Morrisons announced a 66%
increase in pre-tax profits to £612m on sales up 4% at £13.1bn for the year to 3 February, as Sir Ken Morrison retired from the scene after 55 years of heading up the Bradford-based supermarket group. A tough marketing
campaign allied with astute promotions brought in an extra half a million customers each week to the revamped stores.
Profits were helped by cost savings along with a £32m pro-perty sale. Net debt was slimmed down by £229m to £543m and £1bn of surplus capital is to be returned to shareholders by share buy-backs. Broker Citigroup upped its 2009 earnings per share estimate by 5.5% to 16.6p. The market is speculating that Sir Ken may sell some of his £770m share stake to beat the changes to capital gains tax, which will increase the effective rate of tax from 10% to 18% on 6 April. Sir Ken is now unpaid honorary president of Morrisons and intends to keep a close eye on the business.
Glisten, the food producer, announced a 25% rise in pre-tax profits to £3.26m on sales up 13% at £33.5m for the half year to end December 2007.
Glisten made three business purchases for £11m, financing the deals by debt, and is looking
to make more takeovers in the UK. Peel Hunt expects full year pre-tax profits to rise from £5.55m to £7m. Glisten has successfully passed on raw material costs, which are rising at from 5% to 15% a year. The company's main market is now garage forecourts rather than the supermarkets, with the big four supermarkets taking only 18% of Glisten's sales.
Greggs, the nation's biggest sausage roll retailer, announced pre-tax profit of £49m, up nearly 12% for the year to 29 December 2007. This figure excluded property sale profits of £2.2m.
Sales rose 5.3% to £586m. Pre-tax profits were boosted by the consumers' move to buy healthier food and less fatty snacks.
Sir Michael Darrington, the Greggs boss who is retiring, attacked the 'greedy speculators' he reckons are pushing up commodity prices, which are translating to higher food prices at the shops. He said Greggs is under pressure from rising energy costs and also from ingredients costs. The company has successfully increased its prices by 5% over the past 12 months to get back some of the cost increases.