Asda has reported a slight fall in profits which still outstripped Sainsbury’s, while also revealing it has been effectively "sold" by parent company Wal-Mart.
The retailer announced bumper profits of £520.4 million before tax for the third quarter, which represents a slight fall from £532.7m. This is a 2.3 per cent year-on-year fall, but sales hit £18.57 billion, up from £16.7bn.
Meanwhile, it has emerged that Wal-Mart has sold Asda for £6.9bn to a Leeds-based investment vehicle featuring Andy Clarke, Corinth Services Ltd, which is within the Wal-Mart group of companies.
The restructuring deal represents a sell-off for just £200m more than Wal-Mart paid for the supermarket chain in 1999.
In August, subsidiary Wal-Mart Stores (UK) sold 3.1bn ordinary shares in Asda in return for a £5.7bn cash payment from Corinth and £1.24bn in shares, according to the retailer’s accounts.
The decision was made as the result of a "group reconstruction" for "good financial management" and five Asda directors, including marketing chief Rick Bendel and chief operating officer Andy Clarke, were appointed to Corinth's board. They join Asda's chief executive Andy Bond and chief financial officer Judith McKenna on the board.
The seven directors at Corinth will receive Asda's dividend payments, which last year stood at £160m.
Sainsbury’s is expected to post pre-tax profits up by 16 per cent to £300m for the 28 weeks to October 3 on Wednesday.
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