Wm Morrison Supermarkets PLC (LON:MRW) is rewarding shareholders with a special dividend after Britain’s fourth biggest grocer reported an above-forecasts 11% rise in full-year profit.
The FTSE 100-listed firm posted an underlying pre-tax profit of £374mln for the year to February 4, up from £337mln a year earlier, and above analysts’ consensus for £371mln.
READ: Morrisons to slash 1,500 management roles and focus on customer service
The Bradford-based group saw its revenue rise 5.8% to £17.3bn, with group like-for-like sales excluding fuel and VAT up 2.8%, up from 1.9% a year earlier, benefiting from an improved performance from stores as well as a push into wholesale and online markets.
The firm said its net debt was reduced by £221mln to £973mln, below its £1bn year-end target, although free cashflow fell to £350mln, down from £670mln a year earlier.
Morrison’s said it was on track with its financial targets and plans to pay a special dividend of 4p, taking the full year payout to 10.09p, up 85.8% on the previous year.
David Potts, Morrison’s chief executive, commented: "We had a strong year, becoming more competitive and increasingly differentiating Morrisons for all stakeholders.
“We are pleased to be paying shareholders a special dividend of 4p a share, which reflects our good performance so far and confidence for the future.”
Fix, Rebuild and Grow strategy
Neil Wilson, senior market analyst at ETX Capital commented: “There is a lot of good news in here. The strong and continued uplift in LFL sales points to management getting the basics right at a time when the threat from discounters is rising and consumers have endured a long battle with falling real wages that will continue to weigh for some months at best.
“A lot of credit has to go to Dave Potts and co as the Fix, Rebuild and Grow strategy is starting to produce consistent growth on growth as it enters its fourth year of turnaround.”
He added: “Despite higher cost of goods inflation and other cost headwinds, Morrisons has been able to hold its own against the like of Aldi and Lidl, with Morrisons market share steady despite the discounters continuing to advance.”
But despite the good news, Morrison’s shares still shed 1% at 224p, having had a good run ahead of the numbers.