27% Somerfield rise leaves investors cool

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The Independent Online
Maiden results from Somerfield, the supermarket group whose summer flotation was dogged by problems, were yesterday greeted with a cool response from investors and analysts, writes Nigel Cope.

Announcing a 27 per cent rise in half-year profits to pounds 54.6m, Somerfield's chief executive, David Simons, said the group was "delivering the goods". However, analysts pointed to a weak like-for-like sales increase of just 1.7 per cent as evidence that Somerfield remained a weak player in a highly competitive sector. Several downgraded their full-year profits forecasts to around pounds 100m as the shares fell 5.5p to 168.5p.

Though the core Somerfield format has been trading relatively well, with same-store sales 4.3 per cent higher in the period, the old Gateway stores and Food Giant discount format are experiencing sharp sales falls of 5.5 per cent and 6 per cent respectively.

Current trading is also weak with total sales up just 1.2 per cent in the first nine weeks of the second half. The maiden interim dividend was 3.4p.

Investment column, page 21