COMPANY APPRAISAL AND INVESTMENT PROPOSAL

Company Appraisal and Investment Proposal

Company Appraisal

Introduction

J Sainsbury plc was founded in the year 1869. It today operates around 1000 stores and 440 convenience stores. It also owns a bank in partnership with the Lloyds banking group. It is also into two housing joint ventures with the British company plc and the security group plc. The company is listed on the London stock exchange and its headquarter is in London. The company has an employee base of around 148,400 people out of which 100,300 are part time workers. In 2011 the company recorded revenue of £21,102 million which is around $ 32,748.2 million. In 2012 the company recorded revenue of £22,294 million.

Sainsbury was founded by John James Sainsbury; he opened the first shop in Holborn, London. Thus this retail is the oldest super market chain, which was followed by the Danish Irma which was opened in 1886. In the year 1922 it became the oldest chain, followed by Danish Irma from 1886. In the year1922 it became the largest chain in Britain, and became the leader of the market in the 1980s. Sainsbury`s took over the position in 1995 and ASDA became the second largest in 2003, which relegated the Sainsbury's to third place.

Sainsbury is a large company which has a huge customer base. It satisfies around 21 million customers every week .The group company operating profit increased by 6.9% to 789 million pounds in 2012. It profit came down to 590 million pounds in the year 2012 from 698 million pound in the last year. In retailing segment there are networks of 1000 stores out of these 557 supermarkets. The super markets provide around 30,000 varieties of food and large variety of non - food product and services. It also operates home delivery website which are internet based. The website caters to the need of around 93 of the UK household needs.

Discussion

SWOT Analysis of the Company

The company is into retailing services; it also has business interest in financial services and property investments. It is one of the leading chains in the United Kingdom. The market share of the company in this sector is around 16.1%, with a customer catering of around 21 million customers per week. Sainsbury has strong competitive advantage and favourable market condition in this sector (Bobe, Dragomir 2010, pp 272). Thus it represents a good growth opportunity for the company in the future. The rising cost of labour is affecting the profits and loss statement of the company.

Strengths

Weaknesses

The company has significant market presence in UK

Strong Balance Sheet

The company is geographically concentrated in UK thus any adverse economic situation can be unfavourable to the

The Portfolio of the company are presenting a strong look

The Debt to Equity ratio of the company is high

Although hard times in Europe yet the company has been able to deliver robust Results

 

Opportunities

Threats

It can enter new markets like China and India ,which have good growth opportunity

Labour cost is facing the northern poles

It can cater to the needs of ...