Morrisons pre-tax profits rise but Brexit weighs

Morrisons pre-tax profits rise but Brexit weighs

Morrisons pre-tax profits rise but Brexit weighs

Morrisons (LON:MRW) posted a rise in pre-tax profit on Thursday in its half year results, though it warned that the extended Brexit process had weighed on customer behaviour.

Shares in the company were up during trading on Thursday.

The supermarket chain said that for the half year to 04 August, profit before tax and exceptionals rose 5.3%, amounting to £198 million. Moreover, group like-for-like sales excluding fuel and VAT were up 0.2%.

Morrisons added that sales comparatives were strong as 2018-19 was boosted by favourable summer weather, the World Cup and the royal wedding. The poor weather this year was unable to match the heatwave that hit the nation the year prior.

“Very favourable summer weather last year became unfavourable this year, particularly in May and June, and there were no similar events to match last year’s boosts from the World Cup and royal wedding,” the supermarket chain said in its results.

Additionally, Morrisons said that the extended Brexit process had weighed on customer behaviour.

“Customer behaviour continued to be impacted by the uncertainties around the prolonged Brexit process, and consumer confidence continued to be low,” Morrisons added.

Morrisons had previously warned back in a first quarter trading statement that political and economic uncertainty continued to impact consumer confidence.

With the Brexit deadline fast approaching, the question remains – will the UK be able to secure a deal before its departure from the European Union?

Data by Kantar earlier in July revealed the first overall growth decline in the supermarket sector since June 2016.

Kantar did say, however, that this was not unexpected given the record sales experienced during the summer heatwave last year. Therefore, Morrisons is not alone in feeling the effects from last year’s stronger comparatives as all major grocers faced a challenging period.

Shares in WM Morrison Supermarkets plc (LON:MRW) were trading at  +4.14% as of 11:37 BST Thursday.