Profits increase at Morrisons

Supermarket Morrisons have defied tough market conditions by announcing a near-doubling of half-year profits. This is a turnaround for the group which has struggled since its takeover of Safeway in 2003.

Underlying sales rose 2.7% in the first half and 3% in the 7 weeks since July 29. The dividend has increased 8% to 0.675p. Sir Ken Morrison, the Chairman, is retiring in early 2008 and implied that he may sell his 10% stake in the supermarket and this would be bought quickly by a private equity stalker.

Morrisons has abandoned plans to sell £1 billion worth of stores due to the debt crisis, which has affected the commercial property market recently.

Chief executive Marc Bolland, who joined Morrisons last September revealed a 95% increase in first half pre-tax profits to £250 million. The Dutch chief executive has refurbished the weary looking stores. He commented that Morrisons bake 90 types of bread in its stores but the bakeries were hidden at the back of the stores. They have now been moved so customers can smell the fresh bread.

Story link: Profits increase at Morrisons