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| Profit recovery boosts Morrisons | |
| (about 2 hours later) | |
| Shares in supermarket group Morrisons have jumped 6% after the firm unveiled a return to profit and a sales pick-up. | |
| Pre-tax profits for the 25 weeks to 23 July came in at £134.2m ($253m), against a £82.1m loss a year ago. | |
| The Bradford-based group said it was now seeing the benefits of its 2004 takeover of Safeway, the integration of which had pushed it into the red. | |
| Excluding fuel, like-for-like sales - which strip out the impact of new stores - rose 4.6% during the period. | Excluding fuel, like-for-like sales - which strip out the impact of new stores - rose 4.6% during the period. |
| Morrisons added that in the first eight weeks of the second half of the year like-for-like sales were up 5.9%. | |
| In lunchtime trade, shares in the retailer were up 14.5 pence, or 6.2%, at 248p. | |
| 'Strong' performance | 'Strong' performance |
| While turnover in the first six months of the year was flat at £5.85bn, the Morrisons said the performance was "satisfactory" given that 66 stores closed during the period. | |
| Our business is growing again, and we are well on track with our targeted profit improvements Sir Ken Morrison Check Morrisons shares | |
| Customer numbers were also up 5.3% on a like-for-like basis, while converted stores had put in a "particularly strong performance" in bringing in new shoppers, it added. | |
| Chairman Sir Ken Morrison said the turnaround of the company following the integration of Safeway was ahead of schedule with sales at its 373 stores "stronger than anticipated". | Chairman Sir Ken Morrison said the turnaround of the company following the integration of Safeway was ahead of schedule with sales at its 373 stores "stronger than anticipated". |
| "We have more customers now than ever before in our history," he added. | "We have more customers now than ever before in our history," he added. |
| "Our business is growing again, and we are well on track with our targeted profit improvements." | "Our business is growing again, and we are well on track with our targeted profit improvements." |
| Market battle | |
| However, the latest data from market retail analysts TNS Worldpanel showed Morrisons' market share dropped slightly to 11% in the 12 weeks to September 10, from 11.2% at the same time last year. | However, the latest data from market retail analysts TNS Worldpanel showed Morrisons' market share dropped slightly to 11% in the 12 weeks to September 10, from 11.2% at the same time last year. |
| According to TNS, Tesco remained the UK's biggest supermarket with a 31.4% market share. Asda is in second place with a 16.7% share and Sainsbury's is third with 15.9%. | According to TNS, Tesco remained the UK's biggest supermarket with a 31.4% market share. Asda is in second place with a 16.7% share and Sainsbury's is third with 15.9%. |
| Morrisons' £3bn acquisition of former rival Safeway in 2004 created the UK's fourth-largest supermarket. | Morrisons' £3bn acquisition of former rival Safeway in 2004 created the UK's fourth-largest supermarket. |
| However, the deal led to a string of problems, prompting Morrisons to issue several profit warnings and pushing it into the red for the first time in its 106-year history. | However, the deal led to a string of problems, prompting Morrisons to issue several profit warnings and pushing it into the red for the first time in its 106-year history. |
| The difficulties also led to pressure for chairman Sir Ken to step down, which he will now do next year, and relinquish the day-to-day running of the firm, which he has now handed over to new chief executive Marc Bolland. | The difficulties also led to pressure for chairman Sir Ken to step down, which he will now do next year, and relinquish the day-to-day running of the firm, which he has now handed over to new chief executive Marc Bolland. |
| Turnaround plan | Turnaround plan |
| In an effort to turn around the business, Morrisons unveiled a three year Optimisation Plan, which has led to the closure of three depots since December - resulting in 1,800 job losses. | In an effort to turn around the business, Morrisons unveiled a three year Optimisation Plan, which has led to the closure of three depots since December - resulting in 1,800 job losses. |
| The company said its three-year plan was now on track to save £50m by cutting back on six million labour hours, while a further £30m should be saved by cutting back on duplicate facilities and improving efficiency. | The company said its three-year plan was now on track to save £50m by cutting back on six million labour hours, while a further £30m should be saved by cutting back on duplicate facilities and improving efficiency. |
| "The group's sales levels are slightly stronger than we had anticipated at the time of preparing the Optimisation Plan, and give us confidence for a stronger second half despite an expectation of a tougher trading environment," Morrisons said. | "The group's sales levels are slightly stronger than we had anticipated at the time of preparing the Optimisation Plan, and give us confidence for a stronger second half despite an expectation of a tougher trading environment," Morrisons said. |