Sainsbury's unveiled plans to cut its full
year dividend after full-year like-for-like sales and profit before tax
both declined because of difficult trading conditions, even though the
group still managed to beat expectations.
In the 52 weeks to 12 March, the FTSE 100
retailer posted a 13.8% year-on-year decline in underlying profit before
tax, while like-for-like sales excluding fuel fell 0.9% and total group
sales dropped 1.1% from the year before to £25.83bn.
The group, Britain's second-biggest
grocer, added its operating profit tumbled 11% from the corresponding
period in 2015 to £700m, a figure that was slightly higher of analysts'
expectations for a £683.4m reading.
Despite the decline in both profit and sales,
Sainsbury's said it outperformed its peers over the last 12 months but
revealed it will cut its final dividend by 1.2% year-on-year to 8.1p,
meaning at 12.1p its full-year dividend will be 8.3% lower than last
year.
Sainsbury's, which last month clinched a
£1.4bn deal for the takeover of Argos owner Home Retail, added its
statutory profit before tax jumped to £548m from a £72m loss in the year
before, and group chief executive Mike Coupe claimed the group remained
on the right track.
"We continue to outperform our main
supermarket peers and maintain market share in a competitive,
deflationary environment," he said.
"We believe we have the right strategy in
place and are taking the right decisions to achieve our vision to be the
most trusted retailer where people love to work and shop."
Coupe attributed the decline in sales to the
ongoing price war among Britain's biggest supermarkets, which he expects
to last for the foreseeable future.
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