Profits at Sainsbury’s have risen by 42 per cent to £380m, as chief executive Justin King officially allows the ‘R’ word to come into play.
In the 52 weeks to March 24, sales climbed 6.9 per cent to £18.52 billion - from £17.32bn - and the underlying profit figure jumped from £267m in the same period a year earlier.
Sainsbury’s launched a restructuring programme in 2004, which is due to come to an end in October this year. But the shoots of recovery have now fully blossomed.
The company was a high-profile takeover target for a private equity consortium in recent months, but King said that, despite rumour that the board - with the exception of the Sainsbury family - was broadly in favour of a takeover, it had never had a fully formed as no bid was ever been tabled.
King, who has now overseen nine quarters of consecutive sales growth, added that continued strong performance was the best manner in which to keep shareholders happy. “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,” he said.
His view was backed by chairman Philip Hampton. "This strong performance was delivered despite potential takeover speculation in the last quarter of the year," he said. "The board did not receive a formal bid approach capable of being put to shareholders," he added.
Sainsbury’s has cut prices on 20,000 products, and benefited from greater demand for organic and its premium Taste The Difference range. As a result, it said it is ahead of its current sales targets and set new forecasts for the coming three years.
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