13th Sep 2018 08:13
LONDON (Alliance News) - Wm Morrison Supermarkets PLC on Thursday proposed a special dividend, more than doubling its interim payout, despite posting a drop in half-year profit.
Morrisons shares were down 2.4% at 259.55 pence early Thursday, the worst performer in the FTSE 100.
The UK supermarket chain upped its ordinary interim dividend by 11% to 1.85p. In addition, it declared a 2p special dividend, taking the total payout to shareholders to 3.85p compared to 1.66p a year ago.
For the six months to August 5, the 'big four' supermarket chain posted a pretax profit of GBP142 million, down 29% year-on-year from GBP200 million. This was after net adjustments of GBP51 million, including GBP33 million in one-off costs due to a bond tender offer and GBP28 million in relation to increased stock provisioning, Morrisons explained.
On an adjusted basis, pretax profit was up 9% to GBP193 million from GBP177 million.
Revenue for the half year increased 4.5% to GBP8.80 billion from GBP8.4 billion a year prior. New store contribution "was slightly higher than guided" as two stores opened in Cambridgeshire "got off to a better-than-expected start", Morrisons said.
In the half-year period, the supermarket reported an increase in like-for-like sales of 4.9% compared to 3% the year prior, if considered excluding fuel and VAT. Comparable sales in the second quarter of the year hit a "nine-year high" as they grew 6.3%, Morrisons added.
Including fuel and VAT, like-for-like interim sales were up 4.2% with second quarter up 6.4%.
Chief Executive Officer David Potts said: "Strong growth, including our best quarterly like-for-like sales for nearly a decade, together with another special dividend for our shareholders, shows how new Morrisons can keep improving for all stakeholders.
"Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace."
Retail like-for-like sales were up 2.1% while wholesale sales increased 2.8% in the period due to the grocer having progressed its wholesale supply partnership with McColl's Retail Group PLC "more quickly" than first expected.
In August, McColl's completed a rollout of 1,300 stores to its new supply chain partner Morrisons, after experiencing disruptions due to the collapse of cigarette wholesaler Palmer & Harvey.
Looking ahead, the FTSE 100-listed firm said it now forecasts achieving its GBP700 million target in total annualised wholesale supply sales ahead of its initial target date of the end of 2018.
"Our plan for GBP1 billion of annualised wholesale supply sales in due course remains unchanged," the company added.
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