Morrisons continues its growth with 22% profits rise

SUPERMARKET group Morrisons has said it had continued to grow, revealing that half-year pre-tax profits rose 22% to £359m on sales of £7.5bn.

The UK’s fourth-largest supermarket chain said its low prices during the downturn had attracted a million new customers from its rivals over the last two years and it saw turnover rise by 5% to £7.5bn in the six months to August 2.

Chief executive Marc Bolland said he was confident shoppers would stay with the firm as the economy picked up.

The most recent data from TNS Worldpanel survey of the grocery sector found Morrisons’ market share had risen to 11.6% in the 12 weeks to 12 July, up from 11.2% a year ago and the strongest rise in the sector.

Mr Bolland said: “This has been an excellent first half performance from Morrisons, continuing our run of market beating sales growth. We offer great value to our customers, particularly our offers on fresh food delivered through our own preparation facilities, which have been hugely popular with a growing number of customers.

The business is performing well in all parts of the country and we are making good progress on our plans to move from national to nationwide.”

The Bradford-based group saw like-for-like sales excluding VAT and fuel, up 7.8% and its increasing its interim dividend by 35% to 1.08p.

Morrisons opened 22 new stores during the six months – including 19 it acquired from the Co-op – creating 5,000 new jobs and opened a new distribution centre in Sittingbourne ahead of schedule.

Underlying pre-tax profits were up 22% to £359m compared to £295m for the same period last year. Headline pre-tax profit was £449m including a £91m exceptional pensions credit.

Net debt increased to £885m but the group still only has gearing of 19%.

Chairman Sir Ian Gibson, said: “We are pleased with these interim results which reflect our broad appeal as the food specialist for everyone.

“Morrisons has gained over one million new customers in the past two years, and the management team’s priority is to build on this success by continuing to offer outstanding day to day value to all our customers as the pressure on consumer spending continues through 2009.”