Sainsbury J

Website: Sainsbury J
Index: FTSE 100
EPIC: SBRY
Supersector: Retail
Sector: Food and Drug Retailers
Subsector: Food Retailers and Wholesalers
Market Cap: £6.94B
Payout Frequency: Semi-Annual

Sainsbury J Dividend Analysis and Summary

Key Dividend Details

Proposed final dividend: 9.6p per share (FY25/26 final; down 1.0% vs 9.7p last year)
Total ordinary dividend for FY25/26: 13.7p per share (up 0.7% YoY; interim 4.1p)
Special dividend paid during FY25/26: 11.0p per share (separate from ordinary dividend)
Ex-dividend date: 04/06/2026
Record date: 05/06/2026
Payment date: 10/07/2026
Dividend cost: c.£214m for the proposed final; ordinary cash dividends paid in the year: £316m
DRIP election deadline: 19/06/2026

Context and Capital Returns

Share buybacks: £250m completed in FY25/26 (core £200m + £50m incremental); plan to buy back £300m in FY26/27 (core £200m + extra £100m from bank disposal proceeds).
Policy: Board reiterates a progressive dividend policy.

Dividend Sustainability and Growth

Earnings cover: Underlying EPS 22.3p vs total ordinary DPS 13.7p ? payout ratio ~61%, a reasonable level for UK Food Retail.
Cash cover: Retail free cash flow £574m (up 8%); ordinary dividends paid £316m ? FCF cover ~1.8x. FY26/27 guidance: Retail FCF “>£500m”, implying continued cash coverage.
Balance sheet: Non-lease net debt only £203m; lease liabilities £5.54bn; leverage 2.6x net debt/EBITDA within target range (2.4x–3.0x) ? supports ongoing distributions.
Profitability: Retail underlying operating profit £1,025m (stable) amid cost inflation; FY26/27 total underlying operating profit guidance £975m–£1,075m underlines resilience.
Growth trajectory: Ordinary DPS up a modest 0.7%; final trimmed to 9.6p but offset by higher interim. Buybacks add per-share accretion (underlying EPS +3.2% YoY).
Capital allocation: Continued capex £800–£850m planned, but disciplined working capital and cost savings programme underpin cash generation alongside buybacks and dividends.

Structural/Policy Factors Affecting Future Dividends

Financial Services exit largely completed; surrender of banking licence expected by July 2026. Disposal proceeds have funded a £250m special dividend and incremental buybacks, with a further £100m to be returned in FY26/27.
No share consolidation disclosed alongside the special dividend; per-share ordinary dividend policy unchanged (progressive).

Risks and Flags

Macro/operational: Management flags uncertainty from the Middle East conflict; intense grocery competition; wage and operating cost inflation. These could pressure margins and payout growth if prolonged.
Argos exposure: Subdued general merchandise market; lower ASPs weigh on Argos profitability, though volumes improved and cost actions continue.
Pension: IAS 19 surplus reduced to £525m (from £731m); cash contributions remain low (~£27m), not currently a cash risk but monitor volatility.
Contingent liabilities: Ongoing equal pay claims (c. 19,800 claims). No provision booked; outcome uncertain and could be material over time if adverse.
Leases: Significant lease liabilities (£5.54bn) and rent obligations keep fixed charges elevated; fixed charge cover 2.7x (slightly down YoY).

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
05/06/2025	11/07/2025	Final	9.70p	GBX
13/11/2025	19/12/2025	Interim	4.1000p	GBX
13/11/2025	19/12/2025	Special	11.0000p	GBX

Total (Annual Dividends Per Share): 24.80p

Dividend Yield = Annual Dividends Per Share (24.80p) ÷ Share Price (301.4p) = 8.23%

Ex Dividend Date	Payment Date	Type	Amount	Currency
04/06/2026	10/07/2026	Final	9.6000p	GBX
13/11/2025	19/12/2025	Interim	4.1000p	GBX
13/11/2025	19/12/2025	Special	11.0000p	GBX
05/06/2025	11/07/2025	Final	9.70p	GBX
14/11/2024	20/12/2024	Interim	3.90p	GBX
06/06/2024	12/07/2024	Final	9.20p	GBX
09/11/2023	15/12/2023	Interim	3.90p	GBX
08/06/2023	14/07/2023	Final	9.20p	GBX
10/11/2022	16/12/2022	Interim	3.90p	GBX
09/06/2022	15/07/2022	Final	9.90p	GBX
11/11/2021	17/12/2021	Interim	3.20p	GBX
10/06/2021	16/07/2021	Final	7.40p	GBX
12/11/2020	18/12/2020	Interim	3.20p	GBX
12/11/2020	18/12/2020	Special	7.30p	GBX
14/11/2019	20/12/2019	Interim	3.30p	GBX
06/06/2019	12/07/2019	Final	7.90p	GBX
15/11/2018	21/12/2018	Interim	3.10p	GBX
07/06/2018	13/07/2018	Final	7.10p	GBX
16/11/2017	02/01/2018	Interim	3.10p	GBX
11/05/2017	07/07/2017	Final	6.60p	GBX
17/11/2016	04/01/2017	Interim	3.60p	GBX
12/05/2016	08/07/2016	Final	8.10p	GBX
19/11/2015	04/01/2016	Interim	4.00p	GBX
14/05/2015	10/07/2015	Final	8.20p	GBX
20/11/2014	02/01/2015	Interim	5.00p	GBX
14/05/2014	11/07/2014	Final	12.30p	GBX
20/11/2013	03/01/2014	Interim	5.00p	GBX
15/05/2013	12/07/2013	Final	11.90p	GBX
21/11/2012	04/01/2013	Interim	4.80p	GBX
18/05/2011	15/07/2011	Final	10.80p	GBX
17/11/2010	07/01/2011	Interim	4.30p	GBX
19/05/2010	16/07/2010	Final	10.20p	GBX
18/11/2009	08/01/2010	Interim	4.00p	GBX
20/05/2009	17/07/2009	Final	9.60p	GBX
19/11/2008	02/01/2009	Interim	3.60p	GBX
21/05/2008	18/07/2008	Final	9.00p	GBX
21/11/2007	04/01/2008	Interim	3.00p	GBX
23/05/2007	20/07/2007	Final	7.35p	GBX
22/11/2006	05/01/2007	Interim	2.40p	GBX

Year	Interim	Final	Special	Currency	Total	Change
2024	3.900	9.200		GBX	13.100	0.000
2023	3.900	9.200		GBX	13.100	-5.070
2022	3.900	9.900		GBX	13.800	30.180
2021	3.200	7.400		GBX	10.600	0.950
2020	3.200		7.300	GBX	10.500	-6.250
2019	3.300	7.900		GBX	11.200	9.800
2018	3.100	7.100		GBX	10.200	5.150
2017	3.100	6.600		GBX	9.700	-17.090
2016	3.600	8.100		GBX	11.700	-4.090
2015	4.000	8.200		GBX	12.200	-29.470
2014	5.000	12.300		GBX	17.300	2.360
2013	5.000	11.900		GBX	16.900	252.080
2012	4.800			GBX	4.800	-55.550
2011		10.800		GBX	10.800	-25.510
2010	4.300	10.200		GBX	14.500	6.610
2009	4.000	9.600		GBX	13.600	7.930
2008	3.600	9.000		GBX	12.600	21.730
2007	3.000	7.350		GBX	10.350	331.250
2006	2.400			GBX	2.400

Number of Shares:

Payment	Paid	Amount
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