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As expected, Sainsbury’s (SBRY) has recorded its first annual loss in a decade after property writedowns and other one-off charges took their toll.

The supermarket’s underlying profit before tax marginally beat expectations, falling 14.7% to £681m in the year to 14 March. However, £753m of charges excluded from the underlying results – including a £628m property writedown taken in November last year – meant Sainsbury’s recorded a loss before tax of £72m.

Underlying Group sales (inc VAT) were down by 0.9% to £26.1bn, while like-for-like sales (ex fuel) fell 1.9% during the year.

Chief executive Mike Coupe said: “The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share. However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.

“We also have significant opportunities to grow our business. Clothing, general merchandise and financial services have all performed well over the past 12 months, as have our convenience and online channels. We have a significant ambition to grow these areas over the coming years.”

Other highlights from the results include its commitment to find operating cost savings of £500m over the next three years, having delivered savings of £140m in 2014/15. Retail capital expenditure was £947m last year, but will be reduced to between £500m and £550m per annum in each of the next three years.

However, Sainsbury’s is increasing its investment in price. In November it committed to invest £150m in price – so far it has invested £50m and expects to invest a further £150m, taking its overall price investment to £200m.

Morning update

Sainsbury’s may have recorded a loss, but investors seem relatively happy. The supermarket has opened 0.6% up at 276.5p this morning.

There’s plenty of other news away from Sainsbury’s this morning. Poundland (PLND) is refusing to give up its fight to acquire 99p Stores, committing this morning to enter a “phase 2” process with takeover watchdog the Competition and Markets Authority. Poundland had the opportunity to press ahead with the phase 2 review, offer remedies at this stage to the CMA or scrap the deal entirely.

Finsbury Food Group (FIF) is back on the acquisition trail after rescuing from administration cake and morning goods manufacturer Johnstone’s Just Desserts. The Grocer broke the news in April that administrator FRP Advisory was seeking a buyer from the business, which employs 148 staff and supplies cakes to national coffee shop chains. Finsbury said this morning: “This proposed acquisition signals the escalation of Finsbury’s entry into the foodservice cake channel and in particular the high growth national coffee shop segment. This is in line with the Group’s channel diversification strategy, indicated at the recent acquisition of Fletcher’s in 2014.”

Finally, Imperial Tobacco (IMT) issued its half year results this morning. Revenues were down 4% to £12.1bn (though tobacco net revenue was up 3% excluding currency impacts). Volumes edged down 1%, but were 5% down on an underlying basis, with the company blaming sales in Iraq which have suffered because of the unstable political situation. However, the firm’s “growth brand” volumes were up 17%. Regulatory approval for its large-scale acquisition of a number of US brands is “still expected in spring 2015”.

Poundland is 0.6% up this morning to 318p after pressing on with its acquisition of 99p Stores, while Imperial Tobacco has rebounded 2% to 3,182p.

Yesterday in the City

The City looked to have picked up rumours that Sainsbury’s full-year earnings would be slightly better than analyst expectations as the supermarket rose 1.2% yesterday to 275p, its highest point since mid-April.

Conversely, rumours of bad news in this morning’s half year numbers for Imperial Tobacco saw its shares plunge 3.4% yesterday to 3,120p. British American Tobacco was also caught up in the sell-off, falling 2.5% to 3,547.5p.

Other notable movers including FTSE 100 bottler Coca Cola HBC (CCH), which was up 3% to 1,417p, while Tesco (TSCO) was up 0.8% to 226.9p. SABMiller (SAB) was down 1.7% to 3,420p and Unilever (ULVR) fell 1.4% to 2,834p.

Overall, the FTSE 100 fell 0.8% to 6,927.6pts, driven down by HSBC’s decision to explore whether to leave the UK for Hong Kong.

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