Sainsbury’s shares up on profits news

<p>Stocks in Sainsbury’s have risen sharply this morning.</p>

The share price of UK supermarket company Sainsbury's has risen in the early stages of trading this morning (May 7th) following the release of the firm's latest financial results.

After the company announced a 16.3 per cent rise in its annual pre-tax profit to £898 million for the year to March 15th, investors responded positively.

Sainsbury's made £772 million in the previous 12 months, so the increase in its performance in the last year is a significant one and investors have rewarded the firm with a strong gain in its share price on the London Stock Exchange today.

The company said in a statement that it has been able to maintain market share in a "tough retail environment" during the 12-month period, although the financial situation for many members of the public in the UK is still a difficult one.

Customer transactions rocket

Sainsbury's chairman David Tyler revealed that the company has seen its number of customer transactions increase by ten million a week to around 24 million following the arrival of chief executive Justin King, who is leaving his post this summer after ten years at the helm.

"While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously," Mr King said.

In the results, Sainsbury's announced that its annual sales have grown by £10.3 billion to reach £26.4 billion, while the company's underlying pre-tax profit has trebled. The positive news comes only a few weeks after the firm reported its first quarterly fall in like-for-like sales in the last nine years. The data showed that sales were down by more than three per cent in the ten weeks to March 15th. Sainsbury's latest figures show its profit growth is at its slowest point in nine years.

Following the release of today's financial results by the supermarket chain, the share price of Sainsbury's was up by 1.74 per cent at 08:26 BST and still rising.

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