Preliminary Results for the 52 weeks to 21 March 2009

Preliminary Results for the 52 weeks to 21 March 2009

Strong sales and profit performance with significant growth potential
Financial Summary
Total sales (including VAT) up 5.7 per cent to £20,383 million (2008: £19,287 million)
Like-for-like sales (excluding fuel, including VAT) up 4.5 per cent(1)
Underlying profit before tax up 11.3 per cent at £543 million (2008: £488 million)(2)
Profit before tax of £466 million (2008: £479 million)
Underlying basic earnings per share up 12.8 per cent to 22.1 pence (2008: 19.6 pence)(3)
Basic earnings per share of 16.6 pence (2008: 19.1 pence)
Proposed final dividend of 9.6 pence per share (2008: 9.0 pence) making full year dividend of 13.2 pence (2008: 12.0 pence), up 10.0 per cent
Operating Summary
Four years of consecutive like-for-like sales growth
Increased customer numbers and basket growth: over 18 million customer transactions each week
Universal customer appeal catering for full range of needs and budgets
Significant improvement in customer price perception
Continued investment in product quality and price helping customers manage tighter budgets
Cost efficiency programme offsetting over 75 per cent of inflationary pressure
Strong balance sheet supported by property assets and with long-dated debt
120,000 colleagues share annual bonus of £60 million
Making Sainsbury’s Great Again: Recovery to Growth
Strong brand heritage underpins Sainsbury’s universal appeal
Quality and value of food offer continues to provide differentiation from major competitors
Continued development of non-food offer: TU clothing bought by over 40 per cent of customers
Sainsbury’s Bank delivering profit from good income growth and cost control
Online food sales now annualising at over £500 million: non-food online launching in H1 2009/10
Accelerated growth of convenience chain with 50 new stores planned in 2009/10 and 100 in 2010/11
Over 4 per cent gross space growth achieved in 2008/09 and on track for over 5 per cent in 2009/10
Over £750 million of gross property transactions completed
Philip Hampton, chairman, said: “This is another good set of results for Sainsbury’s with continuing growth in sales and tight cost control leading to further improvements in profit. Sainsbury’s is a robust business with a strong financial position. Underlying profit before tax for the year was up 11.3 per cent to £543 million(2) with underlying basic earnings per share up 12.8 per cent to 22.1 pence. The Board is recommending a final dividend of 9.6 pence per share, making the full year dividend 13.2 pence, an increase of 10.0 per cent over the previous year. This dividend is covered 1.67 times by earnings in line with our long-term policy of dividend cover of between 1.50 and 1.75 times.”

Justin King, chief executive, said: “Our business is growing because we have responded quickly and effectively to a rapidly changing environment. Total sales for the year were up 5.7 per cent and like-forlike sales excluding fuel were up 4.5 per cent(1). In addition we have continued to drive cost efficiencies offsetting over 75 per cent of cost inflation and delivered further profit growth.

“Fixing fundamental parts of our operation through our ‘Making Sainsbury’s Great Again’ recovery programme has placed the business in a strong position. Although consumer confidence in the UK has declined during the year, our performance improved as a result of the strength of the Sainsbury’s brand and actions we have taken to adjust our offer to changing customer trends.

“Sainsbury’s is a long-established company and celebrates its 140th anniversary this month. It has a heritage of offering customers great products at fair prices, through a variety of economic trading periods, and we have developed our offer to compete and grow in what has been a very challenging period for the UK retail industry.

“Our universal customer appeal and continued investment in price and quality have been fundamental to our growth, catering for a range of changing customer needs and trends. Over the past 12 months consumers have become increasingly ‘savvy’ and have responded to rises in the cost of living by making significant changes to the mix of products they buy. In an effort to manage their household budgets more tightly, people are eating out less and cooking at home more. They are shopping around to get the best prices and deals but also want the best quality they can afford and to stay true to their values.

“Sainsbury’s ‘good, better, best’ product range hierarchy has provided customers with the flexibility to change what they buy, rather than where they shop. Customer transactions have grown to over 18 million a week and basket size has also increased. Further improvements in service levels and product availability have been achieved and as customers increasingly compare the value offered in different supermarkets they are realising they can get both great products and fair prices at Sainsbury’s. Investment in pricing, improved promotions and a range of marketing activities have all combined to significantly improve our customers’ price perception.

“We have continued to invest in our five areas of focus, each of which has delivered over the past year, and which provide significant opportunities for future growth. The areas are to build and stretch our lead in food, accelerate the development of non-food ranges and services, extend the reach of our brand via our online and convenience offers, to grow our store estate and actively manage our property assets.

“Our progress in the last four years has made the company a stronger business with a wide customer base and universal appeal. We are performing well and have significant opportunities for further growth. We expect the current economic environment to remain challenging but our focus on doing a great job for customers means we are well positioned to continue our good progress.”

Like-for-like sales: Like-for-like sales growth has been Easter-adjusted for comparative purposes. 2008/09 included one Easter Sunday trading week. 2007/08 included one Easter Sunday trading week and two Good Friday trading weeks.
Underlying profit before tax: Profit before tax from continuing operations before any profit or loss on sale of properties, investment property fair value movements, impairment of goodwill, financing fair value movements and one-off items that are material and infrequent in nature.
Underlying basic earnings per share: Profit after tax from continuing operations attributable to ordinary shareholders before any profit or loss on sale of properties, investment property fair value movements, impairment of goodwill, financing fair value movements and one-off items that are material and infrequent in nature, divided by the weighted average number of ordinary shares in issue during the period, excluding those held by the ESOP trusts, which are treated as cancelled.
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Sainsbury’s will announce its 2009/10 First Quarter Trading Statement at 07:00 (BST) on 17 June 2009.
A results presentation for analysts and investors will be held at 09:45 (BST) on 13 May 2009.

To view the slides of the Results Presentation and the Webcast: We recommend that you register for this event in advance. To do so, please visit and follow the on-screen instructions. To participate in the live event, please go to the website from 09:30 (BST) on the day of the announcement, and further instructions will be on the website. An archive of the webcast will be available from 12:00 (BST).

To listen to the Results Presentation: You may dial in to listen to the results on +44 (0) 1296 480 100. You will be asked to give the passcode, 632 465, your name and company details. You will then be placed on hold until the presentation starts. An archive recording of this event will be available from 12:00 (BST) by calling +44 (0) 207 136 9233, pin number 80926223. The archive is available for 28 days.

To view the transcript of the presentation: Visit the J Sainsbury plc website at from 15 May 2009.

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