It (Sainsbury's) should be paying out far more of its profits as dividends so the money can be recycled through the markets to engineering companies that are short of cash for investment. That would also ease the temptation for Sainsbury's to invest for the sake of it, perhaps on unprofitable foreign expansion.
We have a very successful operation in the United States called Shaws which last year increased its dollar profits by 48 per cent. We are intending to expand the business and if there are profitable opportunities to do so faster than has been the case, then we would be silly not to take them. Equally, we would never contemplate an investment if we did not think that we could make a satisfactory return.
If engineering companies have similar good opportunities for expansion then it should be perfectly easy for them to raise the necessary finance.
J Sainsbury plc
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