Morrisons reports ‘nine-year high’ as quarterly sales rise 6.3%

Bradford-headquartered Morrisons has seen its Q2 group like-for-like sales rise 6.3% – a nine-year high for the Big Four supermarket.

Publishing its half year results to August 5, Morrisons said its Q2 Group like-for-like sales, excluding fuel and VAT, was up 6.3%; while during the first half of the year, group like-for-like ex-fuel/ex-VAT were up 4.9% (2017/18: 3%).

During the period, its revenues rose 4.5% to £8.80bn (2017/18: £8.42bn) and underlying pre-tax profits were up 9% to £193m (2017/18: £177m)

The listed company said net debt had reduced by a further £44m to £929m since the end of 2017/18.

Its initial programme to supply first 1,300 McColl’s stores was completed ahead of plan. Morrisons said that as a result of this, it expected to achieve its target of £700m total annualised wholesale supply sales ahead of its initial end-2018 guidance. “Our plan for £1bn of annualised wholesale supply sales in due course remains unchanged,” added the supermarket.

Post half-year, Morrisons has agreed new wholesale deals to supply MPK Garages forecourt stores and Big C in Thailand.

In the second half, Morrisons expects lower costs of both its Morrisons.com expansion and accelerated wholesale supply, and will annualise its Home & Leisure relaunch.

Andrew Higginson, chairman, said: “With each passing quarter, the Morrisons team is building a better and better business. New customers try Morrisons and tell us they really enjoy shopping with us: our friendly colleagues, the quality of our fresh food and our low prices. We look forward to more and more customers trying Morrisons.”

David Potts, Chief Executive, added: “Strong growth, including our best quarterly like-for-like sales for nearly a decade, together with another special dividend for our shareholders, shows how new Morrisons can keep improving for all stakeholders.

“Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace.”

The supermarket added: “We are confident that Morrisons has many meaningful and sustainable sales and profit growth opportunities ahead. We also expect free cash flow generation to remain strong and sustainable. Reflecting this progress and our expectations, we are today announcing a further special dividend of 2.00p per share. As we stated at the 2017/18 preliminary results, we will retain a strong and flexible balance sheet, and we will be guided each year by the principles of our capital allocation framework in assessing the uses of free cash flow.”

 

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