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Morrisons profits rise despite 'challenges' of higher import costs

Morrisons profits rise despite 'challenges' of higher import costs

Morrisons shareholders will get their hands on a bumper payout this year after its booming wholesale business and strong in-store sales boosted full-year profits.

David Potts, CEO, added: "We had a strong year, becoming more competitive and increasingly differentiating Morrisons for all stakeholders".

The Bradford-based firm posted an underlying pre-tax profit of £374mln for the year to February 4, up from £337mln a year earlier, and above analysts' consensus for £371mln.

Pre-tax profits at the UK's fourth-largest grocer over the same period rose almost 17 per cent to £380 million, and 9.5 per cent to £374 million on an underlying comparative basis.

Revenue rose by 5.8 per cent to £17.3bn and the company also said that it had made a decision to pay shareholders a special dividend of 4 pence. That partly reflected a 5 percent rise over the last three months and some disappointment at a fall in free cash flow to 350 million pounds from 670 million pounds.




"Despite maintaining its 10.6% United Kingdom market share, according to Kantar, in order to stave off the impact of discounters perhaps this payout could have instead been used to further improve Morrisons' online offering, as a noticeable lack of internet shopping from Aldi (bulky non-food items only) and Lidl (no online sales) provides a clear and present opportunity to offer customers a service not offered by the plucky challengers", the analyst concluded.

Supermarket giant Morrisons has seen its levels of growth accelerate over the past year, marking its third consecutive year of rising sales.

Morrisons trails clear market leader Tesco, Sainsbury's SBRY.L and Walmart's WMT.N Asda in annual sales.

The retail group began a programme to supply McColl's convenience stores nationwide with both branded products and the renewed Safeway brand, as well as expanding its online services, and extending the geographical reach of the "Morrisons at Amazon" partnership.

Britons are spending more on food but cutting back on non-essential purchases as their spending power is squeezed by inflation.


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