Sainsbury's has reported a 27% increase in half-year underlying profit before tax to £240m on sales up 4.7% at £9.998bn.

Pre-tax profit for the 28 weeks to 6 October rose 20% to £232m, while like-for-like sales increased 4% excluding fuel, despite tough comparatives and poor summer weather.

Chairman Sir Philip Hampton said the company's recovery plan Making Sainsbury's Great Again was “well advanced and ahead of schedule”, adding “Since March 2005 we have grown sales by £2.3bn and we are ahead of our target to reach £2.5bn by March 2008.”

The chain opened three supermarkets during the period, closed two and refurbished 20. It plans to open a further 12 in the second half of the year.

“While there are tighter constraints on current consumer spending, we have a strong Christmas offer and the company is significantly stronger than it was when we launched our Making Sainsbury's Great Again plan in 2004,” added CEO Justin King.

Meanwhile, Sainsbury's has formed a joint venture with property company Land Securities to develop the chain's property potential.

Sainsbury's has been under pressure to spin off its property portfolio or release some of its value.

“The company believes that ownership of its property assets enables it to retain operational flexibility while exploiting potential development opportunities and maximising value for shareholders,” Sainsbury's said.