Interim Results

Sainsbury(J) PLC
22 November 2000


J Sainsbury plc - Interim Results 2000/2001
28 weeks ended 14 October 2000

Highlights

- Group sales up 7.7% to £9.8 billion

- Like-for-like sales in Sainsbury's Supermarkets up 2.4%

- Underlying Group PBT of £300 million

- Strong profit growth of 30.9% in Shaw's including Star Markets

- Interim dividend remains unchanged at 4.02p per share


Sir Peter Davis, Group Chief Executive said:

'These results are very much in line with our expectations and where we
indicated they would be in May at the time of our preliminary results as we
move through the first stages of our three year transformation programme
within Sainsbury's Supermarkets.

'Like-for-like sales in Sainsbury's Supermarkets are up 2.4% - a significant
improvement on our performance in the first half of last year.

'Customers are responding very positively to our renewed focus on quality and
range.  We've launched 350 products in our new Taste the Difference range with
which we won eight Supermarketing product awards last week.  We were also
voted Organic Supermarket of the Year by You magazine.   

'We're also improving our stores and have opened seven supermarkets, five
Local stores and extended thirteen existing stores to high standards.  I am
delighted to announce a stepping up of our store improvement programme next
year.  Our aim is to improve between 100 and 150 stores by extension,
refurbishment or upgrade.

'We have achieved this measurable improvement in our products and stores
whilst implementing the first steps of our transformation programme.   We will
deliver substantial cost efficiencies of around £600 million per annum over
the next three years and aim to generate operating margins comparable with
leaders in the industry by the end of this programme.

'Sainsbury's Bank has been successful in delivering a more profitable mix of
products and its underlying profits have increased over fivefold. 

'We are very pleased with Shaw's results: its profits are up 30.9% to $83m
reflecting benefits from our acquisition of Star Markets.  Today we have
announced an important infill acquisition of 18 Grand Union stores in New
England which will boost our strong regional position.  This is expected to be
completed in January 2001.  Both Shaw's and Sainsbury's Supermarkets are
benefiting from exchanging successful ideas and concepts.

'Homebase profits before e-commerce costs are up a healthy 7.3% with strong
like-for-like sales growth in the first half of 8.3%.  The Homebase strategic
review is now progressing well, although taking longer than we originally
expected, and we are in advanced negotiations regarding the sale of the
business.'


Outlook

'We are managing significant change at pace.   In Sainsbury's Supermarkets we
are on track to a turnaround in profitability.  We are confident that we are
making good progress towards our aim, stated at the time of preliminary
results last May, of stabilising underlying Group profits before tax and
e-commerce this year.'

Financial Results


                                         2001        2000        Change %
Turnover inc VAT (£m)                   9,754       9,053         7.7
                     
Underlying PBT before e-commerce (£m)*    323         366       -11.7
                     
Underlying PBT (£m)*                      300         361       -16.9
                     
Underlying earnings per share (p)*       10.6        12.8       -17.2
                     
Interim dividend per share (p)           4.02        4.02          -
                     
* Before amortisation of goodwill, exceptional costs and non-operating items  
 
                 
Group turnover increased by 7.7% to £9,754 million reflecting good sales
growth across the Group coupled with the benefit of the acquisition of Star
Markets.

Underlying Group pre tax profit before e-commerce was 11.7% lower at £323
million.  Underlying earnings per share decreased in line with underlying pre
tax profit by 17.2% to 10.6 pence per share.  

The Directors propose an unchanged interim dividend of 4.02 pence per share
(1999: 4.02p) to be paid on 12 January 2001 to shareholders on the register at
the close of business on 8 December 2000.


UK Supermarkets

                                 Including Petrol           Excluding Petrol  
                               Q1       Q2       H1       Q1      Q2      H1
                                          
Total sales growth %          5.5      4.5      5.0      3.7     2.9     3.3
Less:net new space added %   (2.4)    (2.7)    (2.6)    (2.1)   (2.3)   (2.3)
Like-for-like sales growth %  3.1      1.8      2.4      1.6     0.6     1.0
Easter adjustment %          (0.9)     n/a     (0.4)    (0.8)    n/a    (0.3)
Like-for-like sales growth 
(adj) %                       2.2      1.8      2.0      0.8     0.6     0.7


Sales in Sainsbury's Supermarkets increased by 5.0% in the first half to £7.3
billion.  Like-for-like sales growth in the first half was 2.4%, an
encouraging improvement on the negative like-for-like figures reported in the
first half last year.  The second quarter was below the first at 1.8%, which
directly compares with 2.2% for Q1.  Underlying food deflation eased during
the second quarter, averaging -0.2% and volume growth was held back in the
short term by the removal of inappropriate non-food items and extension and
refurbishment activity in a number of important trading stores.

We have laid the foundations for our Quality programme and we are very
encouraged by customers' reaction to our Taste the Difference range.

Operating profit in the first half, before charging e-commerce costs of £16.4
million, was £255.5 million, a decline of 23.1%, in line with our
expectations.  The operating margin was 3.5%.  This was primarily as a result
of higher operating costs which arose from a combination of differential
inflation and investment in customer service and availability.

During the first half we opened seven stores totalling 191,700 sq ft of sales
area plus five Local stores.  In the second half we plan to open a further six
stores totalling 92,600 sq ft.  We also extended 13 stores adding 148,600 sq
ft of sales area and are on track to complete this year's programme of 35
extensions adding 441,000 sq ft of sales area.


Sainsbury's Bank

Sainsbury's Bank reported an operating profit of £8.5 million for the half
year, an improvement of £7.6 million on 1999/00.  This included a credit of
£3.5 million relating to VAT.  These results reflect increased focus on the
more profitable loans business together with the launch of a number of new
products including the new Visa card and the national launch of our car
scheme, Drive.


Homebase
                                      Q1       Q2       H1
                     
Total sales growth %                14.7      7.4     10.8
Less:  net new space added %        (2.4)    (2.6)    (2.5)
Like-for-like sales growth %        12.3      4.8      8.3
Easter adjustment %                 (5.9)     n/a     (2.7)
Like-for-like sales growth (adj) %   6.4      4.8      5.6


Homebase sales growth in the first half was 10.8%.  Like-for-like sales growth
was 8.3% and adjusting for Easter was 5.6%.  In the second quarter
like-for-like growth was strong at 4.8% despite the impact of the petrol
crisis which we estimate at 1.3 percentage points. 

The large store opening programme is progressing well with three stores opened
in the first half in Wrexham, Braehead and Ipswich compared with one in the
comparative period.  Three are planned to open in the second half in
Kidderminster, Bristol and Norwich.  We are seeing very successful results
from the large store format with sales for new openings above our
expectations.

Homebase operating profit in the first half was up 7.3% to £39.8 million
before charging e-commerce costs of £6.3 million.  This period included a
benefit from Easter trading not included in the comparative half but also
included higher development and pre-opening costs associated with the roll out
of the large stores.  Adjusting for Easter and the increased development costs
resulted in a profit increase of 5.0%.


Shaw's
                                      Q1       Q2       H1
                     
Total sales growth %                30.1     (3.8)     8.2
Less:  net new space added %       (26.7)     2.7     (7.7)
Like-for-like sales growth %         3.4     (1.1)     0.5
Easter adjustment %                 (2.1)     n/a     (0.8)
Like-for-like sales growth (adj) %   1.3     (1.1)    (0.3)


Shaw's reported sales growth in the first half of 8.2% to $2,173 million with
Star Markets contributing $477 million.  Shaw's like-for-like sales growth was
0.5% in the first half, below our expectations.  Growth in the second quarter
was below the first although market share was stable.  This was the first
quarter of full inclusion of Star Markets, whose sales were held back by a
below par holiday season in the Greater Boston area and supply chain pressures
as a result of the integration of Star Markets.

A rapid integration of Star Markets back office functions and the closure of
its Norwood depot have achieved synergies quickly.  The synergies, along with
tight cost control in Shaw's and a continuing improvement in the performance
in Connecticut, resulted in operating profit growth in Shaw's of 30.9% to $83
million. 

Shaw's is further strengthening its regional position in the New England
market through the proposed infill acquisition of 18 Grand Union stores. 
These stores will strengthen Shaw's position in Vermont and Connecticut and
have estimated annual revenues of $150 million.  This acquisition is not
expected to complete until January 2001.

On 15 October, Shaw's launched a loyalty card based on the Star Markets
Advantage Card.  Already, over two thirds of Shaw's transactions, representing
over 86% of sales, are traded on the card.


Sainsbury's Egypt

Sainsbury's Egypt generated sales of £40.5 million and an operating loss of
£10.2 million in the first half.   Losses were higher than expected as a
result of delayed store openings due to local licensing difficulties and more
recently through a deterioration of the trading environment in the Middle
East.  As a result, we are concerned about our investment in Egypt, which is
currently over £100 million.  In March 1999 we acquired 25.1% of the share
capital for £11 million, a further 55% in October 1999 for £40 million with
the remainder of the investment being to fund the development of the business.
Although this market may have attractive longer term growth opportunities, we
are cutting back our development programme further and reviewing all strategic
options for reducing our financial exposure to this region.


Finance

In the first half, we realised an exceptional profit on property items of £46
million, primarily the profit generated on the sale and leaseback of 10 UK
supermarkets.

In the second half there are likely to be further exceptional items. 
Sainsbury's Supermarkets will be accelerating its business transformation
programme, which we estimate will generate savings of £600 million per annum
by the end of the three year programme.  This will have associated
reorganisation costs which are currently estimated to be in the region of £75
million in the second half.

The tax charge for the first half is based on the estimated effective
underlying tax rate for the full year of 32.0% (1999 32.0%).
 
Net debt increased by £194 million in the first half to £1,458 million with
gearing at 30%. Operating cash flow generated by the business remained strong
at £378 million, an increase of £56 million over last year.  After dividends,
net interest and tax, cash flow was £71 million.  Payments for fixed assets
during the half year amounted to £477 million being partly offset by proceeds
from the sale of fixed assets of £333 million including the sale and leaseback
of ten UK supermarkets.  

Group capital expenditure for the half was £476 million including £359 million
for Sainsbury's Supermarkets.  We forecast Group capital expenditure for the
year to be in the region of £950 million. 


Group profit and loss account
                                        28 weeks   28 weeks   52 weeks 
                                           to 14      to 16       to 1
                                         October    October      April 
                                            2000       1999       2000 
                                      (unaudited)(unaudited)* (audited)       
                                           Total      Total      Total
                                 Note         £m         £m         £m        
Turnover including VAT and 
sales taxes                         2      9,754      9,053     17,414 
VAT and sales taxes                         (637)      (585)    (1,143)
Turnover excluding VAT and 
sales taxes                                9,117      8,468     16,271 
Cost of sales and administrative 
expenses                                  (8,777)    (8,060)   (15,604)
Amortisation of goodwill                      (8)         -        (11)
Exceptional operating costs         3          -        (55)      (112)
Year 2000 costs                                -         (4)        (6)
Profit sharing                                (1)       (10)       (10)
Total cost of sales and 
administrative expenses                   (8,786)    (8,129)   (15,743)
                                                                              
     
Operating profit                             331        339        528 
Associated undertakings - share 
of profit                                      -         (1)         1 
Profit on sale of properties        3         46          -         52 
Profit on ordinary activities 
before interest                              377        338        581 
Net interest payable                         (39)       (32)       (72)
Profit on ordinary activities 
before tax                                   338        306        509 
Underlying profit before tax**               300        361        580 
Amortisation of goodwill                      (8)         -        (11)
Exceptional operating costs                    -        (55)      (112)
Profit on sale of properties                  46          -         52 
Tax on profit on ordinary  
activities                                   (99)       (96)      (162)
Profit on ordinary activities 
after tax                                    239        210        347 
Equity minority interest                       -          -          2 
Profit for the financial period              239        210        349 
Dividends                                    (77)       (77)      (274)
Retained profit                              162        133         75 
                                                               
                                                               
Earnings per share                  4       12.6p      10.9p      18.3p
Underlying earnings per share**     4       10.6p      12.8p      20.5p
Diluted earnings per share          4       12.6p      10.9p      18.2p
Underlying diluted earnings 
per share**                         4       10.6p      12.8p      20.5p
Dividend per share                           4.02p      4.02p     14.32p


All income was derived from continuing operations.  No operations were
discontinued in the period.  
*   Restated for change in accounting policy for software (see note 1)
**  Before amortisation of goodwill, exceptional operating costs and
non-operating items


Group statement of total recognised gains and losses

                                        28 weeks   28 weeks   52 weeks 
                                           to 14      to 16       to 1
                                         October    October      April 
                                            2000       1999       2000 
                                      (unaudited)(unaudited)* (audited)
                                              £m         £m         £m

Profit for the financial period              239        210        349 
  Currency translation differences 
  on foreign currency net investments         15         (7)         3 
Total recognised gains and losses 
relating to the financial period             254        203        352 


There is no material difference between the above profit for the period and
the historical cost equivalent.

* Restated for change in accounting policy for software (see note 1)


Reconciliation of movements in equity shareholders' funds

                                        28 weeks   28 weeks   52 weeks 
                                           to 14      to 16       to 1
                                         October    October      April 
                                            2000       1999       2000 
                                      (unaudited)(unaudited)* (audited)
                                              £m         £m         £m
       
Profit for the financial period              239        210        349 
  Equity dividends                           (77)       (77)      (274)
                                             162        133         75 
  Currency translation differences            15         (7)         3 
  New share capital subscribed for 
  less expenses of capital issues              5          9         21 
  Amounts deducted in respect of 
  shares issued to the QUEST                   -         (1)        (1)
Net movement in equity shareholders' funds   182        134         98 
  Opening equity shareholders' funds       4,742      4,644      4,644 
Closing equity shareholders' funds         4,924      4,778      4,742 

* Restated for change in accounting policy for software (see note 1)


Group balance sheet

                                      14 October  16 October     1 April 
                                            2000        1999        2000 
                                 Note (unaudited) (unaudited)*  (audited)     
                                              £m          £m          £m      
Fixed assets                              
  Intangible assets                          331         223         316 
  Tangible assets                          6,583       6,614       6,563 
  Investments                                139          50          98 
                                           7,053       6,887       6,977 
Current assets                            
  Stocks                                   1,092       1,069         986 
  Debtors                                    327         291         320 
  Investments                                 17          19          18 
  Sainsbury's Bank                  5      1,759       1,682       1,718 
  Cash at bank and in hand                   498         364         533 
                                           3,693       3,425       3,575 
Creditors: due within one year                            
  Sainsbury's Bank                  5     (1,638)     (1,587)     (1,607)
  Other                                   (2,914)     (3,086)     (3,113)
                                          (4,552)     (4,673)     (4,720)
Net current liabilities                     (859)     (1,248)     (1,145)
Total assets less current 
liabilities                                6,194       5,639       5,832 
Creditors: due after one year             (1,182)       (804)       (993)
Provisions for liabilities and 
charges                                      (39)         (7)        (48)
Total net assets                           4,973        4,828      4,791 

Capital and reserves                            
  Called up share capital                    482          480        481 
  Share premium account                    1,383        1,368      1,379 
  Revaluation reserve                         39           38         39 
  Profit and loss account                  3,020        2,892      2,843 
Group shareholders' funds                  4,924        4,778      4,742 
  Equity minority interest                    49           50         49 
Total capital employed                     4,973        4,828      4,791 


* Restated for change in accounting policy for software (see note 1)


Group cash flow statement

                                              28 weeks   28 weeks   52 weeks 
                                                 to 14      to 16       to 1
                                       Note    October    October      April 
                                                  2000       1999       2000 
                                            (unaudited)(unaudited)* (audited) 
                                                    £m         £m         £m  

Net cash inflow from operating 
activities                                6        378        322        838 
Returns on investments and servicing
of finance                               
  Interest received                                 22         15         46 
  Interest paid                                    (63)       (35)      (109)
  Interest element of finance lease 
  rental payments                                  (10)        (9)       (17)
Net cash outflow from returns on 
investments and servicing of finance               (51)       (29)       (80)
Taxation                                           (59)        (7)      (218)
Capital expenditure and financial 
investment                            
  Payments to acquire tangible fixed assets       (475)      (332)      (755)
  Receipts from sale of tangible fixed assets      333         24        385 
  Purchase of own shares                           (20)       (21)       (68)
  Payments to acquire intangible assets             (2)        (1)        (6)
Net cash outflow from capital expenditure 
and financial investment                          (164)      (330)      (444)
Acquisitions and disposals                            
  Acquisition of and investment in 
  subsidiary undertakings                 8          -       (225)      (293)
  Investment in Sainsbury's Bank by 
  minority shareholder                               -          -          4 
  (Investment in)/proceeds from disposal
  of other fixed asset investments                 (21)         1         (1)
Net cash outflow from acquisitions 
and disposals                                      (21)      (224)      (290)
Equity dividends paid                             (197)      (217)      (294)
Net cash outflow before management of 
liquid resources and financing                    (114)      (485)      (488)
Management of liquid resources                       -          2          - 
Financing                            
  Issue of ordinary share capital                    5          3         16 
  (Decrease)/increase in short-term 
  borrowings                                      (180)        75         79 
  Increase/(decrease) in long-term 
  borrowings                                       136         (4)       173 
  Capital element of finance lease 
  rental payments                                   (3)        (3)        (4)
Net cash (outflow)/inflow from financing           (42)        71        264 
Decrease in cash in the period                    (156)      (412)      (224)


Reconciliation of net cash flow to 
movement in net debt
Decrease in cash in the period                    (156)      (412)      (224)
Cash outflow/(inflow) from increase 
in debt and lease financing                         47        (68)      (248)
Debt in subsidiaries acquired                        -        (72)       (76)
New finance leases                                 (28)        (4)        (7)
Currency translation difference                    (57)        22         (5)
Movement in net debt in the period        7       (194)      (534)      (560)
Net debt at the beginning of the period   7     (1,264)      (704)      (704)
Net debt at the end of the period         7     (1,458)    (1,238)    (1,264)

* Restated for change in accounting policy for software (see note 1)


Notes to the Results

1. Accounting policies and financial period
The financial information has been prepared using the accounting policies set
out in the 2000 Annual Accounts.  

The financial information for the 28 weeks to 16 October 1999 has been
restated for the change in accounting policy for computer software costs as
outlined in the 2000 Annual Accounts.  From 4 April 1999, costs incurred in
acquiring and developing computer software are now capitalised as fixed assets
where the software supports a significant business system and the expenditure
leads to the creation of an identifiable durable asset.  It is not practicable
to restate years prior to 3 April 1999.  Expenditure on projects which has
been capitalised as fixed assets in the 28 weeks to 16 October 1999 amounted
to £11 million and depreciation where the software assets were already in use
amounted to £2 million so increasing operating profit by £9 million.  

2. Group turnover and operating profit
Set out below are the Group turnover and operating profit before amortisation
of goodwill, Year 2000 costs, exceptional costs and profit sharing.



                                 28 weeks   28 weeks                52 weeks 
                                    to 14      to 16                    to 1
                                  October    October                   April 
Turnover (£ million)                 2000       1999                    2000 
                               (unaudited)(unaudited)    Change % (unaudited) 
     
Sainsbury's Supermarkets          7,267.1    6,924.2          5.0   13,266.7 
Homebase                            862.8      778.9         10.8    1,428.1 
Sainsbury's Bank                     75.4       64.9         16.2      136.0 
JS Developments                      64.2       38.2         68.1      165.2 
Other                                 0.0        0.0            -        0.1 
UK total                          8,269.5    7,806.2          5.9   14,996.1 
Shaw's Supermarkets               1,443.8    1,246.4         15.8    2,394.1 
Sainsbury's Egypt                    40.5          -            -       24.3 
Overseas total                    1,484.3    1,246.4         19.1    2,418.4 
TOTAL                             9,753.8    9,052.6          7.7   17,414.5 

Operating profit (£ million)                                                 
Sainsbury's Supermarkets*           239.1*     327.1        -26.9      521.8 
Homebase*                            33.5*      37.1         -9.7       57.0 
Sainsbury's Bank                      8.5        0.9        844.4        2.9 
JS Developments                      13.1        3.2        309.4       16.4 
Other                                 0.7        0.3            -       (0.5)
UK total                            294.9      368.6        -20.0      597.6 
Shaw's Supermarkets                  55.1       39.3         40.2       80.0 
Sainsbury's Egypt                   (10.2)         -            -      (10.8)
Overseas total                       44.9       39.3         14.2       69.2 
TOTAL                               339.8      407.9        -16.7      666.8 

*The operating profit set out above is after deducting all e-commerce
expenditure including home shopping:

                                     28 weeks to 14 October 2000              
                        Pre e-commerce  % change  E-commerce  Post e-commerce 
                              £m                      £m             £m 
Sainsbury's Supermarkets   255.5        -23.1%     (16.4)         239.1
Homebase                    39.8          7.3%      (6.3)          33.5


The charge for e-commerce including home shopping in the 28 weeks to 16
October 1999 was £5.0 million (all Sainsbury's Supermarkets) and in the 52
weeks to 1 April 2000 was £19.7 million and £7.6 million for Sainsbury's
Supermarkets and Homebase respectively.

US sales and operating profit have been translated at an average exchange rate
for the period of £1 = $1.51  (1999/00 28 weeks : £1 = $1.61; 52 weeks : £1 =
$1.61).

                                 28 weeks   28 weeks                52 weeks 
                                    to 14      to 16                    to 1
                                  October    October                   April 
                                     2000       1999     Change %       2000 
Shaw's sales and operating profit 
(including Star Markets)                    
Sales ($ million)                 2,173.0    2,007.4          8.2    3,856.7
Operating profit ($ million)         83.0       63.4         30.9      128.9


       
3. Exceptional items

3.1 Exceptional operating items

There were no exceptional costs charged in the 28 weeks to 14 October 2000. 
The exceptional costs charged in the 52 weeks to 1 April 2000, some of which
were incurred at the interim stage, relate to the following:
       
                                             28 weeks   28 weeks   52 weeks 
                                                to 14      to 16       to 1
                                              October    October      April 
                                                 2000       1999       2000 
                                           (unaudited)(unaudited)  (audited)  
                                                   £m         £m         £m  
Sainsbury's Supermarkets                            -         27         39 
Homebase                                            -         16         49 
Shaw's Supermarkets                                 -         12         24 
Exceptional operating costs                         -         55        112 

The costs incurred in Sainsbury's Supermarkets were the result of simplifying
central and store operations, streamlining the store management structure and
integrating the Savacentre business into Sainsbury's Supermarkets.  The costs
incurred in Homebase resulted from closing 99 kitchen studios, simplification
of operations with associated severance costs, and restructuring costs at
Hampden which was acquired during the year.  The costs at Shaw's related to
the integration of the acquired Star Markets business.

3.2 Exceptional non-operating items

Profits on sales of properties were as follows:

                                             28 weeks   28 weeks   52 weeks 
                                                to 14      to 16       to 1
                                              October    October      April 
                                                 2000       1999       2000 
                                           (unaudited)(unaudited)  (audited)  
                                                   £m         £m         £m 
Sale and leaseback of UK supermarket freeholds     51          -         82 
Disposal of Shaw's Supermarkets shopping centres    -          -        (15)
Other                                              (5)         -        (15)
                                                   46          -         52 

4. Earnings per share

Earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in
issue during the period, excluding those held by the Employee Share Ownership
Trusts which are treated as cancelled.

For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares.  These represent share options granted to employees where the exercise
price is less than the average market price of the Company's ordinary shares
during the period to 14 October 2000.

                                             28 weeks   28 weeks   52 weeks 
                                                to 14      to 16       to 1
                                              October    October      April 
                                                 2000       1999       2000 
                                              million    million    million
Weighted average number of shares in issue    1,901.0    1,917.2    1,913.5
Weighted average number of dilutive share 
options                                           8.5        6.5        4.1
Total number of shares for calculating 
diluted earnings per share                    1,909.5    1,923.7    1,917.6


The alternative measure of earnings per share is provided because it reflects
the Group's underlying trading performance by excluding the effect of
amortisation of goodwill, exceptional costs and non-operating items.

                                   28 weeks         28 weeks         52 weeks 
                                      to 14            to 16             to 1
                                    October          October            April 
                                       2000             1999             2000 
                                        Per              Per              Per
                                      share            share            share
                           Earnings  amount  Earnings amount  Earnings amount 
                                 £m   pence         £m pence        £m  pence
Earnings per share              239    12.6        210  10.9       349   18.3 

Amortisation of goodwill          8     0.4          -     -        11    0.6 
Exceptional costs                 -       -         37   1.9        84    4.4 
Non-operating items             (46)   (2.4)         -     -       (52)  (2.8)
Underlying earnings per share 
before amortisation of goodwill, 
exceptional costs and 
non-operating items             201    10.6       247  12.8        392   20.5 

Diluted earnings per share      239    12.6       210  10.9        349   18.2 

Underlying diluted earnings 
per share before amortisation 
of goodwill, exceptional costs 
and non-operating items         201    10.6       247  12.8        392   20.5 


5. Current assets and creditors of Sainsbury's Bank

                                         14 October   16 October      1 April 
                                               2000         1999         2000
                                                 £m           £m           £m
Current assets                        
Treasury bills and other eligible bills          62           69           64 
Loans and advances to banks                     434          829          542 
Loans and advances to customers*                729          512          684 
Debt securities                                 500          244          399 
Prepayments and accrued income                   34           28           29 
                                              1,759        1,682        1,718 
Creditors: due within one year                     
Customer accounts                             1,608        1,555        1,590 
Accruals and deferred income                     30           32           17 
                                              1,638        1,587        1,607 


* Loans and advances to customers include £420 million (16 October 1999 - £244
million; 1 April 2000 - £329 million) of loans and advances repayable in more
than one year.  


In addition to the above assets, Sainsbury's Bank had other assets of £5
million at 14 October 2000 (16 October 1999 - £5 million; 1 April 2000 - £5
million) and other liabilities of £6 million (16 October 1999 - nil; 1 April
2000 - £4 million).


6. Reconciliation of operating profit to net cash inflow from operating
activities

                                             28 weeks   28 weeks   52 weeks 
                                                to 14      to 16       to 1
                                              October    October      April 
                                                 2000       1999       2000 
                                                   £m         £m         £m
Operating profit                                  331        339        528 
Depreciation                                      222        211        410 
Amortisation of intangible assets                   8          -         12 
Profit on sale of equipment, fixtures 
and vehicles                                       (1)         -         (4)
Increase in stocks                               (101)      (177)       (86)
Increase in debtors                                (6)       (19)       (47)
(Decrease)/increase in creditors and 
provisions                                        (65)       (34)        39 
(Increase)/decrease in Sainsbury's 
Bank current assets                               (41)        84         48 
Increase/(decrease) in Sainsbury's 
Bank creditors                                     31        (82)       (62)
Net cash inflow from operating activities         378        322        838 


7. Analysis of net debt
                                            Other
                      At 1 April  Cash   non-cash   Exchange  At 14 October
                            2000  flow  movements  movements           2000 
                              £m    £m         £m         £m             £m   
                      
Cash and liquid funds        551   (52)                   16            515
Overdrafts                  (162) (104)                   (1)          (267)
                                  (156)                     
Debt due within 1 year      (689)  180                   (43)          (552)
Debt due after 1 year       (828) (136)                  (16)          (980)
Finance leases              (136)    3        (28)       (13)          (174)
                                    47                                        

Total                     (1,264) (109)       (28)       (57)        (1,458)


8. Acquisitions of and investment in subsidiary undertakings

There were no acquisitions in the 28 weeks to 14 October 2000.

Three companies became subsidiaries during the 52 weeks to 1 April 2000.

                                       Cash       Cash   
                              consideration   balances   Overdrafts
                                 plus costs   acquired     acquired   Total
                                         £m         £m           £m      £m
                             
Star Markets Holdings Inc.             (235)         1            -    (234)
Hampden Group PLC                       (14)         3            -     (11)
Egyptian Distribution Group SAE         (40)         -           (8)    (48)
                                       (289)         4           (8)   (293)


Shaw's Supermarkets acquired Star Markets on 28 June 1999.  Following a public
offer in October 1999, the Group acquired full ownership of Hampden in which
it previously owned 29.2 per cent.  On 20 October 1999, the Group increased
its ownership in Egyptian Distribution Group from 25.1 per cent to 80.1 per
cent.

9. Financial information

The half year interim results are unaudited but have been reviewed by the
auditors.  The financial information presented herein does not amount to full
accounts within the meaning of Section 240 of the Companies Act 1985 (as
amended).  The figures for the 52 weeks to 1 April 2000 have been extracted
from the 2000 Annual Accounts which have been filed with the Registrar of
Companies.  The audit report on the 2000 Annual Accounts was unqualified and
did not contain a statement under Section 237 (2) or (3) of the Companies Act
1985.

The company's results will be published in the Interim Statement which will be
posted to shareholders on 27 November 2000.  Copies will also be available
from J Sainsbury plc, Stamford House, Stamford Street, London SE1 9LL and at
its paying agents Citibank, N.A., 336 Strand, London WC2R 1HB and Chase
Manhattan Bank, Trinity Tower, 9 Thomas More Street, London E1 9YT.


Review report by the Auditors to the Board of
Directors of J Sainsbury plc


Independent Review Report to J Sainsbury plc

We have been instructed by the company to review the financial information set
out on pages 6 to 14 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors.  The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board.  A review consists principally
of making inquiries of management and applying analytical procedures to the
financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.  A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions.  It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance  than an audit.  Accordingly we do not express an audit opinion on
the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 28 weeks
ended 14 October 2000.


PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
1 Embankment Place
London
WC2N 6RH                                                                      
21 November 2000 


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