The supermarket posted 3% growth in like-for-like sales – excluding fuel – for the 28 weeks to July 30, up 2.6% in the second quarter of this year. Total sales were up 4.8% to £8.42bn, compared with £8.03bn during the same period last year.
Morrisons reported profit before tax grew 39.9% to £200M, while the firm’s underlying profit had risen 12.7% to £177M.
Net debt for the company was cut by £262M to £932M since the end of the 2016/17 financial year, which was now below its £1bn year-end target.
‘Seventh consecutive quarter’
Chairman Andrew Higginson said: “This is another good performance from Morrisons. Our seventh consecutive quarter of positive like-for-like [sales growth] means that we are able to report profit growth-on-growth for the first time in the turnaround.
“With good trading momentum and a strategy to build a broader, stronger Morrisons, the business is well set to continue to deliver consistent and sustainable growth for its stakeholders.”
Morrisons’ chief executive David Potts said the interim results reflected a new Morrisons that had come from its growth strategy.
“The capability of the team continues to improve and we are making strong headway with our plans to Fix, rebuild and grow,” said Potts.
‘Unique team of food makers’
“Our supermarkets continue their focus on improving the customer shopping trip and, in wholesale supply, we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers bring us.”
Morrisons said it had raised its incremental profit target for the year to £75M–£125M, up from £50M–£100M. It also expected to deliver a further £14M incremental profit from wholesale, services and online.
Commenting on the results, City Index senior market analyst Fiona Cincotta said improvements to Morrisons’ product offering and well-targeted investments in price have helped the company hold its own against the likes of Asda and discount supermarkets. Read the full comment below.
Meanwhile, meat processor Hilton Food Group has posted a £58.8M sales rise in its half-year results released yesterday (September 12), boosted by volume growth in Ireland, Australia and Portugal.
In the analysts’ view
Commenting on Morrisons’ interim results, City Index senior market analyst Fiona Cincotta said: “Like-for-like sales, excluding fuel, have grown by an impressive 3.0% in the first half, combining with tight cost discipline to drive a bumper rise in profits.
“Sales growth slowed a little in the second quarter, but at 2.6% was solid enough to quell fears of a more precipitous fall owing to competition.
“The market still remains tough, with a resurgent Asda and continued assault from German low-cost retailers weighing on prices. But improvements to Morrisons’ product offering and well-targeted investments in price have helped the company hold its own.”