Sainsbury(J) PLC SBRY Half Yearly Report

  Sainsbury(J) PLC (SBRY) - Half Yearly Report

RNS Number : 0520R
Sainsbury(J) PLC
14 November 2012




14 November 2012

            Interim results for the 28 weeks to 29 September 2012

                                      

         Good sales and profit performance; outperforming the market



Financial summary

· Total sales (inc  VAT, inc fuel)  up 4.0 per  cent to £13,365  million 
(2011/12: £12,848 million)

· Total sales (inc VAT, ex fuel) up 4.1 per cent

· Like-for-like sales (inc VAT, ex fuel) up 1.7 per cent

· Underlying  profit before  tax^(1)  up 5.4  per  cent to  £373  million 
(2011/12: £354 million)

· Underlying basic earnings per share^(2)  up 9.4 per cent to 15.2  pence 
(2011/12: 13.9 pence)

· Return on  capital employed^(3)  of 10.9  per cent  (2011/12: 10.9  per 
cent)

· Interim dividend of 4.8 pence per share, up 6.7 per cent (2011/12:  4.5 
pence per share)



Statutory

· Revenue (ex VAT, inc fuel) up 4.0 per cent to £12,160 million (2011/12:
£11,693 million)

· Profit  before tax  up 2.5  per  cent to  £405 million  (2011/12:  £395 
million)

· Basic earnings per share up 4.9  per cent to 17.0 pence (2011/12:  16.2 
pence)



Operating highlights

· Outperformed the market, increasing market share to 16.7 per  cent^(4), 
the highest  for  nearly  a  decade, completing  31  consecutive  quarters  of 
like-for-like sales growth

· Nearly 250 million Brand Match coupons printed since its launch a  year 
ago, with 'Cheaper Here Today' coupons issued over 50 per cent of the time

· Celebrated ten  year partnership  with Nectar, a  continuing source  of 
customer insight and loyalty

· Operational cost  savings of around  £60 million, on  track for  around 
£100 million for the full-year

· Underlying operating  margin unchanged  (up 1 basis  point at  constant 
fuel prices)

· Five awards at the Retail Industry Awards 2012 including Supermarket of
the Year for the fifth time in  seven years and Convenience Chain of the  Year 
for the third year in a row

· World sector leader for food  retailers for the sixth consecutive  year 
in the Dow Jones Sustainability Index



Strategy highlights

·  Great  food:  Continued  investment  and  growth  in  own-brand,  with 
penetration increasing at a faster rate than any other major supermarket.  We 
are 85 per cent of  the way through the re-launch  of our core by  Sainsbury's 
range which will see 6,500 new or improved products introduced by April 2013

· Compelling  general merchandise  and clothing:  Goes from  strength  to 
strength, currently  growing three  times faster  than our  food business  and 
gaining market share

· Complementary  channels  and  services:  Online  continues  to  perform 
strongly, growing at over 20 per cent, with grocery orders regularly exceeding
165,000 a week. Our  convenience business is expanding  by one to two  stores 
each week and is enjoying almost 20 per cent year-on-year growth.  Sainsbury's 
Bank continues  to make  strong  progress, with  our  share of  joint  venture 
post-tax profit up from £7 million to £12 million

· Developing new business: Announced  I^2C, a joint venture company  with 
Aimia, owners of Nectar. Launched our  MP3 music download service; acquired  a 
majority stake in Anobii e-book platform; announced a video on demand  service 
powered by Rovi

· Growing  space and  creating property  value: During  the half-year  we 
opened 351,000 sq ft  of space, comprising  five supermarkets, 49  convenience 
stores and  three  extensions.  Property  profits  from  sale  and  leaseback 
activity were £48 million



David Tyler, Chairman, said: "Sainsbury's has made a strong start to the year,
delivering  continued  outperformance  in  what  has  remained  a  challenging 
market. We have grown our underlying basic earnings per share to 15.2  pence, 
return on capital employed remains unchanged at 10.9 per cent and our  interim 
dividend is 4.8 pence per share, up 6.7 per cent."



Justin King, Chief  Executive said: "Our  share of the  grocery market is  the 
highest for almost a decade at 16.7 per cent, with 31 consecutive quarters  of 
like-for-like sales growth. We  continue to succeed  by remaining focused  on 
delivering  quality  products,  best-in-class   service  and  value  for   our 
customers, without compromise.  Brand Match, Nectar  and our highly  targeted 
coupon-at-till all reinforce our price competiveness.



Whilst  the  wider  economic  situation  remains  challenging,  we  are   well 
positioned to  help  our customers  Live  Well For  Less.  Our  long-standing 
consistent  strategy,   combined  with   our  customer   insight  and   strong 
value-driven culture, will continue to  deliver for customers, colleagues  and 
shareholders."

Notes:



1. Underlying profit before  tax: Profit before tax  before any profit  or 
loss on the disposal of properties, investment property fair value  movements, 
financing fair value movements, IAS  19 pension financing element and  one-off 
items that are material and infrequent in nature.

2.  Underlying  basic  earnings  per  share:  Underlying  profit,  net  of 
attributable taxation,  divided by  the weighted  average number  of  ordinary 
shares in issue during  the period, excluding those  held by the ESOP  trusts, 
which are treated as cancelled.

3. Return on capital employed: Underlying profit before interest and  tax, 
divided by the  average of opening  and closing capital  employed (net  assets 
before net debt).

4. Sainsbury's  market share  grew to  16.7 per  cent from  16.6 per  cent 
(source: Kantar for the 52 weeks ended 30 September 2012).

5. Certain  statements  made  in  this  announcement  are  forward-looking 
statements. Such statements are based on current expectations and are  subject 
to a  number of  risks and  uncertainties that  could cause  actual events  or 
results to  differ  materially from  any  expected future  events  or  results 
referred to in these  forward-looking statements. They appear  in a number  of 
places throughout  this  announcement  and include  statements  regarding  our 
intentions, beliefs  or  current  expectations  and  those  of  our  officers, 
directors and  employees  concerning, amongst  other  things, our  results  of 
operations, financial condition, liquidity, prospects, growth, strategies  and 
the  business  we  operate.  Unless  otherwise  required  by  applicable  law, 
regulation or  accounting standard,  we  do not  undertake any  obligation  to 
update or revise any  forward-looking statements, whether as  a result of  new 
information, future developments or otherwise.

6. Sainsbury's will report its 2012/13 Third Quarter Trading Statement  at 
07:00 (GMT) on 9 January 2013.



A results presentation for analysts and investors will be held at 09:45 on  14 
November 2012.



To view the slides of the results presentation and the webcast: We  recommend 
that you  register  for  this  event  in advance.  To  do  so,  please  visit 
www.j-sainsbury.co.uk and follow the on-screen instructions. To participate in
the live  event, please  go  to the  website  from 09:30  on  the day  of  the 
announcement, where there  will be  further instructions. An  archive of  the 
webcast will be available from 12:00.



To listen to  the results  presentation: You  may dial  in to  listen to  the 
results on  +44 (0)  208  996 3900,  pass code  264663.  A transcript  of  the 
presentation and an  archive recording of  this event will  be available  from 
15:00 on the day of the event at www.j-sainsbury.co.uk.





Enquiries:
                                    

Investor Relations                   Media
Adam Wilson Katsibas / Kellie Herman Alex Cole / Tara Hicks / Tom Parker
+44 (0) 20 7695 0080                 +44 (0) 20 7695 7295







Business Review



Trading and market overview

We have made a good start to the year, continuing to outperform the market, in
what has remained a challenging environment. Our share of the grocery  market 
is its highest for almost  a decade at 16.7 per  cent and we have achieved  31 
consecutive quarters of  like-for-like sales growth.  Total sales  (including 
VAT, excluding fuel) were up 4.1 per cent, with like-for-like sales up 1.7 per
cent. Careful control of  costs enabled us to  grow underlying profit  before 
tax by 5.4 per cent to £373 million.



We continue to succeed by  understanding what our customers want.  Delivering 
universal  appeal  to  help  them   Live  Well  For  Less.  Our   performance 
demonstrates that delivering quality and  value, with values, is a  compelling 
offer for customers.



Despite the unseasonal weather in the  half-year, with six bank holidays,  the 
Queen's Diamond Jubilee  and the  Olympic and  Paralympic Games,  we had  many 
opportunities to help our customers celebrate. We saw a continuation of savvy
shopping, with customers putting  on average one fewer  item in their  basket, 
although the impact of this trend is now annualising.



Through our  Brand  Match initiative,  which  has just  celebrated  its  first 
anniversary, we have the most comprehensive tool in the market to help  people 
appreciate our great value. Similarly  our longstanding ten year  partnership 
with Nectar enables  us to understand  our customers better  and provide  them 
with relevant offers.



Our  non-food,   convenience  and   online   businesses  continue   to   enjoy 
market-beating growth and gain market  share, while investment in these  areas 
is increasing customer loyalty.



We are well positioned to continue to grow and to achieve our vision of  being 
the most trusted retailer where people love to work and shop.



Greatfood

Great food remains at the  heart of what we do,  with our leadership in  fresh 
produce and our strong own-brand key differentiators.



Our  customers  have  high  expectations  about  the  quality,  integrity  and 
provenance of the fresh food they buy, with one in every five pounds spent  on 
fruit and  vegetables, spent  at  Sainsbury's. In  addition, our  fresh  food 
counters, now in 513 of our 576 supermarkets, are growing market share  faster 
than at  any other  major retailer.  Our colleagues'  expertise and  customer 
service is key to driving  sales and over 20,000  have received City &  Guilds 
accredited training in  our seven  food colleges,  covering bakery,  butchery, 
fishmonger and deli counter skills.



Own-brand investment goes from strength to strength and we are seeing tangible
results. Our own-brand  penetration is increasing  at a faster  rate than  any 
other major supermarket and we continue  to invest in the breadth and  quality 
of our ranges. We are now 85 per cent of the way through the re-launch of our
core by  Sainsbury's range,  which will  see 6,500  new or  improved  products 
introduced by April 2013. Sales of  by Sainsbury's products are increasing  at 
the strongest  rate  in  recent years  and  it  is the  fastest  growing  core 
own-brand range in the UK.  It was named Own Label  Range of the Year at  the 
Grocer Gold Awards in June.



Our Taste the Difference range  grew by nearly ten  per cent and continues  to 
outperform the premium  tier market. Over  half our customers  buy Taste  the 
Difference, with over 60 per cent of  them also buying into our basics  range, 
which is the second biggest selling supermarket value brand.



In September, we  introduced a  new breed of  free range,  slow grown  Norfolk 
Black Chicken  as part  of our  Taste  the Difference  range. Bred  from  two 
heritage breeds,  the  birds are  free  to  roam outdoors  amongst  trees  and 
hedges. In development for over three years,  it has been heralded as one  of 
the most exciting innovations in poultry farming for decades.


We have always worked closely with British farmers to give our customers  high 
quality, seasonal and fresh British food. It  is our aim to double the  amount 
of British  food  we  sell  by  2020  as  part  of  our  stretching  20  x  20 
Sustainability Plan.  Our  Farmer  Development  Groups  bring  together  2,500 
British farmers in ten producer groups - dairy, beef, pork, lamb, veal,  eggs, 
chicken, cheese,  wheat,  and produce  -  and  through these  groups  we  have 
invested over £40 million in British farming over the last five years.



In October, we launched a £1 million agriculture research and development fund
to kick start the  next wave of  improvements to UK  farming. This money  will 
help farmers and  suppliers to adopt  leading technologies, as  well as  drive 
innovation.



Compelling general merchandise and clothing

Our general merchandise and clothing businesses go from strength to  strength, 
growing faster  than our  food business  and gaining  market share.  However, 
fewer than one in five of our supermarkets have a full non-food offer of  over 
15,000 sq ft, which presents opportunities for future growth.



We have a clear strategy centred  on delivering high street style and  quality 
at supermarket  prices  in  a  way which  leverages  the  footfall  and  brand 
positioning of our  great food  offer. We also  see that  our non-food  offer 
builds customer loyalty, with those who buy clothing, general merchandise  and 
entertainment shopping more frequently than those who do not.



At the end  of the half-year,  our Tu  clothing range achieved  its best  ever 
sales  on  Saturday  29  September.  We  recently  celebrated  the  one  year 
anniversary of our  collaboration with Gok  Wan and also  confirmed five  more 
exclusive Gok for  Tu womenswear  collections for  the coming  year. Our  new 
'Denim Shop',  introduced into  most of  our clothing  stores, nearly  doubled 
denim sales in the period. Additionally, we enjoyed our biggest ever 'Back to
School' season in the second quarter  and remain the fourth largest player  in 
the school uniform market.



The trend  in home  baking continues  to drive  strong sales  of bakeware  and 
baking accessories. We successfully launched our exclusive Great British Bake
Off range of products in 90 stores. Our Home range continues to enjoy  strong 
growth and in the build up to the Jubilee we saw excellent sales on lines such
as bunting, tea towels, aprons, cake tins, dinnerware and mugs. In the second
quarter, we had a strong response to our 'Great Student Value' event,  driving 
sales volumes on  home essential  lines including 500,000  towels and  160,000 
saucepans.



In entertainment, we  are the only  supermarket to grow  market share, up  200 
basis points to  6.6 per cent  in the 12  weeks to 30  September. We  secured 
exclusive versions of some of the biggest DVD releases in the past few  months 
including Avengers  Assemble,  The  Hunger  Games and  War  Horse,  which  all 
performed well. Our investment in own-brand educational books saw sales value
increase in this area by a third.



Increased direct sourcing via  offices in Shanghai,  Hong Kong and  Bangladesh 
has also  enabled us  to forge  better relationships  with our  suppliers  and 
deliver better value for our customers.



Complementary channels and services

People have more choice than  ever before of where, how  and when to do  their 
shopping. To enable our customers to shop  with us in the way they choose,  we 
offer a winning  mix of  supermarkets, convenience  stores and  a full  online 
grocery and  general merchandise  offer. Where  customers shop  all three  of 
these channels  their total  spend is  more than  double that  of the  average 
supermarket only shopper.



Our convenience business  continues to  perform strongly,  with almost  20per 
cent year-on-year growth, and we were named Convenience Chain of the Year  for 
the third year  running in  the Retail Industry  Awards. We  are meeting  our 
target of opening one or  two convenience stores each  week, and in the  first 
half of this year we opened 49  new stores taking our convenience store  total 
to 487. We now have a programme  to upgrade existing stores with an  improved 
fresh food offer. In  the half-year, 12  convenience stores were  refurbished, 
resulting in a good sales uplift.


Our online grocery  business continues to  grow in popularity,  with sales  up 
over 20 per cent in the half,  driven primarily by new customers. Our  online 
grocery orders now regularly exceed  165,000 a week and  we deliver to 96  per 
cent of  UK  postcodes. Customer  feedback  shows that  quality  of  service, 
quality of  food and  ease  of shop  are key  to  this success.  Our  general 
merchandise  website  offers  thousands  of  products  across  home,   garden, 
appliances,  technology,  toys,  sports  and  leisure.  More  than  half  our 
customers opt to collect their orders  via our Click & Collect service,  which 
is available in 946 of our 1,063 stores.



Our goal is to make our customers' lives easier and deliver the best  shopping 
experience - whether in store, at home or on the go. With the launch of mobile
friendly versions  of our  grocery and  general merchandise  websites, we  are 
giving customers  access to  our  products wherever  they  are. We  are  also 
looking at making the  in-store experience even  more convenient by  trialling 
Mobile Scan & Go, a new technology that lets customers scan items as they shop
using their iPhone or Android phone and pay without unloading their trolley or
basket at the till.



Sainsbury's Bank continues to make strong progress, with our share of post-tax
profit at £12 million, up from £7 million this time last year. Lending and
insurance new business volumes are up around 30 per cent. The Bank's strategy
remains to offer shoppers consistently great deals and rewards, enabling them
to benefit from quality financial products, saving money every time they spend
in store, fill up their car or shop online. Customers who have a Sainsbury's
Bank product increase their spend in-store, driven by our ability to offer
them targeted offers and promotions using Nectar loyalty data.



Nectar remains a strong driver for  customers to choose Sainsbury's for  their 
banking as well as their  grocery and general merchandise requirements.  Over 
1.75 billion Nectar points  have been awarded to  over one million  collectors 
since the start of  the Bank's double point  initiative in October 2009.  The 
Bank recently launched its  most rewarding Nectar based  credit card to  date, 
further deepening its relationship  with Nectar and  the commitment to  reward 
customers. Its new cashback credit card, which has seen customer applications
well above target,  makes Sainsbury's  the only  supermarket bank  to offer  a 
choice of reward or cashback cards.



Developing new business

We are also investing beyond our core and developing new businesses and
services.



We have over 270 in-store pharmacies and in October we announced a partnership
with Guy's  and St  Thomas'  NHS Trust  to take  over  the management  of  the 
outpatient pharmacies at  the two  hospitals. We also  manage the  outpatient 
pharmacy at James  Cook University  Hospital in  Middlesbrough. Alongside  our 
pharmacies, Sainsbury's customers also  benefit from ten  NHS GP or  nurse-led 
surgeries and ten stores  also have private dental  surgeries. Our stores  at 
Leeds  White  Rose  and  Ely  have  concessions  operated  by  MEE   Worldwide 
Healthcare, offering hearing and ophthalmological  services, and plans are  in 
place to open a further five MEE concessions in stores across Britain.



In the last quarter, we announced the  formation of a joint venture company  - 
Insight  2  Communication  ('I^2C')  -  with  Aimia,  owners  of  the   Nectar 
programme. I^2C will  plan and  deliver fully integrated  campaigns that  can 
benefit our  22  million customers,  providing  them with  relevant,  targeted 
offers based on the products and categories they want to buy.



Our commitment to  multi-channel retailing  and our  understanding of  digital 
service businesses can  be seen in  our online entertainment  offer, with  the 
announcement of a number of initiatives to further our progress in this area.
In May, we launched our MP3 music download service, giving customers access to
over 2.3 million tracks and albums. In June, we acquired a majority stake  in 
Anobii, a social network  and online retailer of  e-books. More recently,  in 
August, we announced we will be launching a video on demand service powered by
Rovi.



Growing space and creating property value

In line with our plans we opened 351,000 sq ft of space during the  half-year, 
comprising five supermarkets, 49 convenience stores and three extensions.



Some of this additional space has enabled us to bring our increasingly popular
non-food ranges to  a wider  audience, as well  as expanding  our coverage  to 
areas of the country where we do not yet have a strong presence. Around 22 per
cent of  the  UK  population do  not  live  within  a 15  minute  drive  of  a 
Sainsbury's store, and we have less than five per cent market share in 42  per 
cent of  UK  postcodes.  We  have  a  steady  pipeline  of  space  ready  for 
development, including planning consents for around 60 supermarket extensions,
as well as  a number  of opportunities  for new  supermarkets and  convenience 
stores.



We work with joint venture partners to add property value and trading space to
our estate. In April, as part of our British Land joint venture we opened our
newly extended store at Purley Way, Croydon, providing an uplift of 10,200  sq 
ft. We also received planning permission  to extend our Weedon Road store  in 
Northampton by 23,600 sq ft, with the improved offer set to open in November.
A deal was  signed with Barratt  London in  July to bring  forward our  Fulham 
Wharf project. Work on site started this summer and will deliver a replacement
76,000 sq ft supermarket and 267  of 463 residential apartments by mid  2015. 
Our partnership  with  Land Securities  has  seen  work move  forward  at  our 
Wandsworth Garratt Lane store where the building of our 34,700 sq ft extension
is progressing well.



The market value of  our property remains at  an estimated £11.2 billion.  In 
the half, sale  and leaseback activity  was worth £128  million, generating  a 
property profit of £48 million, up 23 per cent on the same period last year.



Our values make us different

Our values are part of what differentiates us from our competitors. Our 20  x 
20 Sustainability Plan, published in October 2011, ensures we continue to lead
in this  aspect  of business,  and  derive long-term,  sustainable  advantage. 
Highlights in the last six months include:



·Best for  food and  health: We  continue  to lead  the food  industry  on 
nutritional labelling.  We called  for a  move to  consistent front  of  pack 
labelling, combining multiple traffic lights and daily guideline amounts.  By 
committing to make changes, we are  working to bring about industry  consensus 
to help customers make healthier eating choices.



·Sourcing with integrity: In May, following an overwhelming majority  vote 
from Sainsbury's Dairy Development Group farmers, we introduced a unique  Cost 
of Production payment model, designed to rewardfarmers for outstanding animal
welfare and environmental standards. In August, Sainsbury's again led the way
in paying a  premium to our  dedicated pork producers  to reflect rising  feed 
costs. Also, in recognition of the work we are doing on pig welfare, our  Pig 
Concept Farm won Compassion  in World Farming's  Leadership and Innovation  in 
Retailaward.



·Respect for  our environment:  Our  significant investment  in  renewable 
energy continued  and  we now  have  the  largest multi-roof  solar  array  in 
Europe. This will  reduce our  total CO[2  ]emissions by  an estimated  6,800 
tonnes this year and ongoing, while  also delivering energy cost savings.  We 
were the first company to use  geothermal technology as an alternative  energy 
source for our  store in Crayford,  and we are  now developing the  technology 
with E.ON for use in up to 100 of our stores.



·A positive difference to our community: As the first ever Paralympic-only
sponsor, we were proud to  play a full part  in the Games. 18,000  Sainsbury's 
customers and colleagues were given the  opportunity to attend the Games  with 
Sainsbury's support.  150 Sainsbury's  colleagues were  seconded to  LOCOG  or 
acted as  Games  Makers.  145  customers  and  colleagues  took  part  in  the 
Paralympic Torch  Relay  and  the  Torch has  also  toured  our  supermarkets, 
generating high levels of customer  and colleague engagement. After the  Games 
we announced that we  will build on  our Million Kids  Challenge with our  new 
'Active Kids for All' Paralympic legacy plan. This is a £1 million  commitment 
to fund  teacher  training to  ensure  that half  a  million children  with  a 
disability in mainstream education are  included in school sports lessons.  We 
also announced that we are extending our sponsorship of the British Paralympic
Association to support them through the Sochi Winter Paralympic Games in 2014,
and all the way through to Rio in 2016.



In  October,  we  ran  our  second  FareShare  Million  Meals  Appeal  with  a 
record-breaking  number  of  donations  from  customers  -  each  matched   by 
Sainsbury's - making it  the UK's biggest ever  single-charity food drive  and 
helping disadvantaged people across the country.



·Great place to work: We have  created over 2,500 new jobs this  half-year 
and are  recruiting  an additional  20,000  seasonal jobs  to  meet  increased 
customer demand and provide an even better service over the busy Christmas and
New Year  period. We  anticipate around  2,000  of these  jobs will  be  made 
permanent. This year  we recruited 150  young people on  our trainee  manager 
scheme, more than double that in  2011. Trainees spend a year learning  every 
aspect of  how  to  run  a  Sainsbury's department  and  are  mentored  by  an 
experienced store manager.



Our values are being  recognised by customers  and stakeholders. Our  research 
shows our  customers increasingly  trust us  on the  issues they  care  about, 
whilst sustainability experts have endorsed  our leadership. In September,  we 
were named the world's leading  food retailer for sustainability, topping  the 
Dow Jones Sustainability  Index for  the sixth year  running, reinforcing  our 
leadership position in the FTSE4Good Index. During the half-year, we were the
first food  retailer  to  be  awarded  'Platinum  Plus'  in  Business  in  the 
Community's Corporate Responsibility Index and were namedSustainable Retailer
of the Yearby the Retail Industry Awards.

Financial Review

                                                                             

Sainsbury's continues to grow sales, maintaining its outperformance versus the
market, despite  the tough  competitive environment  and challenging  economic 
climate. The business  continues to  invest in  the quality  of its  own-brand 
range, with  strong growth  in both  by Sainsbury's  andTaste the  Difference. 
Targeted vouchering activity and an  ongoing investment in Brand Match  helped 
reinforce the  competitiveness of  Sainsbury's price  position. Combined  with 
proud sponsorship of the Paralympics, and  continued progress toward our 20  x 
20 targets  meant  the business  delivered  a good  overall  performance.  The 
balance sheet remains strong, backed by £11.2 billion of property value.



Sales (including VAT) increased by 4.0 per cent, to £13,365 million  (2011/12: 
£12,848 million). Underlying operating profit increased in line with sales  to 
£412  million  (2011/12:  £396  million),  with  operating  margin   remaining 
unchanged year-on-year, but with an improvement  of 1 basis point at  constant 
fuel prices.



Underlying profit before tax ('UPBT') improved by 5.4 per cent to £373 million
(2011/12: £354 million). This growth was ahead of operating profit growth  due 
to strong performance in Joint Venture  ('JV') profits. Profit before tax  was 
up 2.5 per cent, at £405 million (2011/12: £395 million), with higher property
profits of £48 million  (2011/12: £39 million) partially  offset by a  pension 
financing charge of £1 million (2011/12: £9 million credit).



Underlying basic earnings  per share  increased to 15.2  pence (2011/12:  13.9 
pence), up 9.4 per cent. This was higher than the growth in underlying  profit 
due to a  reduced underlying  tax rate  of 23.6  per cent  (2011/12: 26.6  per 
cent), principally  due  to the  impact  of  the reduction  in  the  statutory 
corporation tax rate. Basic  earnings per share increased  by 4.9 per cent  to 
17.0 pence (2011/12: 16.2 pence).



An interim dividend  of 4.8 pence  per share  has been proposed  by the  Board 
(2011/12: 4.5 pence per share), up 6.7 per cent year-on-year. This is in  line 
with Sainsbury's policy of  paying 30 per cent  of the prior year's  full-year 
dividend as an interim dividend.



Summary income statement                      

                                  28 weeks to 28 weeks to         52 weeks to

                                  29 September   1 October            17 March
                                          2012
                                                      2011  Change        2012
                                           £m          £m       %          £m
Sales (including VAT)                   13,365      12,848     4.0      24,511
Sales (excluding VAT)                   12,160      11,693     4.0      22,294
Underlying operating profit                412         396     4.0         789
Underlying net finance costs ^(1)         (59)        (57)   (3.5)       (109)
Underlying  share   of   post-tax           20          15    33.3          32
profit from JVs ^(2)
Underlying profit before tax               373         354     5.4         712
Profit on disposal of properties            48          39    23.1          83
Investment  property  fair  value          (1)           3 (133.3)           -
movements
Financing fair value movements            (11)        (10)  (10.0)        (16)
IAS    19    pension    financing          (1)           9 (111.1)          17
(charge)/credit
One-off items                              (3)           -     n/a           3
Profit before tax                          405         395     2.5         799
Income tax expense                        (85)        (93)     8.6       (201)
Profit for the financial period            320         302     6.0         598
Underlying  basic  earnings   per        15.2p       13.9p     9.4       28.1p
share
Basic earnings per share                 17.0p       16.2p     4.9       32.0p
Dividend per share                        4.8p        4.5p     6.7       16.1p



(1) Net finance costs before financing fair value movements and the IAS  19 
pension financing element.

(2) The underlying share of post-tax  profit from joint ventures is  stated 
before  investment  property  fair  value  movements,  financing  fair   value 
movements and profit on disposal of properties.



Sales (including VAT) and space

Sales (including fuel) increased by 4.0 per cent to £13,365 million  (2011/12: 
£12,848 million).



This includes a 2.3 per cent contribution from new space (excluding extensions
and replacements) and like-for-like ('LFL') sales growth of 1.7 per cent.



        Sales  growth  (including                                           
        VAT, including fuel)
                                          28 weeks to 29              52 weeks
                                         September 2012                 to 17
                                                          28 weeks to    March
                                                       %    1 October
                                                                 2011     2012

                                                                    %        %
Like-for-like sales                                  1.7          5.1      4.5
Net new space  (excluding extensions  and            2.3          2.5      2.3
replacements)
Total sales growth                                   4.0          7.6      6.8

                                                                             

Sales (excluding fuel) grew by 4.1 per cent, with LFL growth of 1.7 per  cent. 
Sainsbury's grew market  share for the  52 weeks  to 30 September  2012 by  14 
basis points to 16.7 per cent (as measured by Kantar).



LFL sales growth was 1.4 per cent in the first quarter where, just as in 2011,
the quarter was characterised by five bank holidays, a royal event and periods
of unseasonal  weather.  The second  quarter,  which contained  the  Olympics, 
Paralympics and continued periods of unseasonal weather, had LFL growth of 1.9
per cent.  The  contribution from  net  new space  (excluding  extensions  and 
replacements) of 2.4 per cent was slightly ahead of Sainsbury's  expectations. 
Both convenience  and online  saw growth  of around  20 per  cent,  delivering 
Sainsbury's strategy of multi channel  growth, and non-food continued to  grow 
at more than twice the rate of food.



        Sales  growth   (including                                         
        VAT, excluding fuel)
                                           28 weeks to 29 28 weeks to 52 weeks
                                          September 2012                to 17
                                                            1 October    March
                                                        %
                                                                 2011     2012

                                                                    %        %
Like-for-like sales ^(1)                              1.7         1.9      2.1
Net new  space (excluding  extensions  and            2.4         2.4      2.4
replacements)
Total sales growth                                    4.1         4.3      4.5



(1) This includes a 0.8 per  cent contribution from stores extended in  the 
first half of 2012/13 and the second half of 2011/12, net of disruptions.



Sainsbury's has  added a  gross  351,000 sq  ft  of selling  space  (including 
replacements and extensions) since the start  of the year, an increase of  1.7 
per cent (2011/12: 596,000 sq  ft and 3.1 per  cent). Including the impact  of 
closures, this translated into net space growth of 321,000 sq ft, an  increase 
of 1.6 per cent since the start of the year (2011/12: 2.8 per cent).



The first half opening programme included five new supermarkets, of which  one 
was a replacement store  (2011/12: seven new supermarkets,  of which two  were 
replacements). These generated an  additional 178,000 sq  ft of gross  selling 
space (a net  152,000 sq ft).  In line  with our guidance  at the  Preliminary 
Announcement, we have stepped up the number of refurbishments to 14 stores and
consequently reduced the number of extensions to three, adding 68,000 sq ft of
selling space (2011/12: 15 extensions  and three refurbishments added  269,000 
sq ft).



Convenience continues to be a key area of growth, with 49 stores added  during 
the first  half of  the year  (2011/12:  37 stores).  Two stores  were  closed 
(2011/12: no stores closed) and 12 refurbished (2011/12: 15 stores), with  net 
convenience space growth of 101,000 sq ft  during the first half of the  year, 
an increase of  9.8 per cent  since the start  of the year  (2011/12: 8.8  per 
cent), and on track to  meet our target of opening  one to two new stores  per 
week.



Net of replacements, closures and disposals, closing space of 20,668,000 sq ft
was 5.2 per cent higher than last year (1 October 2011: 19,638,000 sq ft).



        Store
        numbers  and 
        retailing
        space
        at        29         Supermarkets       Convenience          Total
        September
        2012
                             Number   Area     Number            Number   Area
                                                            Area
                                    000 sq                              000 sq
                                       ft             000 sq ft            ft
        At 17  March            572 19,320        440      1,027  1,012 20,347
        2012
New stores                        5    178         49        105     54    283
Disposals/closures              (1)   (26)        (2)        (4)    (3)   (30)
Extensions/                       -     68          -       -     68
refurbishments/downsizes                                     -
At 29 September 2012            576 19,540        487      1,128  1,063 20,668
Memorandum:                                                             
                                  3     56 
Extensions                                        -          -      3     56
Refurbishments/downsizes         14     12         12          -     26     12
Total projects                   17     68         12          -     29     68



Sainsbury's expects the market to remain challenging with forecast LFLs in the
second half similar to  those in the  first half and  a contribution from  new 
space to total sales  growth (excluding extensions  and replacements) of  just 
above two per cent for the full-year.



Underlying operating profit

Underlying operating  profit  increased  by  4.0  per  cent  to  £412  million 
(2011/12: £396 million),  reflecting a  good sales  performance and  continued 
cost efficiencies helping to offset most of the impact of cost inflation.



Underlying operating  margin  was  unchanged year-on-year  at  3.39  per  cent 
(2011/12: 3.39  per cent),  but showed  an  improvement of  1 basis  point  at 
constant fuel prices. Underlying  EBITDAR margin reduced by  1 basis point  to 
7.65 per cent,  but was  1 basis point  higher year-on-year  at constant  fuel 
prices.



Underlying                                                         
operating profit                                                     52 weeks
                    28 weeks to 29                         Change at    to 17
                   September 2012 28 weeks to 1        constant fuel    March
                                    October 2011 Change        prices     2012
Underlying
operating    profit            412           396   4.0%                    789
(£m) ^(1)
Underlying
operating    margin           3.39          3.39      -          1 bp     3.54
(%) ^(2)
Underlying  EBITDAR            930           896   3.8%                  1,740
(£m) ^ (3)
Underlying  EBITDAR           7.65          7.66 (1) bp          1 bp     7.80
margin (%) ^  ^(4)

                                                                             

(1) Underlying earnings before interest, tax, and before Sainsbury's  share 
of post-tax profit from joint ventures.

(2) Underlying operating profit divided by sales excluding VAT.

(3) Underlying operating profit before rent, depreciation and amortisation.

(4) Underlying EBITDAR divided by sales excluding VAT.



Sainsbury's expects cost inflation in 2012/13 at  the upper end of its two  to 
three per cent range. The Group expects cost savings of around £100 million in
2012/13.



Sainsbury's Bank joint venture ('JV')

Sainsbury's share of Sainsbury's Bank post-tax profit increased by £5  million 
to £12 million for the half-year (2011/12: £7 million). The profit growth  has 
been driven through the Bank increasing total income, particularly in car  and 
home insurance, whilst continuing to deliver lower bad debt levels.



The Sainsbury's Bank JV is expected to contribute a similar run rate of profit
in the second half, to that of the first half. ^(1)



(1) Based on 28 weeks in the first half and 24 weeks in the second half.



Property joint ventures

Sainsbury's underlying share of post-tax profit  from its JV with The  British 
Land Company PLC was £7 million  for the half-year (2011/12: £7 million).  Its 
underlying share of post-tax profit from the JV with Land Securities Group PLC
was £1 million for the half-year (2011/12: £1 million).



A loss  on  revaluation of  £1  million was  recognised  within the  share  of 
post-tax profit from  the JVs  in the  income statement  (2011/12: £3  million 
surplus), with property yields remaining  unchanged from the year-end, at  5.0 
per cent (2011/12: 4.9 per cent).



Full-year profits from the Property JVs are expected to be similar to 2011/12.



Underlying net finance costs

Underlying net finance costs increased by £2 million to £59 million  (2011/12: 
£57 million) mainly as a  result of the increase  in average net debt,  partly 
offset by a reduction in the RPI rate on the Group's inflation linked debt.



Underlying  net  finance  costs                                       
^(1)
                                    28 weeks to 28 weeks to   52 weeks to

                                   29 September   1 October 17 March 2012

                                           2012        2011            £m

                                             £m          £m
Underlying finance income ^(1)               10           9            18
Interest costs                             (89)        (85)         (162)
Capitalised interest                         20          19            35
Underlying finance costs ^(1)              (69)        (66)         (127)
Net underlying finance costs ^(1)          (59)        (57)         (109)



(1) Finance income/costs before financing  fair value movements and IAS  19 
pension financing element.



Underlying net  finance  costs  for  the full-year  2012/13  are  expected  to 
increase by £0 - £5 million versus the prior year.



Taxation

The income  tax  expense was  £85  million  (2011/12: £93  million),  with  an 
underlying tax rate of 23.6 per cent (2011/12: 26.6 per cent) and an effective
tax rate of 21.0 per  cent (2011/12: 23.5 per  cent). The underlying rate  was 
lower than  last  year, primarily  as  a result  of  the two  per  cent  lower 
statutory corporation tax rate, and the  impact of this on the revaluation  of 
the deferred tax balances.



The effective tax rate is lower than the underlying tax rate primarily due  to 
the non-taxable profit on disposal of properties.



Underlying tax rate
28 weeks to 29 September 2012                                            Rate
                                                              Profit Tax
                                                                  £m  £m    %
        Profit before tax, and tax thereon                       405  85 21.0
        Adjustments (and tax thereon) for:
        Profit on disposal of properties                        (48)   -
        Investment property fair value movements                   1   -
        Financing fair value movements                            11   1
        IAS 19 pension financing element                           1   -
        One off items                                              3   -
        Revaluation of deferred tax balances                       -   2
        Underlying profit before tax, and tax thereon            373  88 23.6



Sainsbury's expects the underlying tax rate to  be between 23 and 24 per  cent 
in 2012/13, lower than the  prior year, principally due  to the impact of  the 
reduction in the statutory corporation tax rate.



Earnings per share

Underlying basic earnings per share increased by 9.4 per cent to 15.2 pence in
the first half of 2012/13 (2011/12: 13.9 pence), reflecting the improvement in
underlying profit after tax  and the lower  underlying tax rate  year-on-year, 
partially offset by  the effect  of the  additional shares  issued during  the 
year.



The weighted average number of shares  in issue was 1,880.4 million  (2011/12: 
1,868.6 million), an increase of 11.8 million shares or 0.6 per cent.



Basic earnings per share increased to 17.0 pence (2011/12: 16.2 pence).  Basic 
earnings per share were  higher than the underlying  basic earnings per  share 
due mainly to the profit on disposal of properties.



Underlying earnings per share                                  

                                         28 weeks to 28 weeks to

                                         29 September   1 October

                                                 2012        2011
                                               pence       pence
Basic earnings per share                         17.0        16.2
Adjustments (net of tax) for:
Profit on disposal of properties                (2.6)       (2.1)
Investment property fair value movements          0.1       (0.2)
Financing fair value movements                    0.5         0.5
IAS 19 pension financing element                  0.1       (0.5)
One off items                                     0.2           -
Deferred tax rate change                        (0.1)           -
Underlying basic earnings per share              15.2        13.9



Dividends

The Board has recommended an interim dividend of 4.8 pence per share (2011/12:
4.5 pence), equivalent to 30 per cent of the previous full-year dividend. This
will be paid on 4 January 2013  to shareholders on the Register of Members  at 
the close of business on 23  November 2012. The interim dividend was  approved 
by the Board on 13  November 2012 and has not,  therefore, been included as  a 
liability as at 29 September 2012.



As communicated at the  Preliminary Announcement, Sainsbury's remains  focused 
on delivering  returns  to  shareholders.  The Board  plans  to  increase  the 
dividend each year and  intends to build  cover to two  times over the  medium 
term.



Return on capital employed

The return  on average  capital employed  ('ROCE')  over the  52 weeks  to  29 
September 2012 was  10.9 per  cent (2011/12: 10.9  per cent),  an increase  of 
three basis points.



ROCE growth was  held back  by the cumulative  effect of  the acceleration  in 
Sainsbury's investment in space  growth since June 2009,  as well as the  more 
challenging economic environment  and impact on  industry profitability.  This 
has reduced  earnings  growth,  whilst  the  value  of  capital  employed  has 
increased.





        Return    on     capital                                         
        employed
                                         52 weeks to 29 52 weeks to 52 weeks
                                             September                   to 
                                                          1 October
                                                   2012        2011 17 March

                                                                        2012
Underlying operating profit (£m)                    805         764        789
Underlying share of post-tax profit from             37          26         32
joint ventures (£m)
Underlying profit  before  interest  and            842         790        821
tax (£m)
Average capital employed ^(^1) (£m)               7,721       7,262      7,424
Return on average capital employed (%)             10.9        10.9       11.1
Return on average capital employed (%)             10.3        10.4       10.6

(excluding pension fund deficit)
52 week  ROCE movement  to 29  September          3 bps
2012
ROCE movement since 52 weeks to 17 March       (15) bps
2012



(1) Average of opening and closing net assets before net debt.



Net debt and cash flows

Sainsbury's net debt  as at 29  September 2012 was  £2,179 million (1  October 
2011: £2,115 million), an increase of £64 million year-on-year and an increase
of £199 million  since 17  March 2012. The  increase was  driven primarily  by 
investment in estate development, partially offset by cash generated from sale
and leasebacks.



Cash generated  from operations  improved by  15.2 per  cent to  £637  million 
(2011/12: £553  million, 17.7  per  cent). Working  capital increased  by  £47 
million since  17 March  2012, driven  by an  increase in  inventories of  £78 
million and trade and other receivables  of £134 million, partly offset by  an 
increase in trade and other payables and provisions of £165 million.



  Summary cash flow statement  and                                         
  movement in net debt
                                           28 weeks to 28 weeks to 52 weeks to

                                     29 September 2012   1 October    17 March

                                                    £m        2011        2012

                                                                £m          £m
Operating cash  flow before  changes 
in working capital                                 684         657       1,238
(Increase)/decrease    in    working 
capital                                           (47)       (104)          53
Cash generated from operations                     637         553       1,291
Interest paid                                     (79)        (73)       (142)
Corporation tax paid                              (28)        (24)        (82)
Net cash from operating activities                 530         456       1,067
Net   cash    used   in    investing 
activities                                       (476)       (498)       (883)
Proceeds from issue of shares                        4           3          14
Receipt of new debt                                 75         119         391
Repayment of borrowings                          (105)        (42)        (65)
Dividends paid                                   (218)       (201)       (285)
Decrease   in    cash    and    cash 
equivalents                                      (190)       (163)         239
Increase/(decrease) in debt                         20       (129)       (386)
Fair  value   and   other   non-cash 
movements                                         (29)         (9)        (19)
Movement in net debt                             (199)       (301)       (166)



Sainsbury's expects net debt to be around £2.2 billion at the end of 2012/13.



Financing

Sainsbury's seeks to  manage its  financing by  diversifying funding  sources, 
minimising refinancing  risk and  maintaining sufficient  stand-by  liquidity. 
Sainsbury's has drawn debt of £2.7 billion and an un-drawn credit facility  of 
£0.7 billion at its disposal.



The principal  elements of  Sainsbury's core  funding comprise  two  long-term 
loans of  £1,019 million  due 2018  and  £843 million  due 2031  secured  over 
property assets. In addition, Sainsbury's  has unsecured loans totalling  £510 
million with maturities ranging from 2014 to 2018, £190 million of convertible
bonds due July 2014,  £104 million of hire  purchase facilities in respect  of 
movable in-store assets and £58 million of other finance leases.



Sainsbury's maintains a £690 million syndicated revolving credit facility  due 
October 2015 for standby purposes. Interest on drawings under this facility is
charged at a margin over LIBOR. There were £nil drawings under the facility as
at 29 September 2012 (1 October 2011: £nil drawings).



Capital expenditure

Core capital expenditure decreased to £576 million (2011/12: £682 million)  in 
the half-year. Sainsbury's  stepped up its  convenience opening programme  but 
reduced extension  growth,  opening  49  convenience  stores  but  only  three 
extensions (2011/12:  37 convenience  stores and  15 extensions).  During  the 
year, Sainsbury's completed  26 refurbishments  (2011/12: 18  refurbishments), 
reflecting the step up in refurbishment activity in the half.



Core capital expenditure as a  percentage of sales (including fuel,  excluding 
VAT) was 4.7 per cent (2011/12: 5.8 per cent).



Sainsbury's also  took advantage  of  continued good  property yields  in  the 
half-year to achieve  £131 million  in sale and  leaseback proceeds  (2011/12: 
£129 million), which  contributed to a  total property profit  of £48  million 
(2011/12: £39 million).  Net capital  expenditure was  £487 million  (2011/12: 
£556 million).



Capital expenditure                                               52 weeks to
                                                      28 weeks to    17 March
                                   28 weeks to 29
                                    September 2012 1 October 2011        2012
                                               £m            £m         £m
New store development                          312            321         599
Extensions and refurbishments                  202            274         478
Other - including supply chain and              62             87         163
IT
Core retail capital expenditure                576            682       1,240
Acquisition   of   freehold    and              42              3          25
trading properties
Proceeds       from       property           (131)          (129)       (303)
transactions
Net capital expenditure                        487            556         962



Sainsbury's expects full-year  2012/13 core capital  expenditure of around  £1 
billion. We expect  core capital expenditure  as a percentage  of sales to  be 
below five per cent for the full-year.



Summary balance sheet

Shareholders' funds as  at 29  September 2012  were £5,502  million (17  March 
2012: £5,629 million), a decrease of £127 million. This is mainly attributable
to the increase in the net  retirement benefit obligation of £242 million  and 
increase in net debt  of £199 million, partly  offset by continued  profitable 
growth of the underlying business and the additional space added.



The book value of property, plant and equipment, including land and buildings,
has grown by £301 million since the start of the year as a result of increased
space growth.



Net debt was £199 million higher than at 17 March 2012 (2011/12: £301  million 
higher than at  19 March 2011),  driven primarily by  space related growth  in 
property, plant and equipment.


Adjusted net  debt to  EBITDAR improved  to 4.1  times (2011/12:  4.2  times), 
interest cover improved to 7.3 times (2011/12: 7.2 times), while fixed  charge 
cover was in line with  last year at 3.0  times (2011/12: 3.0 times).  Gearing 
increased year-on-year to 39.6 per cent (2011/12: 37.5 per cent) mainly due to
the increase  in  net debt  and  the increase  in  the pension  fund  deficit. 
Excluding the pension deficit, gearing reduces to 35.2 per cent (2011/12: 36.3
per cent).



Summary balance sheet
                                              Movement

                                                 since

                                 29 September 17 March 1 October

                                         2012     2012      2011 17 March 2012

                                           £m       £m        £m            £m
Land and buildings (freehold and
long leasehold)                         7,121      319     6,682         6,802
Land   and   buildings    (short 
leasehold)                                651        3       687           648
Fixtures and fittings                   1,858     (21)     1,707         1,879
Property, plant and equipment           9,630      301     9,076         9,329
Other non-current assets                  909      (2)       877           911
Inventories                             1,016       78       976           938
Trade and other receivables               421      135       415           286

Cash and cash equivalents                 551    (188)       364           739
Debt                                  (2,730)     (11)   (2,479)       (2,719)
Net debt                              (2,179)    (199)   (2,115)       (1,980)

Trade  and  other  payables  and 
provisions                            (3,598)    (198)   (3,395)       (3,400)
Retirement benefit  obligations, 
net of deferred tax                     (697)    (242)     (188)         (455)

Net assets                              5,502    (127)     5,646         5,629
Key financial ratios
Adjusted net  debt to  EBITDAR   
^(1)                                4.1 times          4.2 times     4.1 times
Interest cover  ^(2)                7.3 times          7.2 times     7.5 times
Fixed charge cover  ^(3)            3.0 times          3.0 times     3.1 times
Gearing ^(4)                            39.6%              37.5%         35.2%
Gearing    (excluding    pension 
deficit) ^(5)                           35.2%              36.3%         32.5%



(1) Net debt plus capitalised lease obligations (5.5% NPV) divided by
underlying EBITDAR, calculated on a rolling 52 week basis.

(2) Underlying profit before interest and tax divided by underlying net
finance costs, calculated for a 28 week period at half-year, and 52 week
period at year-end.

(3) Underlying EBITDAR divided by net rent and underlying net finance costs,
calculated for a 28 week period at half-year, and 52 week period at year-end.

(4) Net debt divided by net assets.

(5) Net debt divided by net assets, excluding pension deficit.



As at 29  September 2012,  Sainsbury's estimated market  value of  properties, 
including our  50 per  cent share  of properties  held within  property  joint 
ventures, was £11.2 billion, in line  with the year-end (17 March 2012:  £11.2 
billion). The yield remained constant at 4.9 per cent.



Pensions

As at 29 September 2012, the post-tax pension deficit was £242 million  higher 
at £697 million  (17 March 2012:  £455 million) mainly  due to a  fall in  the 
discount rate from 5.0 per cent to 4.4 per cent, partially offset by a fall in
RPI inflation expectations from  3.3 per cent  to 2.8 per cent  and a 2.9  per 
cent increase in the value of plan assets.



The IAS  19 pension  service cost  included within  UPBT was  £34 million,  £2 
million higher than in the first half of last year.



Sainsbury's expects the full-year service charge  to be around £60 million  in 
2012/13.



Retirement benefit obligations
                                      29 September
                                                                  17 March
                                              2012 1 October 2011     2012

                                                £m             £m       £m
Present value of funded obligations        (6,106)        (4,793)  (5,654)
Fair value of plan assets                    5,343          4,689    5,192
Pension deficit                              (763)          (104)    (462)
Present value of unfunded obligations         (10)            (9)      (9)
Retirement benefit obligations               (773)          (113)    (471)
Deferred income tax asset/(liability)           76           (75)       16
Net retirement benefit obligations           (697)          (188)    (455)

Group income statement (unaudited)

for the 28 weeks to 29 September 2012



                                        28 weeks to 28 weeks to 52 weeks to
                                       29 September   1 October    17 March
                                               2012        2011        2012
                                  Note           £m          £m          £m
 
 Revenue                            4         12,160      11,693      22,294
  Cost of sales                              (11,512)    (11,074)    (21,083)
  Gross profit                                    648         619       1,211
  Administrative expenses                       (239)       (223)       (419)
 Other income                                     49          38          82
 Operating profit                                458         434         874
 Finance income                     5             10          18          35
 Finance costs                      5           (80)        (73)       (138)
 Share of post-tax profit from
  joint ventures                                   17          16          28
 Profit before tax                  4            405         395         799
 
 Analysed as:
 Underlying profit before tax       4            373         354         712
 Profit on disposal of properties   3             48          39          83
 Investment property fair value
  movements                          3            (1)           3           -
 Financing fair value movements     3           (11)        (10)        (16)
 IAS 19 pension financing
  (charge)/credit                    3            (1)           9          17
 One-off items                      3            (3)           -           3
                                                405         395         799
 
 Income tax expense                 6           (85)        (93)       (201)
 
 Profit for the financial period                 320         302         598
 
 Attributable to:
 Owners of the parent                            320         302         598
                                                320         302         598
 
 
 Earnings per share                 7          pence       pence       pence
 Basic                                          17.0        16.2        32.0
  Diluted                                        16.8        15.9        31.5
 Underlying basic                               15.2        13.9        28.1
 Underlying diluted                             15.0        13.8        27.8





The notes on pages 23 to 34 form an integral part of these Condensed
Consolidated Interim Financial Statements.

Group statement of comprehensive income (unaudited)

for the 28 weeks to 29 September 2012



                                          28 weeks to 28 weeks to 52 weeks to
                                         29 September   1 October    17 March
                                                 2012        2011        2012
                                                   £m          £m          £m
Profit for the period                              320         302         598

Other comprehensive income/(expense):
Actuarial (losses)/gains on defined
benefit pension scheme                           (311)         209       (222)
Available-for-sale financial assets fair
value movements:
Group                                                4           2           1
Joint ventures                                       2         (4)           2
Cash flow hedges effective portion of
fair value movements:
Group                                             (14)           4           -
Joint ventures                                       -           2           2
Current tax on items recognised directly
in other comprehensive income                       13           -          59
Deferred tax on items recognised
directly in other comprehensive income              57       (103)          11
Total other comprehensive
(expense)/income for the period (net of
tax)                                             (249)         110       (147)
Total comprehensive income for the
period                                              71        412         451

Attributable to:
Owners of the parent                                71         412         451
                                                   71         412         451





The notes on pages 23 to 34 form an integral part of these Condensed
Consolidated Interim Financial Statements.

Group balance sheet (unaudited)

at 29 September 2012



                                              29 September 1 October 17 March
                                                      2012      2011     2012
                                         Note           £m        £m       £m
Non-current assets
Property, plant and equipment                         9,630     9,076    9,329
Intangible assets                                       159       148      160
Investments in joint ventures                           561       528      566
Available-for-sale financial assets                     183       178      178
Other receivables                                        37        37       38
Derivative financial instruments                         40        43       37
                                                    10,610    10,010   10,308
Current assets
Inventories                                           1,016       976      938
Trade and other receivables                             421       415      286
Derivative financial instruments                         78        78       69
Cash and cash equivalents                  9b           551       364      739
                                                     2,066     1,833    2,032
Non-current assets held for sale                          -        20        -
                                                     2,066     1,853    2,032
Total assets                                         12,676    11,863   12,340

Current liabilities
Trade and other payables                            (2,842)   (2,730)  (2,740)
Borrowings                                            (132)     (165)    (150)
Derivative financial instruments                       (91)      (87)     (88)
Taxes payable                                         (211)     (202)    (149)
Provisions                                             (13)      (11)      (9)
                                                   (3,289)   (3,195)  (3,136)
Net current liabilities                             (1,223)   (1,342)  (1,104)

Non-current liabilities
Other payables                                        (171)     (127)    (137)
Borrowings                                          (2,644)   (2,378)  (2,617)
Derivative financial instruments                       (12)       (4)      (1)
Deferred income tax liability                         (226)     (340)    (286)
Provisions                                             (59)      (60)     (63)
Retirement benefit obligations             11         (773)     (113)    (471)
                                                   (3,885)   (3,022)  (3,575)
Net assets                                            5,502     5,646    5,629

Equity
Called up share capital                                 539       537      538
Share premium account                                 1,064     1,051    1,061
Capital redemption reserve                              680       680      680
Other reserves                                        (617)     (105)    (365)
Retained earnings                                     3,835     3,483    3,715
Equity attributable to owners of the
parent                                                5,501     5,646    5,629
Non-controlling interests                                 1         -        -
Total equity                                          5,502     5,646    5,629




The notes on pages 23 to 34 form an integral part of these Condensed
Consolidated Interim Financial Statements.

Group cash flow statement (unaudited)

for the 28 weeks to 29 September 2012



                                          28 weeks to 28 weeks to 52 weeks to
                                         29 September   1 October    17 March
                                                 2012        2011        2012
                                    Note           £m          £m          £m
Cash flows from operating activities
Cash generated from operations        9a           637         553       1,291
Interest paid                                     (79)        (73)       (142)
Corporation tax paid                              (28)        (24)        (82)
Net cash inflow from operating
activities                                         530         456       1,067

Cash flows from investing activities
Purchase of property, plant and
equipment                                        (609)       (675)     (1,227)
Purchase of intangible assets                      (8)         (7)        (25)
Proceeds from disposal of property,
plant and equipment                                132         137         314
Acquisition of and investment in
subsidiaries and businesses, net of
cash acquired                                     (21)           -         (1)
Increase in loans to joint ventures                (4)         (1)         (1)
Proceeds from disposal of financial
assets                                               -          40          40
Investment in financial assets                       -           -         (1)
Interest received                                   10           8          18
Dividends received                                  24           -           -
Net cash outflow from investing
activities                                       (476)       (498)       (883)

Cash flows from financing activities
Proceeds from issuance of ordinary
shares                                               4           3          14
Proceeds from long-term borrowings                  75         119         391
Repayment of short-term borrowings                (50)           -           -
Repayment of long-term borrowings                 (40)        (35)        (51)
Repayment of capital element of
obligations under finance lease
payments                                          (11)         (5)         (9)
Interest elements of obligations
under finance lease payments                       (4)         (2)         (5)
Dividends paid                                   (218)       (201)       (285)
Net cash (outflow)/inflow from
financing activities                             (244)       (121)          55
Net (decrease)/increase in cash and
cash equivalents                                 (190)       (163)         239

Opening cash and cash equivalents                  739         500         500

Closing cash and cash equivalents     9b           549         337         739



The notes on pages 23 to 34 form an integral part of these Condensed
Consolidated Interim Financial Statements.

Group statement of changes in equity (unaudited)

for the 28 weeks to 29 September 2012



                                                                            

                                                              Non-controlling
                    Called            Capital                        interests
                        up   Share redemption            
                     share premium  and other   Retained                        Total
                   capital account   reserves   earnings Total                 equity
                       £m      £m         £m         £m    £m              £m     £m
At 18 March 2012       538   1,061        315      3,715 5,629               -  5,629
Profit for the                                             320
period                   -       -          -        320                     -    320
Other
comprehensive
income/(expense):
Actuarial losses                                             
on defined benefit
pension scheme                                           (243)
(net of tax)             -       -      (243)          -                     -  (243)
Available-for-sale
financial assets
fair value
movements (net of
tax):
 Group                 -       -          6          -     6               -      6
 Joint ventures        -       -          2          -     2               -      2
Cash flow hedges
effective portion
of changes in fair
value (net of
tax):
 Group                 -       -       (14)          -  (14)               -   (14)
                                               The story
                                                has been
                                              truncated,
                                               
[TRUNCATED]