Sainsbury to expand chain in the North

SUPERMARKET group Sainsbury confirmed plans to develop a major presence in the Northern Ireland food retailing market following the "extremely successful" opening of maiden stores in Ballymena and south Belfast.

The chairman, Mr David Sainsbury, said the two stores "are trading well above expectations. We are building up the best store portfolio in Northern Ireland and plan to open further stores this year", he said. Proposals for a Coleraine store are awaiting a decision from Lord Dubs, the newly appointed Department of Environment minister looking after its Northern Ireland portfolio.

Plans for a Derry store are being reviewed by a planning committee and a planning application has been submitted for a store in Newry.

Confirmation of the Northern Ireland store opening programme came alongside the group's 1996-97 figures detailing a £113 million - collapse in pre tax profit to £651 million on sales up 6 per cent at £14.31 billion.

The group's new status as an "ex growth" stock was reflected in a 16.9 per cent fall in earnings per share to 23.1p providing less than twice cover for dividend payments up only 1.7 per cent at 12.3p per share.

At £651 million, the profit outcome is just short of projections of £640-£650 million made by analysts following the board's shock profit warning issued in January. Nearly £1 billion was wiped off Sainsbury's stock market value in the 13 per cent share price fall to 341p after the profit warning. But the shares perked up a bit yesterday, firming 10p to 356p on recovery hopes.

Like for like sales excluding sales from new selling space since early March are up 4.2 per cent compared with 3.7 per cent in the second half of the 1996-97 period and 2.7 per cent in the first half. Although this is still below the cracking pace set by arch rivals Tesco, the trend is now in the right direction. Also, operating margins have stabilised after slipping from 7.3 to 6.2 per cent over the past year.