Morrisons like-for-like sales ex fuel increased by 0.7% in the 13 weeks to 1 May. The supermarket, which has a 10.6% market share in the UK, said that prices decreased 2.6% compared to last year, amid fierce competition between the “big four” supermarkets in the UK, that has contributed to a price deflation across the board.
“Customers are responding and satisfaction levels remain ahead of last year. We are of course pleased with a second consecutive quarter of positive like-for-like sales, which demonstrates our aim to stabilise trade is taking effect,” said David Potts, chief executive.
“By improving the shopping trip for customers, we have started the journey to turnaround the business and make our supermarkets strong,” added Potts, who said he was “encouraged” by the company’s progress.
“There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can,” noted Potts.
The chain saw a 17% rise in sales from its Food to Go range and free-from range (70% year-on-year increase), while total sales fell 1.8%, affected by unprofitable stores closing down during the year. Morrisons also sold 140 M Local convenience stores last year.
The supermarket chain, UK’s fourth largest, also reported operating working capital improvement of £348m, property disposal proceeds of £300m, profits of £131m and net debt reduced by £594m to £1,746m.
Final dividend was at 3.50p, and the full year total dividend at 5p (2014/15: 13.65p).
“The board is pleased to be announcing that future dividends will be covered around two times by earnings per share, which is a policy that aligns shareholder returns with the long-term performance of the company, said Andrew Higginson, chairman.
The target for operating working capital improvement increased to at least £800m, said the company.For 2016/17 year-end net debt, the supermarket expects a range of £1.4bn-£1.5bn.
The company said it expects to realise the remainder of its £1bn three-year cost savings target, “but the turnaround will take time and will continue to require sustained investment in the proposition.”
“We also expect to exceed our three-year targets for £600m operating working capital improvement and £1bn property disposal proceeds,” it said.
