Coupe: making progress
Round-up: Argos boosts Sainsbury’s; Balfour Beatty
Sainsbury: Fourth Quarter figures show a strong performance from recently-acquired Argos, where like-for-like sales increased 4.3%, helping to prop up a slight fall in underlying group sales in its core supermarkets business.
Like-for-like retail sales – which strip out stores which have been open for less than a year – were down by 0.5%, excluding fuel.
Mike Coupe, group chief executive, said: “We are pleased with this performance and are making good progress against our key priorities.
“Argos delivered another strong quarter of growth, with like-for-like sales up by over 4%. We are investing in digital to deliver excellent service and availability, with enhancements to the Argos website and app.
“The market remains very competitive and the impact of cost price pressures remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”
John Ibbotson, director of the retail consultancy Retail Vision said:
“Argos is proving a guardian angel rather than an albatross for Sainsbury’s. While the acquisition of the catalogue brand initially swallowed time and resources, it is now paying dividends for Sainsbury’s.
“Of key concern for Sainsbury’s will be the 0.5% fall in like-for-like retail sales and the 4% slump in general merchandise sales, which more than cancel out any reassurance provided by the brisk performance of its clothing brand Tu.
“Despite enjoying a better than expected Christmas, Sainsbury’s continues to lose market share – and the brand’s much-vaunted turnaround plan has been slower to show results than those of its rivals.
“Its core grocery business remains adrift as Tesco and Morrisons staunch their losses and fight back with aggressive price cuts and fundamental structural reforms.
“In this context, Argos could emerge as a ‘get out of jail’ card for Sainsbury’s. With strong sales growth, albeit at the expense of margin, Argos offers Sainsbury’s the chance to build a long-term and genuinely multi-channel strategy.
“Sainsbury’s is playing a longer game than some of its rivals by positioning itself squarely for the internet age. Future-proofing itself in this way could pay big dividends down the line.
“It is by no means out of the woods yet, but having a plan that’s different to its competitors – and sticking to it – can count for a lot in the current environment.”
Balfour Beatty: the engineering giant has returned to profit after two years of losses.
The company has been involved in high profile projects such as London’s Crossrail and the transformation of the former Olympic Stadium into a football ground.
It also reported strong growth in its US construction division.
The company reported an underlying profit from continuing operations before one-off items of £60 million pounds for the year, against a loss of £123m a year earlier.
The board is recommending a final dividend of 1.8p per share.
Chief executive Leo Quinn said the company’s leadership, processes and controls had been upgraded.