J Sainsbury made an underlying profit before tax of £251 million in the 28 weeks to 23 September, 9% lower than the year before as a result of wage cost inflation, price investment and the consolidation of Argos' first half losses. Group sales rose 17% to £16.3 billion, reflecting the consolidation of Argos, but like-for-like sales (excluding fuel) rose by just 1.6%. Underlying earnings per share dropped by 22%, reflecting a full period's dilution impact of new shares issued to Home Retail Group shareholders on acquisition. EBITDA synergies totalled £25 million and the group said it is on track to deliver its £160 million EBITDA synergy target from the Argos acquisition six months ahead of schedule. Statutory profit before tax fell from £372 million to £220 million due to the prior year's £111 million one-off property gain from Nine Elms and a £98 million profit from the sale of the pharmacy business. Groceries online sales increased by 7%, convenience sales by over 8% and clothing sales by almost 7%. Clothing online sales grew by 54%. Sainsbury's Bank registered a 56% growth in total income and 17% increase in underlying operating profit to £34 million, primarily reflecting the full consolidation of Argos Financial Services. Mike Coupe, group chief executive of J Sainsbury, said: "We have delivered a good performance across the Group in the last six months, with more customers choosing to shop at Sainsbury's in the first half than ever before. We are now three years into delivering our differentiated strategy and are seeing clear results." He added: "We have exceeded our cost savings target as a group, saving £100 million this half, which gives us the flexibility to increase pay for our store colleagues and improve our customer offer while delivering returns to shareholders."
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