Registering the third consecutive quarter of growth, like-for-like sales, excluding fuel and VAT, climbed by 2% in three months to July 31 2016. Over the first half of the year, like-for-like sales were up by 1.4%.
Underlying profit before tax was up 11% to £157M. Reported profit before tax was up by 13.5% to £143M.
Total turnover fell by 0.4% to £8.03bn compared with £8.06bn during the first half of 2015/16.
‘Morrisons’ team of food makers’
Commenting on the results, Potts said: “I would like to thank the entire Morrisons’ team of food makers and shopkeepers who are working very hard to fix, rebuild and grow Morrisons.
“This turnaround opportunity is in our own hands and I am confident we will succeed.”
Potts said the retailer – which placed great emphasis on its own food producing capability and its vertically intregrated supply chain – would continue to focus on improving the shopping trip for customers.
Six priorities
Morrisons’ six priorities for the retailer remained: becoming more competitive, serving customers better, introducing local food products in regional stores, offering popular and useful services, simplifying and speeding up operations and making core supermarkets strong again.
Chairman Andrew Higginson said: “The new team has made a real difference and delivered further good progress across the board in the first half.
“Prices are lower, customers are being served better and quality is improving …”.
Higginson said the retailer was on track to deliver improved profits and returns for shareholders.
During the first half, Morrisons achieved the first £5M of incremental profit from wholesale, services, interest and online sales and remained confident of its £50M – £100M target in the medium-term.
£1bn three-year cost savings target
Morrisons expected to exceed its £1bn three-year cost savings target by the end of 2016/2017.
The retailer said it was too early to tell how the Brexit vote would affect the British economy but customers reported that their food shopping habits remained unchanged.
But the firm acknowledged: “There are some uncertainties, especially around the impact on imported food prices if sterling stays at its current lower level.”
Investors responded well to the interim results, with the retailer’s share price rising nearly 10% to peak at £2.11 before losing value in later trading. Morrisons’ share price closed at £2.08 yesterday.
Meanwhile, earlier this month the retailer pledged to cut the price of meat products by 12% in a further round of price-cutting after slashing the price of 1,000 every day grocery items earlier in the summer.
Morrisons’ results – at a glance
- Second-quarter like-for-like sales, excluding fuel and VAT, up 2%
- First-half like-for-like sales up 1.4%
- Total turnover down 0.4% to £8.03bn
- Underlying profit before tax was up 11% to £157M
- Net debt reduced by £477M to £1,269M