Sainsibury

SUPERMARKETS group Sainsbury's chief executive Justin King today painted a brighter future for the ailing chain despite a plunge in full-year profits, promising its recovery remains on track.

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Stock: Sainsbury's CHECKING OUT: Sainsbury says it can still do better

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After hefty exceptional charges, operating profits crashed from £675m to £254m as total sales of continuing operations rose 5.5% to £16.4bn.

At the pre-tax level, profits were just £15m, down from £610m last time. As previously warned, the dividend total for the year to 26 March is halved to 7.8p a share as the cash is poured back into price cuts.

There was no update on trading for the first few weeks of the new financial year, but the group highlighted a 1.7% increase in underlying sales over the final quarter - the first rise in quarterly sales in more than two years. The decline for the year was 0.4%.

King, who has been in the hot seat for 14 months, again stressed it was still 'early days' in the recovery programme: 'We are very pleased with the progress we have made - and our customers are noticing,' he said. 'They have seen a difference but we could still do better. It's not job done.'

Sainsbury's performance, which compares with the record £2bn profit produced by rival Tesco, was well received in the City. Describing them as 'a solid set of numbers' analyst Iain McDonald at Numis said the group had probably managed to maintain like-for-like sales growth at near 1.7% since the year-end. He raised his current-year profits forecast from £248m to £300m.

As King pursued his sales-led recovery strategy, price...