Morrisons reports best quarterly performance in 9 years

Morrisons reports best quarterly performance in 9 years

Morrisons has reported its best quarterly performance in nine years.

The supermarket chain reported a rise in pre-tax profits by nine percent, reaching £193 million.

Chief executive David Potts said: “Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace.”

Potts is carrying out a turnaround plan where the boss is introducing a “Fresh Look” programme to over half its 500 stores, improving the product range and customer service.

Sales in the group have risen for the past 11 consecutive quarters.

Regarding Brexit, Morrisons has been given permission for streamlined customs checks to avoid border delays in the event of a no-trade deal.

“In our case it means that we are considered by the authorities to be a company who has policies and procedures that are thorough and wholly trusted and therefore any hold-ups at customs are, to some extent, simplified,” said Potts.

“I think it also avoids some fairly complex tariff refunds as well, so it’s not a big investment but it just felt like a sensible thing to do.”

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said the retailer still has room to improve.

“Retail sales are growing steadily, while its wholesale division is turbo-charging the group’s topline.”

“Flat margins could be a touch disappointing, but given the presumably lower margin in the wholesale business, it still suggests an improvement in the performance on the retail side.

“With a high proportion of freehold stores and debt falling, the group’s balance sheet looks robust, and that means cash is available to return to shareholders despite ongoing investment,” he added.

“Longer term, the group needs to strengthen its online offering, and convenience has also been a weak spot. However, management are taking steps to improve both areas and initial signs are good.”

Shares in the group (LON: MRW) are trading at 259,10 (0857GMT).