Sainsbury's announce small rise in profits

Sainsbury's has reported a small rise in half-year profits to post an £118m profit, from £117m in the same period in 2004.

Sainbury's Chairman Philip Hampton said that he was pleased with the progress made in the first half of the year.

Mr Hampton said: "While it is still early days in our recovery programme, we are on track and the management team is focused on delivering the plans outlined in October 2004."

Sainsbury reported that total sales had risen by 5.6% to 8,815 million and that like-for-like sales, excluding petrol, were up 2.1%.

Commenting on the figures, Sainsbury's Chief Executive Justin King said the company had "made good steps forward."

He said: "This is a clear indication that customers are seeing improvements and increasing spend with us. Customer satisfaction has improved and we now have 15 million customers a week. Customers are now able to complete more of their weekly shop and are shopping more frequently with us again. This is key to reaching our sales growth target of £2.5 billion."

But he added: "While the customer experience is much improved we still need to work on achieving consistency across all our stores, and at an acceptable cost. Our focus is on maintaining and driving further improvement. We still have a lot of work to do behind the scenes to ensure that we remain on track but the response to our initial progress endorses our belief in the attraction of Sainsbury’s brand."

However, the group's banking division made an underlying operating loss of £5 million in the first half-year due to investment in growth and increased provision for bad and doubtful debt.

Sainsbury’s said that while it believed the supermarket banking model was "robust" it did not anticipate that the three-year profit target of £90m was "achievable."

Sainsbury announced an interim dividend of 2.15 pence per share.

(SP)