Sainsbury’s reported a pre-tax loss of £137 million in the first half.
The supermarket chain reported revenues of £14.94 billion for the first half.
Sainsbury’s announces an interim dividend of 3.2 pence on Thursday.
Sainsbury’s plc (LON: SBRY) reported a pre-tax loss for the first six months of fiscal 2021 due to higher costs associated with the coronavirus pandemic.
The Company’s shares traded approximately 0.5% higher in pre-trade trading on Thursday. However, Sainsbury’s shares fell by almost 5% when the market opened. Including the price action, the company is now trading at 200 pence per share, up from a higher 232 pence per share at the beginning of the year. In March, the share price had fallen to its lowest level for the year to date of 175 pence per share due to COVID 19 restrictions.
Sainsbury’s reports first half year sales of £14.94 billion
Sainsbury reported a pre-tax loss of £137 million in the first half year, which ended on 19 September. The grocer estimated that the one-off costs of its strategic changes, including the closure of the Argos stores, were £438 million. This compares with a £9 million 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 the loss of up to 3,500 jobs in the coming years.
The UK’s second largest supermarket chain said retail costs in the first half of the year were £290 million due to the ongoing COVID 19 crisis. The retail costs were partially offset by £230 million in corporate tariff relief. In the first quarter, Sainsbury’s reported annualized growth in underlying retail sales of 8.2%.
In terms of turnover, Sainsbury’s reported a decline to £14.94 billion from the previous year’s £15.10 billion. According to the London-based company:
“Sales in the first half were stronger than the baseline assumptions we outlined in April, particularly at Argos, resulting in a strong underlying profit increase over a soft comparative basis.
Sainsbury’s announces on Thursday an interim dividend of 3.2 pence
The underlying pre-tax profit, Sainsbury’s added, was £301 million for the first half of the financial year. In the same period last year, the underlying pre-tax profit was limited to a lower figure of £238 million.
The Company’s Board of Directors declared on Thursday an interim dividend of 3.2 pence, only slightly down on the previous year’s 3.3 pence. The Board also proposed a special dividend of 7.3 pence. said Sainsbury’s:
Our current assumptions would result in the Group’s underlying pre-tax profit for the full year increasing by at least 5% over the previous year,” Sainsbury’s said.
At the time of writing, the UK supermarket chain is estimated at £3.42 billion and has a price-earnings ratio of 34.39.