Struggling retailer Wm Morrison Supermarkets (Morrisons) has delivered a strong set of results for its first-half ended 23 July, with pre-tax profits of GBP134.2m (US$254.5m) against a loss of GBP82.1m in the same period last year.
Turnover in the half was flat at GBP5.85bn although like for like sales in the first eight weeks of the second half rose 6.5% including fuel (or 5.9% excluding fuel).
Net debt in the first half was reduced to GBP881m from GBP1.1bn in the year-ago period and further debt reduction is anticipated. The company said it was on course to save six million store labour hours with attendant savings of GBP50m this year, as well as GBP30m in distribution and GBP30m in central costs following the consolidation of staff at the new head office in Bradford.
New CEO Marc Bolland, who joined Morrisons on 1 September, gained plaudits from founding family member and 38% stakeholder Sir Ken Morrison, who commented: “Our business is growing again, and we are well on track with our targeted profit improvements. Marc Bolland joins a business moving firmly in the right direction, and I have every confidence that he will lead us to future success.[…] He has made an enthusiastic and energetic start, seeking to understand the heartbeat of the business and getting well acquainted with colleagues in all areas.”
The period under review saw a further six stores acquired though the Safeway purchase divested or closed, and one new opening in Leyland, to leave the company with 373 trading stores at the half-year point.
Like-for-like sales at the original Morrisons stores had moved into positive territory by the end of the period, which saw generally good growth across the sector.
The company said its three-year optimisation plan was on track, with improvements coming through solidly and sustainably. Customer numbers were up by 5.3% with a particularly strong performance seen in the converted stores.
A tougher trading environment is anticipated in the second half, but the company’s strong performance in the first half gave it confidence for the full year, it said in a statement.
The interim dividend has been held at 0.625p.