ANALYST VIEWS HOW IS SAINSBURY’S FARING IN A COMPETITIVE ENVIRONMENT?
JAMES GRZINIC JEFFERIES
Sainsbury’s full-year results were nearly two per cent better than expected…Crucially, the group has confirmed that it expects core capex to decline from the 2011-12 peak of £1.24bn to £1bn in 2012-13. We expect yield merits to be better underpinned given better cashflow dynamics, but Morrisons and Tesco are a 20 per cent cheaper way of buying into an improving demand/space balance in the UK.
DARREN SHIRLEY SHORE CAPITAL
Sainsbury’s has recorded a sound year of financial progress set against a year of demonstrable pressure on the UK consumer and a series of profit warnings and downgrades in the sector from its quoted competitors…In far from ideal economic circumstances Sainsbury continues to drive out a robust performance, characterised by like-for-like sales amongst the best of the Big Four British players.
FREDDIE GEORGE SEYMOUR PIERCE
We are provisionally retaining our 2013 pre-tax profit forecast of £770m. Sainsbury’s should see some benefit from the Diamond Jubilee and the Olympics. There is now minimal operational gearing in the earnings with limited potential for like-for-like growth in a competitive market while the company has confirmed it is reining back on its expansion plans.