Sainsbury's: new strategic plan shunned by market

(CercleFinance.com) - The new strategic plan unveiled by Sainsbury's received a lukewarm reception on the London Stock Exchange on Wednesday, despite the British retailer's declared focus on growth, cash generation and shareholder remuneration.


The share price was down 3.5% in early trading, making it one of the biggest fallers in the Europe STOXX 600 index.

Sainsbury's, which this morning detailed the financial targets of its new three-year roadmap dubbed 'Next Level Sainsbury's', said it was aiming for an improvement in operating profit thanks to above-market volume growth in food.

The group says it continues to expect free cash flow in its retail business of at least £500m p.a. over 2024-2027, totalling at least £1.6bn over the three years combined.

The supermarket chain has also committed to a 'progressive' dividend policy from the next financial year, to be accompanied by the launch of a £200m share buyback program.

However, UBS analysts consider these targets insufficient to trigger a significant upward revision of consensus forecasts.

The share price, which has fallen almost 10% since the start of the year, is however pretty flat (+1.5%) over the past 12 months.


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