City Talk
Published:  12 June, 2009

A roundup of financial news from industry players

Qataris search for a solution to Sainsbury's

Sainsbury's is the focus of intense speculation that the Qatari Investment Authority (QIA), which has a share stake of 22% in the retailer - held since its failed attempt to buy the company in 2007 - is searching for ways to restructure ownership of that stake.

Dealers reckon the most likely scenario is that the QIA would put its stake into another vehicle or sell some of its shares to another investor, who could be relied on to back a future bid for Sainsbury's. It is highly improbable that the QIA would place the shares on the market, as the group would realise a massive loss on the investment.


Northern profits fall

Northern Foods' share price fell after the food producer announced a worse-than-expected 5.4% decline in annual profit. Northern has a 16% share of the UK ready-meals market and a 26% share of the chilled and frozen pizza sectors. The company warned of difficult conditions ahead, citing the rising cost of some ingredients and pressure from competitors. Pre-tax profit for the full year fell to £47.5m from £50.1m in the previous year, but at the operating profit level they rose by nearly 9% to £52.7m. Net debt stands at £206.7m - against the company's market price tag of £279m - but the company has a revolving credit facility until 2012. Material costs were 12% higher than last year, with energy costs up 64%. Margins rose to 5.4% from 5.2%.


Booker profits up 30%

Booker, the food cash-and-carry chain, announced a 30% jump in full year pre-tax profits and halved its debt to £24.9m over the year to 27 March. Boss Charles Wilson reckons sales growth will slow over the first quarter of the new financial year following a robust fourth quarter.

Over the year, Booker's sales rose by 3.3% to £3.2bn. Pre-tax profit increased to £47.2m from £36.2m last year. Booker is transferring from the fully quoted stock market to the Alternative Investment Market at the beginning of July.