J Sainsbury Plc has released its preliminary results for the 52 weeks ended 2 March 2024, showcasing a robust performance in the grocery sector. The company's "Food First" strategy has led to record market share gains and accelerating volume growth, driving profit and free cash flow results above the top end of the guidance range. Despite softer General Merchandise trading, the retail underlying operating profit for 2023/24 stood at £966 million, up 4.3% from the previous year.
The company's Next Level Sainsbury's strategy, announced in February, aims to build on this momentum and expects to outperform the grocery market, driving strong profit leverage in the year ahead. J Sainsbury Plc also plans to buy back £200 million of shares in 2024/25, commencing the buyback program imminently.
In terms of financial performance, the group sales including VAT were £36,337m, a 3.4% increase from the previous year. Retail sales, excluding fuel, saw a significant growth of 6.8%, with grocery sales up by 9.4%. However, General Merchandise sales were weaker, down by 0.5% including the impact of the closure of Argos in the Republic of Ireland. The company reported a net debt of £5,554 million, reflecting strong cash generation and a reduction as a result of the Highbury and Dragon property transaction.
Looking ahead to 2024/25, J Sainsbury Plc is confident of delivering strong profit growth, expecting to continue to grow grocery volumes ahead of the market and generate retail underlying operating profit of between £1,010 million and £1,060 million, representing a growth of between five per cent and ten per cent. The company also anticipates a lower profit contribution from Financial Services this year as it prepares to change the scope of the business.
Simon Roberts, Chief Executive of J Sainsbury plc, expressed confidence in the company's performance, stating, "We have the best combination of value and quality in the market and that's winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions."