- Sainsbury’s swings to £137 million of pre-tax loss in the first half.
- The supermarket chain reports £14.94 billion of revenue in H1.
- Sainsbury’s declares 3.2 pence of interim dividend on Thursday.
Sainsbury’s plc (LON: SBRY) swung to a pre-tax loss in the first six months of fiscal 2021 due to higher costs attributed to the Coronavirus pandemic.
Shares of the company were reported about 0.5% up in premarket trading on Thursday. But Sainsbury’s tanked close to 5% on market open. Including the price action, it is now trading at 200 pence per share versus a higher 232 pence per share at the start of the year. In March, the stock had plummeted to a year to date low of 175 pence per share due to COVID-19 restrictions.
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Sainsbury’s reports £14.94 billion of revenue in the first half
Sainsbury reported £137 million of pre-tax loss in the fiscal first half that concluded on 19th September. The grocer valued one-off costs attributed to its strategic changes, including Argos store closures, at £438 million. In comparison, the British company had registered £9 million of profit in the same period last year.
Sainsbury also said on Thursday that its restructuring, including the closure of 420 Argos stores, will result in up to 3,500 jobs lost in the coming years.
The United Kingdom’s second-largest chain of supermarkets said retail costs in H1 stood at £290 million due to the ongoing COVID-19 crisis. Retail costs were partially offset by business-rates relief that it valued at £230 million. In Q1, Sainsbury’s had reported an 8.2% annualised growth in underlying retail sales.
In terms of revenue, Sainsbury’s posted a decline to £14.94 billion versus the year-ago figure of £15.10 billion. According to the London-based company:
“Sales during the first half were stronger than the base-case assumptions we outlined in April, particularly at Argos, driving a strong underlying profit increase against a soft comparative base.”
Sainsbury’s declares 3.2 pence of interim dividend on Thursday
Underlying pre-tax profit, Sainsbury’s added, came in at £301 million in the fiscal first half. In the comparable period of last year, its underlying pre-tax profit was capped at a lower £238 million.
The company’s board on Thursday declared 3.2 pence of interim dividend that was only marginally lower than 3.3 pence last year. The board also recommended 7.3 pence of a special dividend. Sainsbury’s said:
Our current assumptions would result in full-year group underlying pre-tax profit increasing by at least 5% year on year.”
At the time of writing, the British chain of supermarket is valued at £3.42 billion and has a price to earnings ratio of 34.39.