British Supermarket Morrisons Sees Profits Dented By COVID-19 Costs
Morrisons, Britain's fourth largest supermarket group, has reported a 25.3% fall in first-half profit, hurt by costs related to the COVID-19 pandemic, but said it expected profit growth for the full year.
The firm, which said in May that full year 2020-21 profit would be more weighted to the second half than usual, made underlying pretax profit of £148 million in the six months to August 2.
That compared with an analysts' average forecast of €162.8 million (£146 million), and €217.8 million (£198 million) made in the same period last year.
Morrisons said second-quarter group like-for-like sales, excluding fuel, increased 12.3%, having risen 5.7% in the first quarter.
It said COVID-19 costs were €170.5 million (£155 million), partly offset by business rates relief of £93 million (€102.3 million).
Feeding The Nation
"From the start of the pandemic we stepped up and put the company's assets at the disposal of the country to help feed the nation," commented David Potts, chief executive. "Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public's appreciation of all the vital work our colleagues are doing.
"We are now looking forward to holding on to what we created in the first half, building on our colleagues' inspiration and innovation, and sustaining the momentum of a broader, stronger Morrisons."
All of Britain's big four supermarket groups - market leader Tesco, Sainsbury's, Asda and Morrisons - have seen sales boosted by the crisis.
But the flip side has been additional costs related to staff and customer safety in stores, payroll and home delivery.
"We are confident of continued strong momentum into the second half, improved free cash flow and net debt, and another year of profit growth," Morrisons said.
Prior to the update analysts were on average forecasting a full-year profit of £432 million, up from £408 million in 2019-20.
Shares in the group, up 3% over the last year, closed Wednesday at 195 pence, valuing the business at £4.7 billion.