FINANCE: Supermarket chain Sainsbury’s has taken a charge of £287m after halting a number of property plans.
The retailer said this morning: “As part of adapting to our changing customer needs, we have reassessed our store pipeline and the potential to achieve an appropriate return on capital, which resulted in a decision that some sites will no longer be developed, for which a charge of £287m has been recognised.”
The announcement comes after the firm last month pulled out of a plan to demolish and rebuild its store in South Ruislip, north-west London, which would have doubled it in size.
In its interim statement for the 28 weeks to 27 September, the group added that a charge of £341m had also been recognised in relation to unprofitable and marginally profitable trading stores.
However ,Sainsbury’s said it had not abandoned property expansion plans. Instead it is poised to unlock “significant property profits” from more than 1m sq ft of planned new space.
The retailer said it was on track to open 500,000 sq ft of space in each of the next two years, followed by 350,000 sq ft in 2017-18. Part of the new space will be within mixed-use developments.
Meanwhile the group’s underlying share of profit from a jv with British Land stood at £6m, and £2m from a partnership with Land Securities.
Sainsbury’s recently opened its first Netto UK shop in partnership with Dansk Supermarked, and plans to open 15 stores by the end of 2015.
Group revenue during the period was largely static with £13.9m generated, a slight dip on the same period in 2013, while underlying pretax profit dropped to £375m from £400m.
