13th Mar 2019 07:57
LONDON (Alliance News) - Wm Morrison Supermarkets PLC on Wednesday reported a fall in annual profit, but sales met analysts expectations amid strong like-for-like growth.
Furthermore, the FTSE 100-listed grocer rewarded its shareholders as it upped its total annual payout by 25% to 12.60 pence per share from 10.09p a year ago.
This was made up of a total ordinary dividend of 6.60p, after a final payout of 4.75p, in addition to a special dividend of 4.0p, which brought its special payout for the year to 6.0p.
16 analysts grouped by Vuma had expected Morrisons' ordinary dividend at 6.55p plus a 4.72p special payout.
For the year ended February 3, the UK's fourth biggest supermarket by market share posted pretax profit down 16% to GBP320 million from GBP380 million a year ago, as the company incurred some extra costs from investment in new store-pick capability and the roll-out of its wholesale supply deal with McColl's Retail Group PLC.
On an adjusted basis, excluding exceptional items, pretax profit rose to GBP406 million from GBP374 million in financial 2018, marginally behind analysts expectations which had seen adjusted profit coming in at GBP407 million.
"In a challenging period for customers and an ever-changing British retail scene, the turnaround at Morrisons has continued to progress well. The team has now completed four years of important work, building Morrisons as a broader, stronger business," Chair Andrew Higginson said.
"I am delighted that sales and profit again grew strongly, and that we are able to share that growth with our shareholders through increased dividends."
Revenue increased 2.7% to GBP17.7 billion from GBP17.3 billion, while like-for-like sales, excluding fuel and VAT, rose 4.8%, picking up pace from 2.8% achieved the year before. Like-for-like sales beat analyst consensus which had forecast a 4.5% rise.
Morrison's retail like-for-like sales increased 1.5% for the year overall but decelerated in the fourth quarter, rising just 0.6% following 1.3% growth in the third quarter.
Wholesale like-for-like sales, meanwhile, were up 3.3% in the year and 3.7% in the fourth quarter. Morrisons' wholesale division includes tie-ups with McColl's and Amazon.com Inc.
After rolling out its deal with McColl's, Morrisons said it was able to meet GBP700 million of annualised wholesale supply sales ahead of its initial guidance.
Looking ahead, the supermarket said it expects to begin its supply to a further 300 McColl's stores by the end of 2019, as it remains on track to meet GBP1.00 billion wholesale supply sales "in due course".
"We remain confident that Morrisons still has many sales and profit growth opportunities ahead, and expect that growth to be meaningful and sustainable," it added.
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