Sainsbury's report 42% rise in pre-tax profits

Sainsbury’s has reported a 42 per cent rise in pre-tax profit in its annual results for the year ended March 2007 and is to refurbish over half of its property portfolio in the next three years.

The supermarket has seen a massive rise in pre-tax profit from £267m in 2006 to £380m. The group’s total sales were up 6.7 per cent from £17m in 2005 to £18.5 this year.

Sainsbury’s property portfolio has been valued at £8.6bn, 65 per cent over the current net book value.

The company’s goals for its three year plan have been laid out and include a ten per cent growth in new space and the refurbishment of over half its existing stores for which around £750m has been earmarked.

The group has been at the centre of some controversy this year after a period of takeover speculation when the group were in talks with a private equity firm about a £10bn deal. But the deal fell through.

Chairman Philip Hampton said: “The board received a number of proposals from a private equity consortium all of which were subject to a number of pre-conditions related to the consortium’s proposed financial structure.

“These conditions were outside the control of the Board and the consortium concluded they could not be satisfied and decided to withdraw.”

Commenting on the results, chief executive Justin King said: “This strong sales performance is ahead of our own expectations. It's also our best for many years. We believe now is the right time to look to the next stage of our recovery and to expand the business to drive growth for the longer-term.

“Today we are announcing new three-year targets which build on the strong

progress we've made to date and move us from recovery to long-term growth. Our

focus on driving sales continues with a target to deliver £3.5 billion of

additional sales split two-thirds from grocery and one-third from non-food

ranges from March 2007 to March 2010. Added to the £1.8 billion of sales growth

already delivered, this new target, if achieved, would give a total sales growth

of £5.3 billion over the five-year period March 2005 to March 2010.”