Sainsbury′s: sales up, stocks down

Despite the "distraction" of its €14.9 billion takeover saga, Sainsbury's banked €325.3 million in half-year profits, marginally better than analyst expectations. The company said that it was ahead of its three-year recovery plan with €3.37 billion growth in sales since March 2005.

Qatari investment fund Delta Two pulled its potential multi-billion offer earlier this month, less than a year after a private equity takeover attempt also fell by the wayside, disappointing investors. The stock has taken a dive in value over the last few days, after the failed takeover attempt.

Chief executive Justin King said: "Everyone at Sainsbury's has been focused on serving customers better despite the potential distraction of corporate activity." The grocery group added that its upmarket product range, Taste the Difference, had seen its highest sales week outside the key Christmas and Easter periods amid a "taste festival" running throughout September and October. Its non-food offering is also enjoying further growth - at more than double the rate of food growth.

Sainsbury's also announced it was spinning off three of its property sites with freeholds worth €159 million into a joint venture with Land Securities. Major shareholder Robert Tchenguiz, who owns 10% of the group, has been leading calls for the group to separate its property assets and return money to shareholders.