JUSTIN KING, chief executive of J Sainsbury, will unveil interim results on Wednesday and City analysts expect the retailer to report pre-tax profits of £119m.

After 20 months at the helm of Sainsbury, King appears to be getting to grips with the supermarket group’s problems. Prices have been cut and customers have a good chance of finding what they are looking for on the shelves.

Last October King promised shareholders that he would raise sales by £2.5 billion and make “Sainsbury’s great again” within four years.

In October, Sainsbury announced the third consecutive quarter of like-for-like sales growth — the best performance since the beginning of 2002. The group’s market share has also grown — partly thanks to the troubles at Wm Morrison — and unlike many others in the retail sector King insists that he is confident about Christmas.

The former Marks & Spencer executive has made a good start — but he has a long way to go. Analysts warn that the real test will come next year when King has to prove the recovery is sustainable.

Nevertheless, the progress so far has dampened the takeover speculation that, until recently, had swirled round the retail group.

Archie Norman, Allan Leighton and the American retailer Target have all been linked with a bid for Sainsbury, despite members of the Sainsbury family — which owns a 32% stake — insisting that they were not sellers. The incessant bid talk helps explain why Sainsbury is so highly rated by the market with a price/earnings ratio of 27.9 — compared with Tesco’s 15.9.

If King really has got to grips with Sainsbury, shareholders should expect little recognition from the market for his efforts. The better he does, the less chance there is of the Sainsbury clan selling the family silver.

Armorgroup

THE security firm Armorgroup International, which works in places such as Iraq and Afghanistan, last week issued its second profit warning in six months.

The increasingly volatile situation in Iraq has forced oil firms and construction companies to postpone contracts, hitting Armorgroup hard.

It is less than a year since Hoare Govett brought the security firm to the market at 125p a share — on Friday they closed at 97p When Armorgroup listed, investors were in the grip of the “Baghdad bubble” amid reports that security firms were making fortunes protecting those rebuilding Iraq. Unfortunately, the reality has proved to be slightly different.

Iraq accounts for 60% of Armorgroup’s revenues but doing business there is proving increasingly difficult amid uncertainty about contracts and the transition to an Iraqi administration. To make matters worse, intense competition has driven down prices.

Even before its latest difficulties Armorgroup looked fully valued. In 2003, a management buyout put a price of £18.2m on the firm. Yet a year later, when it came to float on the stock market, the value had almost doubled to £34m.

Granville Baird Capital Partners, Armorgroup’s private- equity backer, which owns a 32% stake, will be able to sell shares from next month, when a lock-up agreement ends.

Having issued two profit warnings and with his largest shareholder free to sell, restoring investors’ confidence will be no easy task for Jerry Hoffman, Armorgroup’s chief executive.

Parkdean Holidays

SHARES in Parkdean Holidays, the caravan-parks operator, plunged nearly 10% at 3.20pm on Tuesday. Over the next hour nearly 250,000 shares changed hands before it was announced that £135m takeover talks with the property company Grainger Trust had collapsed.

So had news of the breakdown leaked? Nothing to do with us, insisted Grainger Trust. “We kept mum.” Parkdean Holidays also pleaded innocence.

The share-price fall must be a pure coincidence then.