Philips makes mark as Morrisons investigates online shopping

09/09/2010

Yorkshire supermarket group Morrisons has said it was investigating the use of internet shopping and would trial a new convenience store format as it reported increased underlying half year profits.

The Bradford-based group saw turnover rise 9.1% to £8.1bn over the six months to August 1 with like-for-like sales, excluding VAT and fuel, up 0.9%

Underlying profit before tax was up 14% to £410m, while profit before tax was £412m, down from £449m over the same period last year. The prior period included an exceptional pensions credit of £91m and gains of £3m from property disposals.

In its outlook, Morrison said it expected to see "low market growth" continue in the second half of its financial year, with further pressure on the consumer.

It said it had entered 2010 expecting a "tight environment" and continues to gain new customers and "to exercise strong control of costs" but expects to deliver its profit expectations for the year.

Chief executive Dalton Philips, who recently took over the position from Marc Bolland, who has moved to head Marks & Spencer, said: "Over the last six months I have spent time getting to know this great business and its people. Three observations stand out: Morrisons is a world class retailer; it has real and positive differences in its fresh offer, food production and craft skills; and there are many opportunities ahead to drive our top line, increase efficiencies in the business and to capture growth. Today we are outlining plans to build on our strengths and generate profitable growth.
 
"I am delighted to be leading a great company and with the whole team, I am determined to make Morrisons 'Better than Ever'."

Mr Philips said there were areas of the grocery market that Morrisons does not operate in which "afford attractive opportunities for future growth".

Morrisons is to trial a new convenience store format in the first half of 2011 and is exploring opportunities for internet shopping.

Morrisons has increased its interim dividend 14% to 1.23p.

Sir Ian Gibson, chairman of Morrisons, added: "Our first half performance has been solid, in a tight market. At a time when value is a priority for everyone we have continued our run of market beating sales growth, attracting more customers to Morrisons than ever before, reflecting our broad appeal."

Paul Manduca is to retire from the Morrisons board when its 2011 results are announced next March.

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