Morrisons’ profits in good shape

Morrisons returned positive half-year results, with profits of £449m, it announced this morning.

Turnover was up 7.4% to £8.7bn, with like-for-like sales (excluding VAT and fuel) up 2.2% and underlying profit up 8% to £442m compared to £410m in the same period last year.

The retailer admitted that consumer confidence was at a low last seen in the immediate aftermath of the credit crunch. With food price inflation increasing and modest levels of growth across the sector, the grocery retail market has experienced volume declines, despite high levels of promotions across the board.

Morrisons reported growth up 0.8%, ahead of the grocery market, and said it had outperformed in a competitive market for the fifth year in a row. It said it was confident of attractive growth in the medium to long term.

Non-executive chairman Sir Ian Gibson said: “Against the continuing backdrop of a challenging consumer and economic environment, Morrisons is reporting another good set of results. Our focus on outstanding fresh food, quality and value has enabled us to grow market share and deliver solid earnings growth.”

Chief executive Dalton Philips said that the supermarket’s ‘Price Crunch’ campaign had led to growing sales and a good profit growth, with longer opening hours introduced in May increasing the number of people visiting stores.  

He said: “As we entered 2011, we expected that the consumer would remain under pressure throughout the year, and planned our business accordingly. During the first half, the trading environment has, as expected, been challenging and we anticipate it to continue to be so for some time to come. Despite this, our performance to date, our growing customer base and our ongoing focus on tight cost control throughout the business, give the board confidence that we will deliver our expectations for the year.

“We also made great strides in developing the business for the future. We have opened our first convenience store, invested further in our unique production capabilities, increased efficiency across the group, gained valuable insights from our trial stores and taken our first steps towards becoming a multichannel retailer. I am confident we will make further good progress in the second half.”

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