Sainsbury has reported underlying pre-tax profit of £131m compared to £366m in 2003, for the six months to October 9. However, exceptional items totalled £168m, resulting in a pre-tax loss of £39m.

The company’s net debt has been reduced to £1.8bn from £2.1bn aided, in part, by the sale of Shaw’s supermarkets in April this year for £275m.

The outlook for the second half of the year has not changed from its announcement on October 19 and it does not expect pre-tax profit for the second half to differ much from that of the first half.

“We are clear on the actions we need to take to make Sainsbury’s great again,” said Justin King, chief executive. “We are now beginning the implementation of the plans arising from the Business Review to rebuild a sustainable sales led recovery.”

The company has said that performance for the second half will be affected by further investment in the customer offer in order to drive sales.

“New improved products are being added to our ranges and many of our Christmas lines are now in stores,” said King.