Morrisons reports profit increase as turnaround continues
In the year to 29 January, pre-tax profits climbed by 49.8% to £325 million. On an underlying basis pre-tax profit rose by 11.6% to £337 million.
Total turnover edged up 1.2% to £16.3 billion despite a planned programme of disposals and underperforming store closures. Like-for-like sales excluding fuel rose by 1.7% following growth in all four quarters of the year. Like-for-like transactions were up 4%.
The company said its ‘Fix, Rebuild and Grow’ strategy is starting to build a “broader, stronger” business with like-for-like sales growth and improved productivity driven by investment in the shopping trip.
David Potts, Morrisons chief executive, explained: "Our full year of like-for-like sales and profit growth was powered by listening to customers, and shows what our hard-working team of food makers and shopkeepers can do.
"But, it's only one year. Our turnaround has just started, and we have more plans and important work ahead. If we keep improving the customer shopping trip, I am confident that Morrisons will continue to grow."
Morrisons said its 'Price Crunch' initiative, which has been running for more than a year, helped to drive volume growth as the supermarket works to be more competitive.
In addition, the company realised £393 million of cost savings during the year, bringing the three-year total to £1.04 billion which was above its £1 billion target.
A new automated ordering system was launched in the second half and Morrisons is working on further cost-saving opportunities in distribution between manufacturing and retail, in-store administration, and procurement of goods not for resale.
During the year, Morrisons embarked on new partnerships with Amazon, Ocado, Timpson, Rontec, and announced the revival of the Safeway brand.
Looking ahead, the company said: “We are confident we can continue to turnaround and grow Morrisons. There are some uncertainties ahead, especially around the impact on imported food prices if sterling stays at lower levels. We also expect depreciation and pension costs to increase, and we will continue to invest in colleague pay rates. However, all of this is incorporated into our plan.”
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