10th Sep 2015 06:18
LONDON (Alliance News) - Wm Morrison Supermarkets PLC Thursday reported a sharp drop in profit in the first half of its financial year, as its revenue and like-for-like sales continued to decline in a deflationary UK food market and as it competes on price with other supermarkets in the face of discounters Aldi and Lidl.
The grocer reported a drop in pretax profit in the half year ended August 2 to GBP126 million from GBP239 million in the first half of the prior year, as total revenue fell 5.1% to GBP8.1 billion from GBP8.5 billion, and like-for-like sales excluding fuel declined 2.7%.
It said that its like-for-like sales continue to be hit by deflation as it continues to lower prices.
Morrisons will pay an interim dividend of 1.50 pence, down from the 4.03p it paid the year before. It confirmed that its full-year dividend will be no less than 5.00p.
Morrisons added that its underlying pretax profit will be higher in the second half of the year than in the first, but it did say that it will incur further restructuring and one-off costs in the second half. Underlying pretax profit in the first half was down 35% on the year before at GBP117 million from GBP181 million.
"During the first half, the team has made good progress in starting the turnaround journey. Whilst the management team need time to settle in, make the changes they see as important, and build trading momentum, I believe the team will deliver much improved profits and returns for shareholders," Chairman Andrew Higginson said in a statement.
"The immediate priority is to deliver a better shopping trip to stabilise trading performance. Our six strategic priorities will then deliver improvement in the core supermarkets, where we have the greatest opportunity. It will be a long journey. We approach the challenge with energy, confidence and many strengths, particularly our strong balance sheet and cash flow, which enables investment in improving the customer shopping trip," Chief Executive David Potts added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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