Morrisons has seen its pre-tax profits almost double, suggesting the supermarket chain has bounced back from its troubled takeover of Safeway in 2004.
The UK’s fourth-largest chain reported pre-tax profits for 2007 of £612 million, up from £369m in 2006. Like-for-like sales excluding fuel rose 4.6 per cent, down from 5.2 per cent in 2007.
“In my last statement as chairman of Morrisons, it gives me particular pleasure to be reporting record earnings, and to see that more customers than ever before are experiencing the freshness, quality and value that Morrisons has to offer,” said long-standing chairman Sir Ken Morrison, who steps down from the board today.
Morrison will be replaced by deputy chairman Ian Gibson, who will succeed him as non-executive chairman. This will be the first time a non-family member has headed the Bradford-based grocer since it was founded in 1899.
The turnaround in fortune comes amid an overhaul for the Morrisons look, to be completed by 2010. This includes new-look stores, a new logo, new slogan, new product lines and new staff uniforms.
An extensive advertising campaign featuring football pundit Alan Hanson and singer Lulu has contributed to the reversal in fortune, pushing up customer numbers by half a million a week. Eight new stores have also been opened in the past year.
Morrisons also reports it has reduced its net debt from £772m to £543m, and has said it will return £1 billion to shareholders during 2008 and 2009 through a share buyback.
The tough high-street trading environment has failed to deter the chain. “This environment presents an opportunity for Morrisons,” said chief executive Marc Bolland. “Whilst many of our programmes are designed to improve product quality or the overall shopping experience, the great value we offer our customers will be at the forefront of our activity in the year ahead.”
Bolland also categorically said the retailer has no plans to acquire rival Somerfield. "The acquisition of Somerfield is not on the agenda of Morrisons," he said.
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