Shares in J Sainsbury (LON:SBRY) have fallen into the red this morning, as the blue-chip grocer published its final results. The update follows the group’s merger deal with Walmart’s Asda earlier this week, which is set to create Britain’s biggest supermarket, surpassing current market leader Tesco (LON:TSCO).
As of 08:42 BST, Sainsbury’s share price had given up 1.26 percent to 310.60p. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.59 percent higher at 7,564.37 points.
Sainsbury’s posts results
Sainsbury’s announced in a statement this morning that its underlying profit before tax had come in at £589 million, marking a 1.4-percent rise year-on-year. The group’s underlying basic earnings per share, however, dipped 6.4 percent to 20.4p, primarily reflecting the impact of a consolidation of the additional shares issued at the acquisition of Home Retail Group.
Going forward, the blue-chip supermarket further noted that its profit expectations for the financial 2018/19 year were in line with current market consensus of £629 million. Sainsbury’s, however, cautioned that the market remained competitive.
Latest Kantar data
Today’s update follows the latest Kantar Worldpanel data yesterday, which showed a market share of 15.9 percent and 15.5 percent for Sainsbury’s and Asda respectively, giving the proposed combined entity a potential share of 31.4 percent.
“A merger between Sainsbury’s and Asda would transform the traditional landscape placing nearly a third of market share in the hands of the joint supermarket giant, though the march of the discounters – and any enforced store closures – could impact this figure,” Fraser McKevitt, Head of Retail and Consumer Insight, commented in a statement, adding that the two supermarkets appeal to different customer bases, with Asda achieving nearly two-thirds of its sales outside London and the south east of England in contrast to Sainsbury’s, which registers 59 percent of its sales in those two areas.