LONDON (AFP) - J Sainsbury reported its first ever pretax loss after investing heavily in restructuring aimed at arresting a decline in its fortunes.
The group made a pretax loss of 39 million pounds (56 million euros, 72 million dollars) for the 28 weeks to October, against a profit of 323 million in the same period of 2003.
Exceptional costs relating to the company's business review, the sale of Shaw's Supermarkets in the United States and the return of capital to shareholders significantly affected the results for the period.
Before exceptional items and certain financial items, half-year pretax profits fell to 131 million pounds from 366 million a year earlier, in line with market expectations, which have been slashed after three profit-warnings from the retailer this year.
Net profit fell to 24 million pounds from 206 million.
Sainsbury is battling to reverse a decade-long decline in market share during which time the former market leader has been pushed into third place by Tesco and Asda, owned by US retail giant Wal-Mart Stores Inc.
Last month Sainsbury said it would take 550 million pounds of one-off charges this financial year after an ill-fated decision to sink three billion pounds into supply-chain and information technology improvements.
Following a lengthy business review instigated by chief executive Justin King, the grocer is investing up to 400 million pounds over the next three years in improving its "customer offer", including lower prices.
"We are clear on the actions we need to take to make Sainsbury's great again," King said in a statement accompanying the results.
"We are now beginning the implementation of the plans arising from the business review to rebuild a sustainable sales led recovery."
The retailer reiterated its forecast that underlying profit before tax for the second half is not expected to be significantly different from the figure for the first half.
In the first half, total sales at Sainsbury supermarkets rose by 3.5 percent to 8.35 billion pounds.
11/17/2004 - 14:13 GMT - AFP