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SAINSBURY ANNOUNCES INTERIM RESULTS

               SAINSBURY ANNOUNCES INTERIM RESULTS
    LONDON, Nov. 6 /PRNewswire/ -- J Sainsbury PLC today announced its


results for the first half of the year to Sept. 28, 1991.
    Main highlights include:
    -- U.K. sales up by 13.0 percent to 4.2 billion pounds sterling.
    -- Group profit before tax up 19.8 percent to 327.5 million pounds, excluding effects of the rights issue up 16.3 percent.
    -- Fully diluted earnings per share up 15.6 percent.
    -- U.K. supermarkets' and Savacentre's market share up 0.4 percent to 10.2 percent.
                            J SAINSBURY PLC
                          Consolidated Results
                   (Unaudited, in millions of pounds)
     28 weeks ended Sept. 28:      1991         1990     Percent incr.
                                                           (decrease)
    U.K. sales                    4,219.7      3,735.0         13.0
    U.S. sales                       581.3        542.8          7.1
    Group sales                  4,801.0      4,277.8         12.2
    U.K. - Operating profit        312.4        274.0         14.0
         - Operating margin          7.40 pct     7.34 pct
    U.S. - Operating profit         15.0         16.5         (9.0)
         - Operating margin          2.57 pct     3.03 pct
    Group operating profit         327.4        290.5         12.7
    Group interest payable          (0.7)       (17.9)
    Associates                       0.8          0.8
    Group profit before tax        327.5        273.4         19.8
    Taxation                        98.3         88.3
    Group Profit after Tax         229.2        185.1         23.8
    Fully diluted earnings
     per share                      13.53p       11.70p(A)    15.6
    Dividend per share               2.40p       2.076p(A)    15.6
    NOTE:  Sales include VAT and sales taxes.
    (A) -- Restated for rights issue.
    Lord Sainsbury, chairman, commented:
   "Despite the difficult economic climate I am delighted to report a 19.8 percent increase in Group Profit before tax. This represents an increase of 16.3 percent excluding the benefits of the rights issue.
    "Market share for U.K. Supermarkets and Savacentre has increased by 0.4 percent points to 10.2 percent. These results strengthen our position as the U.K.'s leading food retailer.
    "Our successful rights issue, the first in Sainsbury's 122 year history, has built a firm platform to support our future development plans throughout the group."
    Highlights from the First Half
    Sainsbury's supermarkets and Savacentre
    Sales in Sainsbury's supermarkets and Savacentre increased by 12.9 percent including a 7.7 percent contribution from net new selling area. Market share based on U.K. Central Statistical Office figures rose from 9.8 percent to 10.2 percent. Compared to the previous year our price competitiveness strengthened against our principal competitors.
    Excellent cost control has enabled the operating margin to be increased slightly despite the impact of recession and rapidly falling food price inflation.  Improvements in logistical systems have reduced costs and stock levels. Our product range has continued to widen and we have benefited from further trading up.
    Eleven new supermarkets have been opened in the first half bringing the total to 307 supermarkets and 9 Savacentres.  A further 10 supermarkets will open in the second half resulting in a net increase of 9.8 percent for the year in U.K. supermarkets' sales area.
    On October 15 we opened our largest supermarket at Hedge End, Southampton on a linked site with Marks and Spencer.  This is already amongst the company's top performing stores.
    Homebase
    Homebase increased sales by 19.3 percent and operating profit by 38.3 percent to 8.8 million. Market share rose by 0.7 percent points to approximately 8.4 percent.  This performance reflects the success of the Homebase formula and its growing reputation amongst customers. Three stores were opened in the first half and a further three will open by the year end.
    Shaw's
    Although Shaw's continues to be affected by severe recession in New England, sales rose by 5 percent to US$991.4 million and market share was maintained. Operating profit fell by 10.5 percent to $25.6 million. Management is currently implementing a program of cost reduction which will reduce costs significantly in future years.
    Capital Investment
    Group capital expenditure was 454 million pounds in the first half, of which over 80 percent was on U.K. Supermarket development.  We expect to invest a further 430 million pounds in the remainder of the year.  We intend to continue to increase sales area by an average of 8 percent per annum and our forward openings program is one of the strongest we have had, extending well into 1994.
    Rights Issue
    The first rights issue in Sainsbury's history proved to be well timed and popular with 98 percent of shareholders taking up their rights.  The 489 million pounds raised provides a secure base to finance our development programs throughout the group.
    Savings in group interest payable as a result of the rights issue totalled 9.5 million pounds in the first half. Excluding this benefit, Group Profit Before Tax increased by 16.3 percent.
     SCRIP' Dividend
    Over 25 percent of shareholders chose the scrip dividend option offered with last year's final dividend.  We are again offering this option to shareholders in respect of their interim dividend.
    NOTES TO THE RESULTS:
    1.  U.K. Sales and Operating Profit (in millions of pounds):
    U.K. Sales:                         1991       1990     Percent
                                                           increase
    - Sainsbury's and Savacentre      4,064.6    3,600.6     12.9
    - Homebase                          150.0      125.8     19.3
    - Haverhill Meat Products*            5.1        8.6    (41.1)
    Total                             4,219.7    3,735.0     13.0
    U.K. Operating Profit:
    - Sainsbury's and Savacentre        303.7      267.7     13.4
    - Homebase                            8.8        6.4     38.3
    - Haverhill Meat Products            (0.1)      (0.1)      --
    Total                               312.4      274.0     14.0
    U.K. Operating Margins:
    - Sainsbury's and Savacentre        7.47 pct   7.43 pct
    - Homebase                          5.86 pct   5.05 pct
    (A) -- Comprises external sales only. In September 1990 Haverhill Meat Products sold the assets of its subsidiary Palethorpes Limited.
    2.  U.S. Sales and Operating Profit (in millions of US$)
                                     1991      1990   Percent increase
    U.S. Sales                      991.4     943.9         5.0
    U.S. Operating profit            25.6      28.6       (10.5)
    U.S. sales and U.S. operating profit have been converted at an average exchange rate for the period of 1 pound equals $1.71 (1990: 1 pound equal US$1.74).
    3.  Group sales include VAT and U.S. sales taxes of $260.9 million (1990: $199.1 million).
    4.  Group interest capitalized during the period before deducting tax relief was $33.4 million (1990: $27.1 million).
    5.  The taxation charge for the first half of last year has been adjusted to reflect the actual rate of taxation on the full year's profit.  For the first half of the current year the tax charge is based on the estimated tax charge for the full year.
    6.  An interim dividend of 2.40p per share (1990: 2.076p) has been declared by the directors which, together with its associated tax credit, is equivalent to a gross dividend of 3.20p per share.  This dividend will be paid on Jan. 20, 1992 to shareholders on the register of members at the close of business on Nov. 21, 1991.
    7.  The profit retained after minority interests of 2.3 million pounds (1990: 0.2 million pounds) and dividends of 42.1 million pounds (1990: 32.0 million pounds) is 184.8 million pounds (1990: 152.9 million pounds).
    8.  Earnings per share (undiluted) of 13.76p (1990: 12.04p) increased by 14.3 percent.
    9.  The abridged profit and loss statements for the 28 weeks to Sept. 28, 1991 and Sept. 29, 1990 are unaudited.  The foregoing financial information does not amount to full accounts within the meaning of Section 240 of the U.K. Companies Act 1985 (as amended).
    This interim report is to be sent to shareholders.  Copies are also available from the Company Secretary, at the registered office, Stamford House, Stamford Street, London SE1 9LL.
    -0-         11/6/91
    /CONTACT:  Christopher Leaver of J Sainsbury PLC, in London: 44-71-921-6577 or 44-71-921-6000/ CO:  J Sainsbury PLC ST: IN:  REA SU:  ERN TS -- NY008 -- 1534 11/06/91 08:30 EST
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Date:Nov 6, 1991
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