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* CEO Justin King sees "a few more years" at Sainsbury's
* 2012-13 underlying pretax profit 756 mln stg, up 6.2 pct
* Dividend 16.7 pence, up 3.7 pct
* Sees no change in UK economic outlook
* Sees 2013/14 like-for-like sales up 1-1.5 pct
* Shares down 4 pct
By Kate Holton
LONDON, May 8 (Reuters) - Justin King dismissed rumours heplanned to quit as head of J Sainsbury, promising tosteer Britain's third-biggest grocer through the challenges ofthe next few years after another set of forecast-beatingresults.
Speaking after the group posted its eighth straight rise inannual profit on the back of a 10-year high in market share,King told Sky News that he did not have any immediate plans tomove on.
"I consider myself still to be a relatively young man, soI've got a few more years in Sainsbury's in me yet," he said,before repeatedly refusing at a later news conference to bedrawn on any more details.
The comments, following mounting speculation that he couldmove on after nine years as chief executive, came as the groupposted a 6.2 percent rise in annual profit and higher margins,mainly due to a strong online and convenience store performance.
King said the group saw no near-term change in the economicsituation in Britain, suggesting the next year could be toughfor the broader retail sector, which has been hit hard asconsumers grapple with high inflation and meagre wage growth.
But Sainsbury's, whose market share is 16.8 percent, hasstood out against rivals, benefitting from the success of its"Brand Match" pricing initiative, growing own-brand sales and abig push into non-food areas like clothing and home accessories,resulting in 33 consecutive quarters of underlying sales growth.
Unlike rivals Tesco and Asda it has alsonot been implicated in the horsemeat scandal, which broke inJanuary when horse DNA was found in frozen burgers in Britishsupermarkets, with none of its products testing positive.
King said the group's strategy and understanding of itscustomers meant it was well-positioned for growth, although its2013/14 forecast for like-for-like sales up between 1 and 1.5percent disappointed some analysts.
Online sales and local convenience stores are the twofastest growing areas for Britain's supermarkets as consumersturn to the internet and local shops to avoid the high fuelprices incurred by trips to town centres and out-of-town malls.
Sainsbury's convenience store business is growing at over 18percent year-on-year, driven by a combination of new sellingspace and like-for-like sales growth, while online grocery salesare increasing nearly 20 percent year-on-year.
"Justin King has led Sainsbury to another year of steadyprogression in still challenging economic and sectorconditions," Shore Capital analyst Clive Black said.
"For that the 'grandfather' of the sector and his team nowdeserve considerable credit. Sainsbury has developed into amaterially more resilient business than was the case when hetook control of the reins."
The group, founded in 1869, has also benefited from problemsat market leader Tesco, which has had to retrench and rebuildafter posting a profit fall for the first time in 20 years.
Some analysts said Sainsbury's was vulnerable to a recoveryat the retail giant, which has invested 1 billion pounds in arevival plan following a dismal Christmas in 2011 which also ledto a first profit warning in two decades.
In April, Tesco wrote down the value of its propertyportfolio after deciding not to develop 100 sites. King notedTesco's property portfolio was very different to its own, whichwould add to its earnings, and any Tesco pull back was good forSainsbury's.
Total sales were up 4.6 percent to 25.6 billion pounds, orup 1.8 percent on a like-for-like basis, which excludes theimpact of fuel, in the year to March 16.
The group, which trails Tesco and Wal-Mart's Asda by annualsales, said its profit before tax and one-off items was 756million pounds ($1.2 billion), at the top end of a range offorecasts and above consensus of 746 million pounds.
Shares in the group were down 4 percent by 1344 GMT, againsta flat FTSE 100, after they rose 14 percent since the start ofthe year, with analysts attributing the fall to the previousstrong rally and a note of caution over the outlook. Analystsare evenly divided over the stock, with 11 of 25 brokers havinga Hold rating as they believe it is fully valued compared withpeers.
The robust performance helped the group to increase thefull-year dividend by 3.7 percent to 16.7 pence.
Sainsbury's said the dividend payout would be covered byearnings at a ratio of 1.83 times, up from 1.75 times in theprevious year. It said it maintained its target of increasingthe dividend year-on-year and continued to plan to build coverto two times over the medium term.
Sainsbury's also said it had bought out Lloyds BankingGroup's 50 percent stake in Sainsbury Bank For 248million pounds.
