// Morrisons full-year profits cut by 50.7% to £201m, after being hit by £260m in pandemic costs
// Like-for-like sales jumped by 8.6%, with 9% growth in a strong final quarter
// Total full-year revenue grew just 0.4% year-on-year to £17.6bn, but online sales tripled
Morrisons has revealed that profits were cut by more than half over the past year after it was hit by £290 million in costs linked to the Covid-19 pandemic.
The Big 4 grocer told investors that profits before tax and exceptional costs slid by 50.7 per cent to £201 million for the year to January 31.
The Bradford-based supermarket chain said it was impacted by higher-than-expected pandemic costs after a recent increase in absences, as well as the £230 million impact of handing its business rates relief back to the Treasury.
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Like-for-like sales – excluding fuel and VAT – jumped by 8.6 per cent as it was buoyed by strong grocery demand.
The final quarter alone, which incorporated the peak Christmas trading period, saw nine per cent growth in like-for-like sales.
However, total full-year revenue grew just 0.4 per cent year-on-year to £17.6 billion.
Morrisons said online sales tripled during the year as its capacity jumped five-fold.
It also said online and wholesale operations were both profitable and it expected these to continue to improve.
The retailer’s free cash outflow came in at £450 million, compared to an inflow of £238 million in Morrisons’ previous financial year, due to lower profit and temporary impacts of lower fuel sales, higher stock and paying small suppliers immediately.
Morrison’s net debt at the end of the year also grew to £3.16 billion, compared to £2.45 billion the previous year. On a pre-IFRS basis, the net debt grew to £1.79 billion compared to £1.08 billion the prior year.
Despite this, Morrisons expects to post higher profits for the new financial year and has seen “strong trading” since it began in February.
“This has been a year where Morrisons’ resilience has been severely tested and I could not be more proud of the way the whole business has met that test,” Morrisons chairman Andrew Higginson said.
“As we look forward to brighter times ahead, Morrisons is developing into a stronger, better business with deeper and closer relationships with our customers and the communities we serve.”
Chief executive David Potts said: “I’m pleased with the greater recognition, warmth and affection for the Morrisons brand from all corners of the nation, following a year like no other.
“We must now look forward with hope towards better times for all, and we’re confident we can take our strong momentum into the new year, targeting profit growth and significantly lower net debt during 2021-22.”
with PA Wires