Somerfield promise on profits

SUPERMARKETS group Somerfield today promised it will meet the City's expectations of about £20m profit for the year just ended, despite a sharp fall in sales growth over the second half.

The £20m profit compares with a loss the previous year of £8m but excludes exceptional items, including £6m to cover costs of refinancing and £2m to cover the closure of one of the group's depots.

Chief executive Alan Smith said sales growth at the Somerfield chain slowed to just 0.1% over the second half, compared with 1.4% for the full year, and to 1.4% at Kwik Save, down from 2.5% for the full year, as the group concentrated on improving margins and profits. He described trading as 'satisfactory and in line with the board's recovery plans'. Smith said more than 40 lenders were replaced with five who provide a revolving credit facility of £100m.