Shares in J Sainsbury (LON:SBRY) have climbed higher in London this Wednesday as the company cheered up investors with a rise in underlying profit and lower net debt. The update marks a boost for the blue-chip grocer, which came under pressure last week as the Competition and Markets Authority (CMA) blocked its proposed deal with Walmart’s Asda which would have created Britain’s biggest supermarket.
As of 08:38 BST, Sainsbury’s share price had gained 5.89 percent to 235.60p. The stock is outperforming the broader UK market, with the benchmark index currently standing 0.29 percent higher at 7,440.08 points.
Sainsbury’s posts full-year results
Sainsbury’s announced in a statement this morning that its underlying profits had climbed 7.8 percent to £635 million in the 2018/19 financial year, while sales had inched 2.1 percent higher to £32.4 billion. The group further cheered up investors with news that it had reduced its net debt by £222 million, ahead of target. The blue-chip grocer’s profit after tax, however, slumped to £219 million, from £309 million in the prior-year period, while the failed merger with Asda had cost the company £46 million.
Mike Coupe ‘sticking’ to company
“I am pleased to report that we have increased profits, reduced net debt and increased the dividend,” Sainsbury’s chief executive Mike Coupe commented in the statement, adding that going forward, the company would “increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year”.
He further told the BBC’s Today programme that he would be ‘sticking to the company’ when questioned about whether he had been asked to step down after the failed merger.
“Well, we draw a line under the past… The authorities blocked the deal, but we think our business is adapting to the changing world of retail, and we will carry on investing in our business,” he pointed out, as quoted by the BBC.