September 16, 2019 / 12:24 PM / 3 months ago

Britain's Asda profit rises in year targeted by Sainsbury's

FILE PHOTO: Fresh fruit is displayed at an Asda store in High Wycombe, Britain, February 8, 2017. REUTERS/Eddie Keogh

LONDON (Reuters) - Asda, the British supermarket arm of U.S. retail giant Walmart (WMT.N) that is considering a future UK stock market listing, saw its profit increase 9.2% in 2018 - a year when it was unsuccessfully targeted for takeover by rival Sainsbury’s.

Sainsbury’s (SBRY.L) 7.3 billion agreed bid for Asda was blocked by Britain’s competition regulator in April, a full year after it was launched. Walmart said in May it would instead look at an initial public offering for Asda.

Accounts filed on Monday showed Asda’s operating profit was 803.2 million pounds in the year to Dec. 31, on revenue up 3.1% to 22.92 billion pounds. As was the case in 2017, no dividend was paid to Walmart.

Under Chief Executive Roger Burnley, Asda is following a strategy focused on lower prices to narrow the gap with the discounters, a step-up in innovation in own-brand products, and better store environments and product availability, along with improvements in its e-commerce operations and use of technology.

Burnley told Reuters in May the timescale for a possible flotation was two to three years.

Last month Asda reported a small rise in underlying sales for the second quarter of its 2019 year. It said uncertainty surrounding Brexit was affecting its customers.

Separately on Monday the British arm of German discount supermarket group Aldi reported a 26% fall in 2018 operating profit.

Reporting by James Davey; editing by David Evans

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