/25 |
2023/24 |
YoY |
| Business performance |
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|
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| Retail sales (inc. VAT, excl. fuel) |
£16,297m |
£15,805m |
3.1% |
| Retail underlying operating profit |
£503m |
£485m |
3.7% |
| Total underlying profit before tax* |
£356m |
£340m |
4.7% |
| Total underlying basic earnings per share* |
10.7p |
10.5p |
1.9% |
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| Interim dividend per share |
3.9p |
3.9p |
- |
| Net debt (inc. lease liabilities) |
£(5,584)m |
£(5,643)m |
£59m |
| Non-lease net debt |
£(152)m |
£(231)m |
£79m |
| Return on capital employed* |
8.5% |
7.9% |
60bps |
| Statutory performance |
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|
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| Group revenue (excl. VAT, inc. fuel) |
£17,203m |
£16,813m |
2.3% |
| Profit after tax |
£76m |
£155m |
(51)% |
| o/w Continuing operations |
£174m |
£136m |
28% |
| o/w Discontinued operations |
£(98)m |
£19m |
n/a |
| Total basic earnings per share* |
3.2p |
6.6p |
(52)% |
| Net cash generated from operating activities (continuing) |
£592m |
£1,123m |
£(531)m |
*On a total basis inclusive of discontinued operations |
| Sales Performance (YoY)* |
Q1 |
Q2 |
H1 |
| Sainsbury’s |
4.2% |
5.1% |
4.6% |
| Grocery |
4.8% |
5.3% |
5.0% |
| General Merchandise & Clothing |
(4.3)% |
2.2% |
(1.5)% |
| Argos** |
(7.7)% |
(1.4)% |
(5.0)% |
| Total Retail (excl. fuel) |
2.3% |
4.1% |
3.1% |
| Like-for-like sales (ex. Fuel) |
2.7% |
4.2% |
3.4% |
| * Revised category disclosure reflects Next Level Sainsbury’s strategy choices. Historic disclosure is available on page 7
** Includes the impact of closing the Argos business in the Republic of Ireland. For sales performance excluding the impact of these closures, see page 7 |
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| Outlook |
- We remain confident of delivering strong profit growth in the full year, with continued leverage from Sainsbury’s grocery volume growth and a stronger Argos H2 performance. Combined with continued growth in Nectar profit contribution and delivery of cost savings, we continue to expect to deliver Retail underlying operating profit of between £1,010 million and £1,060 million, growth of between five per cent and ten per cent.
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- We now expect total Financial Services underlying operating profit (continuing operations and discontinued operations) to be between £15 million and £25 million (previously between break even and £15 million)
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- We continue to expect to generate Retail free cash flow of at least £500 million
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| For the full document click the link below: |
| J Sainsbury plc |
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