12th Sep 2019 08:59
(Alliance News) - WM Morrison Supermarkets PLC on Thursday raised its interim dividend following an improvement in profit and revenue but said Brexit weighed on consumer confidence.
In the six months to August 4, revenue edged up by 0.4% to GBP8.83 billion from GBP8.80 billion with total sales, excluding fuel, up 0.3% to GBP6.93 billion from GBP6.91 billion.
Pretax profit rose by 49% to GBP202.0 million from GBP136.0 million and on an adjusted basis before exceptional items, it rose by 5.3% to GBP198.0 million from GBP188.0 million.
Morrisons recorded exceptional gains of GBP10.0 million in the first half of the year, compared with GBP8.0 million last year, and recorded exceptional costs totalling GBP6.0 million, down sharply from GBP26.0 million. In the first half of last year, it also had recorded GBP33.0 million in costs associated with the repayment of its borrowings.
Like-for-like sales, excluding value added tax and fuel, were up 0.2% during the six-month period, a 2.3% rise year-on-year in the first quarter was slightly offset by a 1.9% fall in the second.
The company added that its wholesale operations contributed a 1.3% gain in like-for-like sales, but its retail arm suffered a 1.1% decline.
Like its peer John Lewis Partnership on Thursday, the FTSE 100 firm added that the retail market "remained challenging" with customer behaviour being impacted by Brexit uncertainty.
Morrisons said: "Sales comparatives were strong, with 2018/19 assisted by very favourable summer weather and events such as the World Cup and royal wedding. In contrast, this year's summer weather was largely unfavourable and there were no similar events to boost sales.
"Consumer confidence also continued to be weak, again affecting customer behaviour. In this more testing period, our profit performance was robust, free cash flow generation remained strong, and we were satisfied with our relative like-for-like performance."
The company proposed two interim shareholder payouts. A regular interim dividend of 1.93 pence per share, up 4.3% from 1.85p, and a special dividend of 2.0p.
Its total payout for the period will be 3.93p, a 2.1% rise on 3.85p delivered in the same period last year.
Morrison also announced a "multi-year partnership" with Amazon.com Inc, extending the supermarket's offering in the Prime Now online grocery home delivery service. The Morrisons at Amazon service is currently available in parts of London and the home counties, Leeds, Manchester and Birmingham.
Amazon UK Manager Doug Gurr said: "We are pleased to announce an extension of our wholesale relationship. This builds on our recent expansion of the Morrisons store on Prime Now, enabling us to offer Morrisons products to more Prime members in even more cities across the UK over the coming years.
“We are committed to growing our grocery business and continuing to innovate and deliver the things our customers will always care about including low prices, vast selection, and fast delivery. Our relationship with Morrisons is an important part of this growth.”
Looking ahead, Morrisons said it expects retail like-for-like sales to rise and has targetted cost saving opportunities.
It added a further GBP7.0 million in incremental profit from wholesale, services, interest and online, edging it closer to its medium-term target between GBP75.0 million and GBP125.0 million in incremental profit.
Shares in the company were 3.3% higher at 200.40 pence each in London on Thursday morning.
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