Morrisons’ half-year profits dented by £155m Covid costs

Apollo Asset Management will no longer be making an offer for the supermarket but is now in talks to join a consortium with rival Fortress.
Morrisons boss David Potts and the rest of the board have approved the £6.3bn bid from Fortress.
// Morrisons’ half-year like-for-like sales increases 8.7%, buoyed by rapid online growth
// However, it posted lower profits after booking £155m in costs related to the Covid-19 crisis
// Pre-tax profits drops 25.3% to £148m in the six months to August 2

Morrisons has seen grocery sales surge after the pandemic drove demand, but posted lower profits after booking £155 million in costs related to the Covid-19 crisis.

The Big 4 grocer said pre-tax profits slipped by 25.3 per cent to £148 million in the six months to August 2 as a result.

It said the jump in costs was partly offset by £93 million in benefits from the government’s one-year business rates holiday.


However, Morrisons chief executive David Potts said the retailer was “expecting and planning for profit growth in half two” as strong grocery sales continued.

The retail giant reported that like-for-like sales, excluding fuel, increased by 8.7 per cent as it was particularly buoyed by rapid online growth.

Morrisons said it has expanded its online and home delivery capacity “five-fold” after the coronavirus pandemic sparked demand for deliveries.

The retailer also launched new online propositions, including a partnership with Deliveroo which has now expanded to 180 sites.

Potts said that he believes shoppers were in the midst of seeing “the renaissance of British supermarkets”.

“From the start of the pandemic we stepped up and put the company’s assets at the disposal of the country to help feed the nation,” he said.

“Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public’s appreciation of all the vital work our colleagues are doing.

“We are now looking forward to holding on to what we created in the first half, building on our colleagues’ inspiration and innovation, and sustaining the momentum of a broader, stronger Morrisons.”

Potts also stressed that it was the grocer’s preference that the UK Government would secure a tariff-free Brexit deal.

“Tariffs do drive inflation, so in any year no-one wants to see increased prices, particularly not as we are in a recession,” he said.

The trading update just days after Morrisons announced reductions on about 400 essential items as it became the latest grocer to slash prices.

with PA Wires

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