Sainsbury shrugs off failed bid with £232m profit

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The supermarkets chain posted profits up 37% to £232 million in the half-year to 6 October — a result that topped City expectations and is likely to help the shares recover a little sheen. Sales were up 4.7% to almost £10 billion as 16.5 million customers a week shopped there.

The last-minute decision by Delta Two, owned by the Qatari royal family, to walk away from a £10.6 billion takeover offer wiped more than £2 billion from Sainsbury's value last week.

The shares today dipped 4p to 421¾p. Chief executive Justin King insisted he wasn't missing the £11 million he would have got had the takeover succeeded.

"You can't lose money you never had," he said.
He admitted the "protracted" talks with Delta were a "potential distraction" but said the three-year recovery plan he put in place had succeeded, adding: "I'm not sure everyone believed us when we said we would concentrate
on our day job. Hopefully these figures show that we did."

Delta retains a 25% stake and may bid again once takeover rules allow and market conditions have improved.

King conceded that the company's recent success makes it more attractive to bidders. He has overseen a reversal in Sainsbury's fortunes since becoming chief executive, but today he said he has no intention of moving on yet. He added that consumers were increasingly stretched, but he believes this could be good news for Sainsbury's.

"When household budgets are stretched, people cut down on holidays and eating out, but they tend to eat more quality food at home," he said.

Sainsbury's also unveiled a joint venture with Land Securities as it moved to answer the call to get more value from its property portfolio. Numis Securities said: "This shows that Sainsbury's is now working on maximising the value of its property, and we believe it should be taken positively by the investment community."

Nick Bubb at Pali International said of the results: "Sainsbury's has withstood the push from Morrisons big new advertising campaign, so Justin King should be in good heart today."

The interim dividend is 3p, up 25%.