Morrisons CEO Marc Bolland said this afternoon (12 March) that the UK's fourth-largest retailer would continue to expand and had identified over 100 sites for new stores.

The company, which accounts for around 12% of UK grocery sales, set out plans for further expansion after posting a 7% rise in annual profits.

Morrisons' appeal to cash-conscious consumers meant it reported pre-tax profits of GBP655m (US$905.6m) for the year to 1 February - up from GBP612m a year earlier.

Annual revenues climbed 12% to GBP14.5bn, while like-for-like sales rose 7.9%, Morrisons said. Underlying earnings per share rose 16% to 16.7p.

Bolland said Morrisons had been luring customers from all its major rivals and had won over shoppers in the south of England, away from the retailer's traditional northern heartland.

"We are gaining from all three main competitors," Bolland said. "We are the only one of the four main retailers who are not losing to discounters. The consumer's perception of Morrisons has very much changed."

Morrisons, which has 382 stores across the UK, agreed in December to buy 38 stores from fellow UK retailer The Co-operative Group in a move to further expand across the country.

Today, Bolland said Morrisons had seen more than 100 potential sites for new stores as it looked to turn the company from a "national" retailer to one that is "nationwide".

Bolland pointed to internal company research that he claimed showed that 34% of UK households do not live within a 15-minute drive of a Morrisons store.

"All the work we've done is unknown to all these households in the UK," Bolland said. "This is the opportunity to make that more accessible to them." The focus of Morrisons' expansion would centre on the south-east of England and London, Bolland added.

In the four years to 2010/11, Morrisons is aiming to add 2m square feet of floor space to its network. The retailer said it had already added some 650,000 sq ft and would add another 350,000 during the coming fiscal year through the opening of around 10 new outlets and other store extensions.

The stores acquired from the combined Co-op and Somerfield estate will add another 500,000 sq ft, while next year Morrisons is planning to introduce another 500,000 sq ft.

Bolland said Morrisons saw an "opportunity" to boost the number of smaller outlets in its estate, stores of around 11-20,000 sq ft.

The Dutchman said the smaller stores would still incorporate Morrisons' Market Street concept, which includes in-store fishmongers and butchers. "The smaller stores will allow us to be in town [centres]," Bolland said. "The stores will not be convenience shops but they are convenient shopping."

Despite identifying more than 100 potential sites for new stores, Bolland refused to be drawn on how many would house the smaller outlets and he added that Morrisons would only acquire sites at the right price.

"We're not going to buy them all. If the price isn't right, then we're not going to buy them," Bolland insisted.

Morrisons has postponed a share buyback to invest in its expansion programme. "It's sensible to preserve our fire-power," finance director Richard Pennycook said.

Shares in Morrisons were up 3.7% to 254.75p at 16:09 GMT this afternoon.