Morrison(Wm.)Supermarkets plc (MRW.L) reported Thursday higher profit in its first half with increased like for like sales, while underlying operating margin was weak. Looking ahead, the company said it remains confident that it can continue to grow Morrisons. In London, Morrison shares were losing around 5 percent in the morning trading.
Andrew Higginson, Chairman, said, “Our seventh consecutive quarter of positive like for like means that we are able to report profit growth on growth for the first time in the turnaround. With good trading momentum and a strategy to build a broader, stronger Morrisons, the business is well set to continue to deliver consistent and sustainable growth for its stakeholders.”
For the first half, profit before tax climbed 40 percent to 200 million pounds from last year’s 143 million pounds.
Underlying profit before tax was 177 million pounds, compared to last year’s 157 million pounds. Underlying earnings per share were 5.79 pence, compared to 5.04 pence a year ago.
Reported operating profit grew 4 percent from last year to 233 million pounds. Underlying operating profit was up 3.4 percent, while margin was down four basis points to 2.5 percent.
Turnover grew 4.8 percent to 8.42 billion pounds from 8.03 billion pounds a year ago. Turnover excluding fuel was 6.57 billion pounds, up 2.6 percent.
First-half group like-for-like sales excluding fuel was up 3 percent, comprising contributions from retail of 2.5 percent and wholesale of 0.5 percent. Retail sales growth included supermarkets of 2.1 percent and online of 0.4 percent.
In the second quarter, like-for-like sales excluding fuel increased 2.6 percent.
Further, the company announced an interim dividend growth of 5.1 percent to 1.66 pence.
Morrison further said that following the recently announced supply agreement with McColl’s, it now expects total annualised wholesale sales to all partners to exceed 700 million pounds, including tobacco, by the end of 2018. The company expects wholesale supply sales to be more than 1 billion poundsn in due course.
The company now expects 75 million pounds to 125 million pounds of incremental profit before tax from wholesale, services, interest and online areas in the medium term, increased from 50 million pounds to 100 million pounds previously.
Morrisons also said it expects net debt to remain less than 1 billion pounds for the rest of 2017/18.
In London, Morrison shares were trading at 232.80 pence, down 4.98 percent.
by RTT Staff Writer