Morrisons sees profits leap 40% as turnaround produces results

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Turnaround

Morrisons has solidified its revival efforts after posting growth in revenue and profits for the “first time in the turnaround”.

For the six months to July 30, the grocer saw like-for-like sales jump three per cent, excluding fuel. This marks the seventh consecutive quarter of positive like-for-likes.

Meanwhile its turnover rose4.8 per cent to £8.42 billion as pretax profits leaped 39.9 per cent to £200 million.

Underlying pre-tax profits also increased 12.7 per cent to £177 million.

It also reached its year-end target of reducing debt to under £1 billion, reducing it by £262 million to £932 million.

The fresh wholesale agreement with McColl’s and expansion of online services in the North-East England lead the retailer to boost its financial targets.

Incremental profit targets have risen from £50 million and £100 million, to £75 million and £125 million.

Annual wholesale to partners is also expected to be beyond £700 million.

“This is another good performance from Morrisons. 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,” chairman Andrew Higginson said.

“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.”

Chief executive David Potts added: “A new Morrisons is beginning to take shape. The capability of the team continues to improve and we are making strong headway with our plans to fix, rebuild and grow.

“Our supermarkets continue their focus on improving the customer shopping trip and, in wholesale supply, we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers bring us.”

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