Sainsbury (J) (SBRY)

[Arborbridge]

Interesting for me that another group is sniffing around. Sainsbury are fourth in my list for considering a topup, but I have had a poor result from them for years. Maybe time to take courage while they are in an uptrend, but still yielding well.

Arb.

[Nimrod103]

Does rather look as if Sainsbury's is now "in play", with a distinct possibility of a successful bidder taking it private. Which will leave Tesco as the only publicly quoted UK supermarket chain.
Since AIUI Sainsbury's no longer owns any of its real estate, I don't really see the advantage of such a takeover, or such a move to go private unless it is to adopt the Aldi/Lidl business model.

Owns some Sainsbury shares (bought reluctantly to please my other half).

[idpickering]

Does rather look as if Sainsbury's is now "in play", with a distinct possibility of a successful bidder taking it private. Which will leave Tesco as the only publicly quoted UK supermarket chain.
Since AIUI Sainsbury's no longer owns any of its real estate, I don't really see the advantage of such a takeover, or such a move to go private unless it is to adopt the Aldi/Lidl business model.

Owns some Sainsbury shares (bought reluctantly to please my other half).

This is interesting indeed. To be honest, I sold my SBRY shares recently, and now only hold TSCO in the sector.

Ian.

[idpickering]

Acquisition of interest in Highbury and Dragon investment vehicles.

On 21 September 2022, J Sainsbury plc ("Sainsbury's") announced that it had reached agreement on an acquisition price for stores held in the Highbury and Dragon investment vehicles. Sainsbury's has held a c.49% interest in Highbury and Dragon since it was created in 2000. The vehicles comprise the freeholds of 26 Sainsbury's supermarkets which are leased to Sainsbury's. The remaining c.51% is owned by Supermarket Income REIT.

Today, Sainsbury's announces the exchange of contracts for the purchase of Supermarket Income REIT's c.51% interest in the Highbury and Dragon investment vehicles. The purchase will be implemented through an acquisition of Cornerford Limited, Horndrift Limited, Avenell Property PLC and Hobart Property PLC (the "Transaction").

The Transaction will result in Sainsbury's acquiring the freehold of 21 stores in the Highbury and Dragon investment vehicles which will continue to be operated as Sainsbury's supermarkets. The remaining five stores will be sold by Sainsbury's. Sainsbury's has entered into new 15-year leases on four of these stores with five yearly open market rent reviews and a tenant break option at year ten. Following completion of the transaction, Supermarket Income REIT has the benefit of an option to acquire the four stores which are subject to the new Sainsbury's leases for a net consideration of £33.2 million (net of SUPR's existing interest and excluding acquisition costs). It is expected that the one remaining store will be sold at vacant possession value.

The Transaction is expected to complete on 17 March 2023 for a total consideration of £430.9 million (excluding costs) which will be paid in three tranches. £279.3 million will be paid on 17 March 2023 and £116.9 million will be paid on 10 July 2023. The third tranche of £34.7 million is conditional on the sale of the remaining five stores by Sainsbury's. Additionally, Sainsbury's will fully fund the Highbury and Dragon bond redemptions of £170.5 million on 20 March 2023 and £130.4 million on 13 July 2023 respectively. The total consideration and Highbury and Dragon bond redemptions will be funded by utilising the Group's cash resources and also by drawing under a committed unsecured term facility.

https://www.investegate.co.uk/sainsbury ... 00118788S/

Ian (No holding).

[idpickering]

Preliminary Results for the 52 weeks ended 4 March 2023.

Financial highlights

· Retail sales up 5.2%, ex. fuel sales up 2.0%. Statutory Group sales (ex. VAT) up 5.3%. Q4 ex. fuel retail sales up 7.1% (7.8% like-for-like)

· Grocery sales up 3.0%, driven by inflation and improved market share performance. Q4 grocery sales up 7.4%

· General Merchandise (GM) sales down 0.4%, with Argos gaining share in a weak general merchandise market. Q4 GM sales up 7.6% (Argos sales up 9.3%)

· Underlying profit before tax of £690 million, down 5% and at the top end of £630 million to £690 million guidance range. Up 18% versus 2019/20 pre-pandemic UPBT of £586 million. Year-on-year decline reflects annualisation of COVID-19 driven grocery volume, investment in the customer proposition and operating cost inflation, partially offset by operating cost savings and lower finance charges

· Statutory profit before tax of £327 million versus £854 million last year. Impacted by non-cash asset impairments, driven by a higher discount rate, and one-off income from legal settlements in the prior year

· Retail free cash flow £645 million

· Year end net funds, excluding leases, of £144 million, a £285 million improvement. Net debt including leases improved by £415 million to £6,344 million

· Underlying earnings per share 23.0 pence, down 9%. Basic earnings per share 9.0 pence, down 70%

· Proposed final dividend of 9.2 pence, full-year dividend of 13.1 pence, in line with last year

· Outlook: At this early stage of the year, we expect UPBT between £640 million and £700 million in FY2023/24 and we continue to expect to generate at least £500 million of Retail free cash flow.

And later;

Dividends

The Board has recommended a final dividend of 9.2 pence per share (2021/22: 9.9 pence). This will be paid on 14 July 2023 to shareholders on the Register of Members at the close of business on 9 June 2023. The Group's policy to pay a dividend of around 60 per cent of underlying earnings has allowed us to maintain a full-year dividend of 13.1 pence (2021/22: 13.1 pence).

Sainsbury's has a Dividend Reinvestment Plan (DRIP), which allows shareholders to reinvest their cash dividends in our shares. The last date that shareholders can elect for the DRIP is 23 June 2023.

https://www.investegate.co.uk/sainsbury ... 00066136X/

Ian (No holding).

[Dod101]

As is normal for the quoted supermarkets (all two of them!) these results are not very inspiring.

Dod

[Tedx]

An article from the Motley Fool from early February on Sainsbury:

Is Sainsbury’s now a takeover target?

https://www.fool.co.uk/2023/02/03/is-sa ... er-target/

[idpickering]

Trading Statement.

First Quarter Trading Statement for the 16 weeks to 24 June 2023

Lower prices on most popular products driving return to volume growth

Trading Highlights

Continued strong Grocery momentum, reflecting investment in value, innovation, service and availability, driving a return to volume growth and strengthening market share outperformance1. General Merchandise growth driven by further Argos market share gains2, with strong Consumer Electronics sales offsetting weaker early Summer seasonals performance.

· Like-for-like sales (exc. fuel) up 9.8%. Total Retail (exc. fuel) sales up 9.2%

· Strong Grocery performance, with sales up 11%

· General Merchandise sales up 4%, with Argos sales up 5.1%

· Clothing sales down 3.7%

· Outlook unchanged; continue to expect FY23/24 underlying profit before tax of between £640 million and £700 million and to generate at least £500 million of Retail free cash flow

https://www.investegate.co.uk/announcem ... nt/7610867

Ian (No holding).

[idpickering]

Sainsbury's Bank confirms sale of mortgage portfolio to The Co-operative Bank.

J Sainsbury plc ("Sainsbury's") today confirms that Sainsbury's Bank plc ("Sainsbury's Bank") has agreed to sell its mortgage portfolio to The Co-operative Bank p.l.c. ("The Co-operative Bank") for a cash consideration of around £464 million*, payable at completion. The gross asset value of the mortgage book at 30 April 2023 was £479 million (£467 million net asset value after hedging). The sale follows the September 2019 announcement by Sainsbury's Bank that it would be stopping all new mortgage sales and was reviewing options for the existing mortgage book.

The deal is expected to complete alongside transfer of beneficial ownership on 15 August 2023, with legal title transfer occurring within 12 months. Following a period of transition of up to one year from completion, Sainsbury's Bank mortgage customers will transfer to The Co-operative Bank.

Sainsbury's Bank intends to use the proceeds from the transaction to help optimise the overall cost of funding for Sainsbury's Bank.

https://www.investegate.co.uk/announcem ... o-/7691603

Ian.

[idpickering]

Half-year Report.

Financial Highlights

· Grocery sales up 10.1%. Volume growth across both quarters driving record market share gains and consistent market outperformance

· General Merchandise sales up 1.1% despite tough weather comparatives over the summer (up 2.5% excluding the impact of the closure of Argos in the Republic of Ireland)

· Clothing sales down 8.4%, reflecting a disciplined trading approach in a seasonally weak and promotionally-driven market

· Statutory Group sales up 3.5%, with fuel sales down 19.6% driven by lower input prices. Like-for-like Retail sales (excluding fuel) up 8.4%

· Retail operating profit £485 million, up 2%, reflecting strong volume-driven grocery profit growth and continued delivery of Save to Invest cost saving benefits, partially offset by the impact of weaker seasonal sales on General Merchandise profits

· Financial Services operating profit of £13 million versus £19 million last year. This primarily reflects net interest margin reduction, with higher funding costs not being fully passed on through higher lending costs

· Underlying profit before tax of £340 million, flat year-on-year

· Underlying earnings per share 10.5 pence, down 6% due to the higher rate of corporation tax

· Statutory profit before tax of £275 million, down 27%, predominantly reflecting non-cash movements and one-off income from legal settlements in the prior year. Statutory earnings per share 6.6 pence, down 46%

· Retail free cashflow of £520 million, driven by strong grocery sales growth and seasonal H1 benefit from timing of payments

· Net debt including leases £701 million lower at £5,643 million, reflecting strong cash generation and a £1,042 million reduction in lease debt as a result of the Highbury & Dragon property transaction. Net debt excluding leases increased by £375 million to £231 million, reflecting the £670 million cash costs of funding the consideration for the transaction

· Interim dividend of 3.9 pence, unchanged year-on-year in line with our policy of paying 30% of the prior full year dividend per share

https://www.investegate.co.uk/announcem ... rt/7855020

Ian (No holding).

[Arborbridge]

SP up 4.55% on this. I'm not sure the half year was that great!

[idpickering]

Third Quarter Trading Statement for the 16 weeks to 6 January 2024.

Trading Highlights

More customers are doing more of their grocery shopping at Sainsbury's. We have outperformed the market every week of this financial year and delivered volume growth ahead of the market for a fourth consecutive Christmas. This reflects consistently great value and service, a positive customer response to our first Nectar Prices Christmas and customers trading up to Taste the Difference. While Argos outperformed a weak and highly promotional general merchandise market, sales declined ahead of Christmas against an exceptionally strong performance last year.



· Q3 Grocery sales up 9.3%, Christmas Grocery sales up 8.6%, with stronger volume growth offsetting lower inflation

· Q3 General Merchandise sales down (0.6)%, up 1.5% excluding impact of Argos closure in the Republic of Ireland

· Christmas General Merchandise sales down (3.7)%, (1.3)% excluding impact of Argos closure in the Republic of Ireland, reflecting significant benefit to sales last year from the postal strike and strong demand for energy saving products

· Q3 Clothing sales down (1.7%), Christmas Clothing sales (6.0)%

· Q3 retail (exc. fuel) sales up 6.5%. Like-for-like sales growth up 7.4%. Inc. fuel retail sales up 4.4% with fuel sales down (7.2)%

· Outlook: We continue to expect underlying profit before tax in 2023/24 of between £670 million and £700 million, with a strong Grocery performance offsetting weaker General Merchandise and Financial Services contributions. We continue to expect to generate retail free cash flow in 2023/24 of at least £600 million

https://www.investegate.co.uk/announcem ... nt/7982298

Ian (No holding).

[idpickering]

Strategic review of Financial Services division

Ahead of our February 7th Strategy update, we have completed a strategic review of our Financial Services division.

In order to improve the financial services offered to our customers and consistent with the clear focus on our retail businesses, we are exploring a number of options.

Financial services products that we continue to offer in the future will be provided by dedicated financial services providers through a distributed model. We already do this successfully with our insurance products.

Over time this will result in a phased withdrawal from our core Banking business.

There will be no immediate changes to the products or services that we provide to customers as a result of this decision.

Jim Brown will retire from his role as CEO of Sainsbury's Bank and we have appointed Robert Mulhall as his successor. Robert is an experienced retail banking leader with a strong track record of delivering successful transformation. Until 2022 Robert was the CEO of Allied Irish Bank's (AIB) UK division, having previously led AIB's Irish retail banking division. Since 2022, Robert has led the global financial services consulting business of VISION Consulting, focused on business transformation. Robert will take up the role as CEO of Sainsbury's Bank at the end of March after a period of handover. Robert's appointment is subject to regulatory approval.

https://www.investegate.co.uk/announcem ... on/7994711

Ian.

[idpickering]

Sainsbury’s Strategy Update

Key Highlights

Our "Next Level Sainsbury's" strategy builds on the success of the Food First strategy we launched in November 2020. This put food back at the heart of Sainsbury's, reset our competitive position and has created a strong financial platform from which we will grow, invest in further strengthening the business and deliver enhanced returns to shareholders. Our "Next Level Sainsbury's" strategy will:

Deliver further grocery market volume share gains by bringing more of Sainsbury's food range to more customers, becoming the first choice for food for more people, continuing to attract more bigger basket primary shoppers

Continue to build a world-leading Nectar loyalty platform offering personalised, rewarding and integrated loyalty and market-leading retail media capabilities

Build on Argos's strengths in convenience and value, growing frequency and spend through improved range and relevance while also delivering further operating model efficiencies

Invest in our capabilities across technology and infrastructure and deliver another £1 billion of structural cost reduction, underpinning these objectives and driving growth and efficiencies

https://www.investegate.co.uk/announcem ... te/8025304

Ian (No holding).

[idpickering]

Final Results

The strength of our grocery performance over the last year, with record market share gains1 and volume growth accelerating every quarter, is a clear demonstration of the success of our Food First strategy. Over the last three years this strategy has enabled us to make consistent and balanced choices for customers, colleagues, suppliers and shareholders. Customers continue to respond to the investments we have made in value, innovation, availability and service and are doing more of their grocery shopping with Sainsbury's2. Higher grocery volumes are feeding through to better profit leverage. This has driven profit and free cash flow results above the top end of our guidance range despite lower Financial Services profits and softer General Merchandise trading.

We are building on this momentum and the strength of our position in the UK grocery market through our Next Level Sainsbury's strategy, announced in February. We expect to continue to outperform the grocery market and for this volume advantage to drive strong profit leverage in the year ahead, with retail underlying operating profit of between £1,010 million and £1,060 million, growth of between five per cent and ten per cent. Reflecting the strength of our balance sheet and our commitment to deliver enhanced shareholder returns, we announced in February that we will buy back £200 million of shares in 2024/25. We will commence the buyback programme tomorrow.

And later;

The proposed final dividend was approved by the Board on 24 April 2024 and is subject to shareholders' approval at the Annual General Meeting. If approved, it will be paid on 12 July 2024 to shareholders on the register as at 7 June 2024. No amount for the proposed final dividend has been recognised at the balance sheet date.

https://www.investegate.co.uk/announcem ... ts/8155664

Ian (No holding).

[daveh]

Final dividend of 9.2p payable 12July ex and record dates 6 and 7 June. Which is the same as last years final.

[idpickering]

Commencement of Share Buyback Programme

Further to the announcement of 7 February 2024, J Sainsbury plc is pleased to announce the commencement of a share buyback programme of up to £200 million, to be completed by the end of this financial year, 1 March 2025.

The first tranche of the share buyback programme (the "Programme") will be for a maximum aggregate market value equivalent to £150 million which will be bought back in the form of the Company's ordinary shares. The Programme will commence on 26 April 2024 and will end on or before 1 November 2024. The sole purpose of the Programme is to reduce the Company's share capital. The Company intends to cancel the repurchased ordinary shares.

The Company has entered into non-discretionary instructions with UBS AG London Branch to conduct the Programme on its behalf and to make trading decisions under the Programme independently of the Company.

https://www.investegate.co.uk/announcem ... me/8158252

Ian (No holding).