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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  J Sainsbury plc    SBRY   GB00B019KW72

J SAINSBURY PLC

(SBRY)
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Revamp by new Sainsbury's boss threatens 3,500 jobs

11/05/2020 | 06:49am EST
People wait outside a Sainsbury's the night before a local lockdown amidst the spread of the coronavirus disease (COVID-19) in Manchester

LONDON (Reuters) - Up to 3,500 jobs are at risk at British supermarket group Sainsbury's as its new CEO embarks on a restructuring drive that will close 420 Argos shops and all in-store meat, fish and deli counters.

Detailing his strategy for Britain's second biggest grocer, Simon Roberts, who succeeded Mike Coupe in June, said on Thursday he would refocus Sainsbury's on its core food business.

He plans to lower prices, treble the number of new products launched each year, expand online services to meet growing demand and open 110 new convenience stores over three years.

"We will put food back at the heart of Sainsbury's," he said.

"Our other brands - Argos, Habitat, Tu, Nectar and Sainsbury's Bank - must deliver for their customers and for our shareholders in their own right."

He said the bank could be sold, confirming to reporters "expressions of interest" have been received.

He denied he was taking the 151-year old Sainsbury's downmarket by closing in-store counters.

"We've had a really good look at how customers are shopping for food today and the reality on the counters is that they have been in long term decline for quite a period of time," he told reporters.

He is targeting an Argos general merchandise store or collection point in every Sainsbury's supermarket, reducing the Argos standalone store estate to around 100 by March 2024.

Roberts said his plan would boost earnings, forecasting pretax profit in the year to March 2022 ahead of that reported in the year to March 2020 - a year not impacted by COVID-19.

Sainsbury's said it aimed to find alternative roles for as many affected employees as possible.

The job cuts add to a grim toll in the retail sector. On Wednesday John Lewis axed 1,500.

IN THE RED

Sainsbury's reported a pretax loss of 137 million pounds for the 28 weeks to Sept. 19, reflecting a 438 million pounds charge due to the Argos closures and other strategic and market changes.

Its shares were down 4.7% at 1108 GMT, extending 2020 losses to 13.5%.

Underlying pretax profit was 301 million pounds - ahead of analysts' average forecast of 275 million and the 238 million made in the same period last year, reflecting a 6.9% increase in like-for-like retail sales.

COVID-19 related costs of about 290 million pounds were partially offset by 230 million pounds of business rates relief.

Roberts said Sainsbury's was justified in taking the relief because of the huge costs incurred in "feeding the nation" during the crisis.

Full year 2020-21 underlying pretax profit was forecast to be at least 5% higher than 2019-20's 586 million pounds, reflecting stronger than expected sales.

Sainsbury's is also paying dividends again - declaring a 7.3 pence special dividend in lieu of a final dividend for 2019-20, and an interim payment of 3.2 pence.

(Reporting by James Davey, Editing by Guy Faulconbridge and Mark Potter)

By James Davey


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
FEEDER CATTLE?FUTURES (GF) - CMG (ELECTRONIC)/C1 0.00% 135.625 End-of-day quote.-1.73%
FLAGSTAR BANCORP, INC. -5.08% 44.64 Delayed Quote.15.38%
J SAINSBURY PLC 0.64% 252.9 Delayed Quote.11.44%
LIVE CATTLE (LE) - CMG (ELECTRONIC)/C1 -0.04% 116.4 End-of-day quote.3.17%
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Financials
Sales 2021 29 131 M 39 875 M 39 875 M
Net income 2021 -323 M -442 M -442 M
Net Debt 2021 6 629 M 9 074 M 9 074 M
P/E ratio 2021 -20,5x
Yield 2021 5,32%
Capitalization 5 607 M 7 684 M 7 675 M
EV / Sales 2021 0,42x
EV / Sales 2022 0,41x
Nbr of Employees 111 900
Free-Float 96,2%
Chart J SAINSBURY PLC
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J Sainsbury plc Technical Analysis Chart | SBRY | GB00B019KW72 | MarketScreener
Technical analysis trends J SAINSBURY PLC
Short TermMid-TermLong Term
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 241,53 GBX
Last Close Price 2,53 GBX
Spread / Highest target 10 774%
Spread / Average Target 9 450%
Spread / Lowest Target 7 017%
EPS Revisions
Managers and Directors
NameTitle
Simon John Roberts Chief Executive Officer & Director
Martin A. Scicluna Chairman
Kevin O'Byrne Chief Financial Officer & Director
Richard Philip Newsome Chief Technology Officer
Phil Jordan Group Chief Information Officer
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