Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Morrisons notches up seventh consecutive quarter of like-for-like growth as recovery continues in first half

"A new Morrisons is beginning to take shape. The capability of the team continues to improve and we are making strong headway with our plans to Fix, Rebuild and Grow"
morrisons supermarket trolley
Morrisons has been cutting its prices and improving its store layouts to get more people through the door

WM Morrisons Supermarkets PLC (LON:MRW) notched up its seventh consecutive quarter of like-for-like sales growth in the first half of the year as its recent recovery continued.

Britain’s fourth largest supermarket has been trimming its prices and revamping its stores over the past year or so in a bid to keep up with its peers and fend off competition from German discounters Aldi and Lidl.

It said in a statement that focus on “improving the customer shopping trip” helped like-for-like sales (excluding fuel) grow by 3% (H1 16/17: 1.4%). Total sales jumped 4.8% year-on-year to £8.42bn (H1 16/17: £8.03bn).

Underlying profit before tax growth - Morrisons' preferred metric - was a little better than analysts had expected, rising 12.7% to £177mln (H1 16/17: £157mln).

'Another good performance'

“A new Morrisons is beginning to take shape,” said chief executive David Potts.

“The capability of the team continues to improve and we are making strong headway with our plans to Fix, Rebuild and Grow.

“Our supermarkets continue their focus on improving the customer shopping trip and, in wholesale supply, we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers bring us.”

Chairman Andrew Higginson added: “This is another good performance from Morrisons. Our seventh consecutive quarter of positive like for like means that we are able to report profit growth on growth for the first time in the turnaround.”

Confident outlook despite UK consumer concerns

Morrisons said the “good trading momentum” has rolled over into the second half, although it did note that the UK consumer “faces many uncertainties” and the competitive food retail environment.

The supermarket has been working to boost profits outside of its stores and it generated a further £14mln incremental profit from wholesale, services, interest and online in the first half.

It now expects £75m-£125mln of incremental pre-tax profit from these four areas in the medium term, increased from £50m-£100mln previously.

That target includes the contribution from its new wholesale supply agreement with McColl’s which is expected to start adding to the bottom line during the next financial year (2018/19).

Speaking of that tie-up, Morrisons confirmed that it expects wholesale sales to exceed £700mln next year, rising to more than £1bn “in due course”.

--Updates for additional info and CEO comment--

View full MRW profile View Profile

Morrisons Timeline

Related Articles

Medical tests
July 11 2017
In an operational update, the medical services and software company said a multi-centre investigator led study comprising data from 607 patients at two academic university hospitals has now been completed
H&T Pawnbrokers store
November 15 2017
“We have delivered a strong trading performance during the second half in the key segments of Pawnbroking, Retail and Personal Loans”

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use