Sainsbury's set for profits decline

The City predicts that the UK's third biggest grocery chain, which has 597 supermarkets and 707 convenience stores, will post a 17% decline in full-year pre-tax profits to £659 million as sales fall and margins come under pressure.

It recently posted a fourth quarter 1.9% decline in like-for-like sales for the 10 weeks to March 14, compared with a fall of 1.7% in the previous quarter.

To add to Mr Coupe's woes, he has been caught up in a bizarre legal drama in Egypt which saw him sentenced in his absence to two years in jail for a "historic commercial dispute'" dating back 14 years, before Mr Coupe worked for the company.

Earlier this month, the retailer said it would cut 800 department manager and night shift jobs as it becomes the latest supermarket to restructure its operations in the face of tough trading conditions.

Britain's big four grocers - including Tesco, Morrisons and US-owned Asda - are engaged in fierce competition as they scramble for market share, which is being eaten away by discounters Aldi and Lidl.

Last month Mr Coupe said: "Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue."

The full-year results will be the first under Mr Coupe since he succeeded Justin King, who stepped down last year following a successful decade in charge of the supermarket.

Shore Capital analyst Clive Black said: "Sainsbury's has seen a considerable deterioration in its absolute and relative trading performance through 2014/15, which leaves us concerned about its scope to deliver growth in the medium term."

Shares have fallen by almost 20%, compared to a year ago.

Back in November Mr Coupe unveiled a wide-ranging plan to fight back against the discounters, including a £150 million investment in price cuts over the next year and an improvement in the quality of 3,000 own-brand products.

He pointed out that a quarter of its stores have under-used space and over the next five years this will be used to expand its non-food goods and also be given over for in-store concession partnerships.

Sainsbury's will look for cost savings of £500 million over the next three years and will reduce annual capital expenditure to as low as £500 million over the next three years, compared with around £950 million a year since 2012/13. It also warned that its annual dividend payment to shareholders may have to be cut.

Sainsbury's, like the rest of the sector, will have to deal with recent industry figures pointing to signs of a resurgence at Tesco under its new chief executive Dave Lewis.

According to Kantar Worldpanel, the Sainsbury's market share is at 16.4%, behind Asda with 17.1% and Tesco at 28.4%.

BT boss Gavin Patterson is expected to report improved annual profits on Thursday after a busy period which has seen it announce the £12.5 billion takeover of mobile phone operator EE and secure a new round of Premier League TV rights.

The telecoms giant agreed terms on the EE deal with current owners Deutsche Telekom and Orange in February amid a complex round of consolidation in the industry. It will see the German and French firms take stakes of 12% and 4% respectively in BT.

Other deals transforming the sector include Three owner Hutchison Whampoa's £10 billion deal to buy rival O2 from Spain's Telefonica and Sky's plans for its own mobile offering using O2's network.

Analysts see the big players moving towards a ''quad play'' strategy which means they are able to bundle together packages including mobile and fixed line services together with broadband and TV platforms.

BT is focusing on a convergence of fixed and mobile services, with customers seamlessly transferring from their home broadband connection to the EE network.

The enlarged firm will face up against the likes of Virgin Media and TalkTalk which already have ''quad play offerings''.

This year also saw BT agree to pay £960 million to show 42 Premier League games per season for three years starting in 2016/17, up from the £738 million it paid for the current deal to show 38 games per season for three years.

Sky paid more than £4 billion to secure the lion's share of available games in the new deal while BT bought a package including Saturday evening fixtures. It currently mainly screens Saturday lunchtime games.

BT said the deal will cost it £7.6 million per match, an increase of 18% on the current rate of £6.5 million.

But it pointed out that the launch of BT Sport had supported the financial performance of the company by attracting new customers and encouraging existing customers to take more of its products.

Shares rose on the announcement in February as it was seen as having secured a better deal than its rival.

It has also bought Champions League rights for three years, starting from this autumn, for £897 million.

The City expects BT to post a full-year pre-tax profit for 2014/15 up 11% to £3.1 billion, buoyed by the rising number of broadband customers - bolstered by the football offering - which grew by 119,000 during the third quarter of the financial year.

In January, BT unveiled plans to roll out ''ultrafast'' broadband delivering internet speeds six times faster than those currently available, starting from the 2016/17 period.

Its ''G.fast'' technology, which will be tested at pilot locations this summer, will help deliver a service of up to 500Mbps to most of the UK within a decade, BT said. Currently BT's ''superfast'' fibre network delivers speeds of up to 80Mbps.

At the same time BT also revealed that its pension deficit had swollen to £7 billion as it agreed a 16-year recovery plan that will include £2 billion in payments over the next three years.