Morrisons pre-tax profit down by 62.1%
Morrisons (LON:MRW) confirmed on Thursday morning that its profit fell as the supermarket took on £290m extra costs due to the pandemic.
The FTSE 100 company confirmed its profit before tax fell by 62.1% to £165m for the year ending on 31 January. The supermarket’s total revenue rose by 0.4% to £17.6bn.
Throughout the year the supermarket spent an additional £99m paying staff, £68m on bonuses for employees, £46m to protect its customers, as well as donating £12m to food banks.
Other costs, including markdowns and seasonal waste, added up to £65m.
Morrisons‘ repayment of the government’s business rates relief also made an impact on profits, in addition to its decision to boost its online capacity.
The company spent an extra £10m in January due to Covid-19, incurring further costs than anticipated.
Profit was also impacted by Morrisons’ decision to boost its online capacity during the pandemic, and to repay the government’s business rates relief.
Ross Hindle, analyst at Third Bridge, commented on the supermarket’s outlook.
“Despite a strong top-line performance, Morrisons is expected to incur c.£290m in Covid-19 related costs. Stores have had to introduce expensive social distancing measures whilst also hiring more staff to meet increased demand.”
“Our experts expect Morrisons to continue to develop its wholesale business and to grow its margin accretive non-food home-ware and clothing offer. Specialists believe further growth in these areas will continue to differentiate Morrisons relative to the Big 4 and could offer some margin protection to the Group.”
David Potts, chief executive of Morrisons, commented on the supermarket’s role during the pandemic, and looked forward to targeted growth during the coming year:
“Morrisons key workers have played a vital role for all our stakeholders during the pandemic, especially the most vulnerable in British society, and their achievements over the last year have been remarkable. I am delighted that we are recognising their enormous contribution by becoming the first supermarket to pay a minimum of £10 an hour to all store colleagues. We are also today showing our continuing gratitude and appreciation for the incredible work of other key workers in the nation, by extending our 10% discount for NHS staff for the whole of 2021,” Potts said.
“I’m pleased with the greater recognition, warmth and affection for the Morrisons brand from all corners of the nation, following a year like no other. We must now look forward with hope towards better times for all, and we’re confident we can take our strong momentum into the new year, targeting profit growth and significantly lower net debt during 2021/22.”
 confirmed on Thursday morning that its profit fell as the supermarket took on £290m extra costs due to the pandemic.){kind=link}