10th Mar 2016 07:19
LONDON (Alliance News) - Wm Morrison Supermarkets PLC on Thursday said it swung to a pretax profit in its recently-ended financial year, mainly due to the restructuring costs booked a year earlier, but expressed confidence in its outlook as underlying profit hit its expectations.
The grocer, which will rejoin the FTSE 100 later this month, having fallen out late in 2015, said its pretax profit for the year to the end of January was GBP217.0 million, swung from a GBP792.0 million loss a year earlier, when it booked significant costs on the restructuring of its business and store estate.
Stripping out those restructuring and store closure costs, underlying pretax profit hit GBP302.0 million, down from GBP413.0 million the year earlier but in line with the company's guidance of GBP295.0 million to GBP310.0 million.
Total revenue rose fell 4.1% to GBP16.1 billion from GBP16.8 billion, Morrisons said, as like-for-like sales, excluding fuel and VAT, fell 2.0%. The group said, however, like-for-like sales improved in the final months of the year and increased 0.1% in the fourth quarter.
Morrisons declared a final dividend of 3.50 pence per share, taking its total dividend to 5.00p, down from the 13.65p it paid out a year earlier.
The grocer said it has achieved its initial aims of stabilising like-for-like sales, cutting costs and recruiting new talent in the business. It added a strategy of listening to customer feedback and attempting to improve the shopping experience based on this was working, with customer satisfaction improving.
"By improving the shopping trip for customers, we have started the journey to turnaround the business and make our supermarkets strong. Our listening programme is informing and shaping the six priorities that are now driving the improvements that customers are noticing," said David Potts, chief executive of Morrisons.
Morrisons said it expects underlying pretax profit to grow by between GBP50.0 million and GBP100.0 million in the medium term, driven by online, manufacturing and wholesale opportunities the group has identified, and it expects its free cash flow will be better than previously guided, driven by operating working capital improvements and property disposal proceeds.
By Sam Unsted; [email protected]; @SamUAtAlliance
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