Wm Morrison Supermarkets Plc (MRW.L, MRWSY.PK, MRWSF.PK), Thursday, in its preliminary results for the fiscal ended January 31, 2010, reported an increase in profit for the full year, as turnover improved helped by continued customer growth. However, the company expects the economic environment to remain challenging.
For the full year, the U.K-based company's profit before tax increased to GBP 858 million from GBP 655 million in the previous year. Underlying profit before tax was GBP 767 million, up 21% compared to GBP 636 million a year earlier.
Results for the year included an exceptional credit of GBP 91 million, related to pension schemes, in connection with the move from a final salary basis to career average revalued earnings or CARE.
Profit for the year attributable to owners of the company grew to GBP 598 million or 22.37 pence per share from GBP 460 million or 17.16 pence per share reported in the prior fiscal.
Underlying earnings increased to GBP 537 million or 20.08 pence per share from GBP 441 million or 16.45 pence per share in the previous year.
Total turnover increased 6% to GBP 15.41 billion from GBP 14.53 billion a year earlier. Like-for-like sales, excluding fuel and VAT was up 6%, with growth in all regions.
Operating profit for the year was GBP 907 million, higher than GBP 671 million reported last year. Operating profit before pensions credit was GBP 816 million.
The company noted that its weekly average customer numbers grew 7%.
Fair value of investment properties at the end of the year was GBP 281 million, compared to GBP 259 million a year earlier.
Capital expenditure increased to GBP 906 million from GBP 678 million in the previous year, as a result of the development of a new South East regional distribution centre at Sittingbourne and the opening of 45 new stores, of which two were replacements.
The company said it concluded its Optimization Plan in January 2010 that was launched in 2006. "The plan contained a series of programmes designed to bring profit back in line with sector standards following the integration of Safeway and to make investments to shape the business for growth," the company noted.
Wm Morrison added that the Group's credit rating was upgraded by Moody's for the second consecutive year to A3.
Sir Ian Gibson, non-executive chairman said, "We expect the economic environment to remain challenging, disposable incomes to be under pressure and value to remain a high priority for consumers. The Board believes that Morrisons unique offer of high quality, fresh food at great value prices will continue to attract customers from our competitors and drive market share growth in the year ahead. For the longer term, we will continue to utilize our balance sheet strength to invest for growth, with new space, new manufacturing capability and new systems priorities in the year ahead."
The directors are proposing a final dividend of 7.12 pence per share, to shareholders of record on May 7, 2010, payable on June 9.
In addition, Wm Morrison said Dalton Philips will take up his role as the company's new chief executive officer on March 29, following the resignation Marc Bolland in November 2009.
MRW.L is currently trading at 300.1 pence, down 4.1 pence or 1.35%, on a volume of 3.7 million shares. In the past 52 weeks, the shares have been trading in a range of 233.5 pence-306.3 pence on the LSE.
MRWSY.PK closed Wednesday's regular trading at $22.69 on the OTC, while MRWSF.PK ended at $4.5.
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