Sainsbury to Forgo Tax Relief as Earnings Outlook Improves

J Sainsbury Plc said it’s forgoing U.K. tax relief because its outlook for earnings has improved as grocery demand remains strong during pandemic lockdowns.

Sales and profit have been stronger than expected, particularly since the start of the second national lockdowns, and the company forecast adjusted pretax earnings of at least 270 million pounds ($362 million) in the year to March.

The company said it’s forgoing about 410 million pounds of business rates relief this fiscal year, and it will prioritize the use of excess cash for dividends.

Tesco Plc set a precedent for the U.K. grocery industry Wednesday by saying it will repay 585 million pounds of tax relief.

Sainsbury also repeated a forecast for adjusted pretax profit to exceed 586 million pounds in fiscal 2022.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.