Morrisons profits jump despite cost rises

BBC News

The UK's fourth-biggest supermarket chain Morrisons has announced an 11% jump in full-year profits as it continues its turnaround programme.

The chain said it made underlying profits of £374m in the year to 4 February, up from £337m in 2016.

Like-for-like sales excluding fuel, which strip out stores open for less than a year, were up 2.8%.

The company said performance was "strong" despite the "challenges" of higher import costs..

Revenues rose by 5.8% to £17.3bn, up from £16.3bn.

Chairman Andrew Higginson said Morrisons was now entering its third consecutive year of growth.

The retailer also said it was "confident that a broader, stronger" Morrisons would continue to grow.

It announced a special dividend of 4p per share, taking the total full-year dividend to 10.09p per share, a rise of 85.8%.

It said it was "growing sales and profit" and expected growth to continue to be "meaningful and sustainable in the future".

"The special dividend reflects our good progress so far and our expectations for continued growth," it added.

Shares opened higher, but have subsequently fallen back.

One of the chain's priorities is to become more competitive.

It said that during the year, the impact of lower sterling on imported food prices was a "headwind for the industry, but helped by being a British business with a largely British supply chain, we took this as an opportunity to become more competitive for customers".

It said at Christmas, "despite the cost inflation pressures", a basket of key items was the same price as the same time last year.

Last month, Morrisons announced it would cut 1,500 middle management jobs.