Morrisons shares rise after results announcement
Shares in Morrisons supermarket were up 3.3% following following the publication of its latest results.
The rise comes after a 25% fall in the Bradford headquartered business’s shares over the past year.
The listed Big Four supermarket earlier said it had seen pre-tax profits and revenues increase in its interim results for the six month period ended 4 August 2019, despite weak consumer confidence.
Its pre-tax profit rose 48.5%, from £136m in the same period last year to £202m in the current period. Total revenue was up just 0.4%, from £8.80bn to £8.83bn.
Responding to the Morrisons figures, Russ Mould, Investment Director at AJ Bell, said: “There are a lot of moving parts to Morrisons as a business, illustrating how it has had to be creative with finding new ways to make money than simply running traditional supermarket stores.
“Its wholesale business has become an important growth driver and it is encouraging to see a range of new activities including an extended deal with Amazon.
“Ocado is no longer the exclusive digital partner which means Morrisons is free to strike deals, perhaps on better terms, with other providers to help grow its online food retail market share.
“Like Tesco, Morrisons has been slashing prices in an effort to stop customers defecting to discounters Aldi and Lidl.
“But it is clear that Morrisons is having to pedal very hard to get up the hill. Simply having shops close to large communities is no longer enough to guarantee decent sales. That is why wholesale operations are likely to play a much bigger role in the future as it provides plenty of opportunities to accelerate growth.
“Management remains optimistic about the future and that is evident in not only dividend growth well above the current rate of inflation, but also a special dividend on top. These dividends wouldn’t be so generous if the supermarket thought that life was about to get much tougher.”
