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Sainsbury’s Xmas record, Taylor Wimpey upbeat

Sainsbury's Local

Sainsbury’s had a record Christmas week (photo by Terry Murden)

Sainsbury’s reported a record Christmas trading week and said third quarter sales were up 1.2% (excl. fuel) with like-for-like sales up 1.1% (excl. fuel)

Grocery sales over the 15 weeks to 6 January grew 2.3% with groceries online and convenience up 8.2% and 7.3% respectively

General merchandise and clothing outperformed the market in challenging conditions

Full year underlying profit before tax is now expected to be moderately ahead of published consensus.

Mike Coupe, group chief executive, said: “We’re pleased with our performance across the group this quarter.

“We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos Fast Track delivery and collection. Online accounted for 20% of the Group’s sales during the quarter.”

With reference to current concerns over waste he said the stores had their lowest level of waste ever at Christmas.

“Friday 22nd was our biggest sales day for stores and we also delivered an online grocery order to customers every second. 

“General Merchandise and Clothing grew market share in a challenging market. Argos stores in Sainsbury’s supermarkets performed particularly well and Argos saw record sales across the Black Friday period.”

The company expects £80m-£85m of EBITDA (£72m-£77m EBIT) synergies from the Argos acquisition by March 2018, ahead of previous guidance of £65m EBITDA (£58m EBIT). As a consequence it expects 2017/18 underlying profit to be moderately ahead of published consensus.

Taylor Wimpey: CEO Pete Redfern, said the housing and construction group achieved a strong financial and operational performance in 2017 and is continuing to deliver against its strategy.

“Despite wider macroeconomic uncertainty, housing market fundamentals remain solid and our trading performance has been good. We continue to increase housing completions, achieving 5% growth during the year, and ended 2017 with a good forward order book.

“We go into 2018 with positive momentum and expect to achieve further progress against our medium term targets. Our focused strategy of managing the business through the cycle, while also driving further operational improvements, will enable us to continue to deliver long term value for shareholders.” 

In 2017 total home completions increased by 5% to 14,541, including joint ventures (2016: 13,881). During 2017 we delivered 2,809 affordable homes (2016: 2,690), including joint ventures, equating to 19% of total completions (2016: 19%).

The group ended the year in a robust position with net cash of c.£512 million (31 December 2016: £365 million net cash), after the payment of £450 million of dividends to shareholders in 2017 (2016: £356 million). 

The company expects to report FY 2017 results in line with expectations, and expects to achieve further growth and performance improvement in 2018. 

For FY 2017 the Group will deliver an improved operating profit margin of c.21.2% (2016: 20.8%) and a return on net operating assets of over 32% (2016: 30.7%). It will pay a total dividend in FY 2018 of c.£500 million.

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