Sainsbury holds profit steady as Brexit pressures mount

London - UK supermarket chain J Sainsbury showed it’s coping with a Brexit-fueled squeeze on industry profitability as it reported annual profit that met analyst estimates.

Underlying pretax profit fell 1% to £581m in the 12 months ended March 11, the London-based company said in a statement on Wednesday. That compared with the £580m average estimate of nine analysts surveyed by Bloomberg. General merchandise chain Argos contributed £77m to that figure.

“Our food business remains resilient in a challenging market and we continue to innovate in quality and to invest in price,” chief executive officer Mike Coupe said in the statement.

Sainsbury’s profit will reassure investors that the company is holding its own in a market where sterling’s drop after last year’s vote to leave the European Union has put a squeeze on profitability.

UK grocers are seeking to balance passing on some of their increased import costs in the form of higher prices without sending shoppers flocking to discounters Aldi and Lidl.

Sainsbury said the impact of the pressure on its costs remains uncertain. The company proposed a final dividend of 6.6 pence, missing Bloomberg’s forecast of 7.3 pence a share.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.13
-0.0%
Rand - Pound
19.87
-0.1%
Rand - Euro
17.11
-0.4%
Rand - Aus dollar
10.93
-0.3%
Rand - Yen
0.13
-0.3%
Gold
1,833.68
+0.4%
Silver
27.15
+0.2%
Palladium
2,902.49
+1.3%
Platinum
1,226.94
+1.4%
Brent Crude
67.05
-3.3%
Top 40
60,387
+0.3%
All Share
66,411
+0.4%
Resource 10
68,899
-0.8%
Industrial 25
83,232
+0.9%
Financial 15
12,681
+1.5%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 1445 votes
No, I did not.
52% - 3610 votes
My landlord refused
27% - 1916 votes
Vote