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Morrisons (MRW) has announced a 2.8% rise in annual like-for-like sales, a double-digit jump in profits and a large reduction of net debt as its recovery under CEO David Potts continues.

The preliminary results for a 53 week period up to February 4, revealed that like for like sales excluding fuel and VAT climbed upwards by 2.8%, outstripping the 1.9% recorded for 2016/17.

Revenue jumped by 5.8% to £17.3bn, a leap of £1bn year on year, with profits before tax up by 16.9% to £380m from £325m the previous year.

The group has also managed to reduce its levels of net debt by a considerable £221m down to £973m, falling below its £1bn target.

Also, there was a net pension surplus of £574m, in comparison to the 2016/17 figure of £272m.

Alongside the sustainable sales and profit growth, other strategic highlights included

the group’s plan to return £237m to its shareholders as part of its capital allocation framework, and a rollout programme has begun to supply McColl’s convenience stores with branded and revived Safeway products.

Andrew Higginson, the Morrisons chairman said: “Morrisons is now entering its third consecutive year of growth, which is a credit to the whole team.”

“We will continue to prioritise consistent, meaningful and sustainable growth, which I am confident we are well placed to keep delivering.”

While David Potts, the chief executive added: “We had a strong year, becoming more competitive and increasingly differentiating Morrisons for all stakeholders. We are pleased to be paying shareholders a special dividend of 4p a share, which reflects our good performance so far and confidence for the future.”

“All parts of our progress so far have one common link: our colleagues. Listening to customers, responding, and improving the shopping trip are as important now as when we started this turnaround three years ago.”

The results revealed a £24m incremental profit delivered in this financial year, bringing the total so far to £42m of the £75 to £125m aimed for, with expected ongoing strong free cash flow.

The group’s outlook is optimistic that a broader and stronger company will grow further.

It is seeking to reach £1bn in wholesale supplies to all of its partners, as they are on track to meet the £700m target for this year including tobacco.

It also forecast that net debt will fall further this year.

Shares edged back 0.3% in early trading to 225.6p, but remain 2.6% up so far this year.

Morning update

Trading has been suspended in the shares of beleaguered alcohol retailers and wholesale Conviviality.

The AIM-listed group had its shares suspended at before the market opened this morning ”pending an announcement”.

Conviviality has seen its shares crash by around two thirds and over £350m wiped off its value after admitting a “material error” in its financial forecasts caused it to overstate earnings expectations for the current financial year by approximately 20%. 

On the markets this morning, the FTSE 100 has started well by rising 0.2% to 7,154pts.

Morrisons is down 1.3% to 223.3p as the City Snapshot went to press, despite its strong results this morning.

Morrisons (MRW) has also begun the day positively, as its share price increased by 1.4% to 229.5p, after the announcement this morning in its preliminary results of strong growth, revenue and profits before tax.

Its supermarket rival Tesco (TSCO) has also started brightly, with a jump up by 0.5% to 212.1p.

Fever Tree (FEVR) has recovered slightly from its shares plummeting yesterday, and has climbed up by 100p to 2695p. Other risers include McColls (MCLS), up 4.9% to 255p and Britvic (BVIC), up 1.2% to 686.5p.

The news is not any better for Greencore (GNC) after losing 30% of its value yesterday following its profit reduction warnings, particular from its United States operations, so far it has declined further by 4.25% to 121.84p.

Other fallers include Hotel Chocolat (HOTC), down 1.5% to 347.3p, Majestic Wine (WINE), down 1.4% to 436p, Dairy Crest (DCG), down 1.2% to 542p and Ocado (OCDO), down 1.1% to 590.6p.

Unilever ( ULVR) has fallen so far by 0.3% to 3,794p, Just Eat‘s (JE) share price has also suffered a slender fall of 0.1% to 774p.

Yesterday in the City

Despite Chancellor Phillip Hammond delivering upgraded growth expectations in his spring budget statement yesterday, the City failed to respond to the rather unspectacular address with the FTSE 100 dropping 1.1% to 7,138.7pts.

Yesterday was a terrible day for Greencore (GNC), with the UK-listed sandwich and food-to-go specialist losing 30.2% of its value to drop to 127.4p after announcing a profits warning related to failure to boost its business in the US to meet its manufacturing capacity.

City darling Fever-Tree also fell 3.7% yesterday to 2,592p, despite a 66% jump in annual sales as the City focussed on a slight reduction in profit margins at the drinks mixer manufacturer.

Conviviality (CVR), has another grim day as its shares wiped out its small progress since Friday morning, dropping 11.2% back to just 102p – the shares had been trading at over 400p before its shock profits warning on Thursday afternoon.

Other fallers included Britvic (BVIC), down 3.7% to 689.3p, WH Smith (SMWH), down 2.8% to 1,984p, Tate & Lyle (TATE), down 2.5% to 546.8p, Imperial Brands (IMB), down 2.3% to 2,494p, Unilever (ULVR), down 2.2% to 3,796p and British American Tobacco (BATS), down 2.1% to 4,167.5p.

The day’s few risers included Morrisons, rising 0.2% to 226.9p ahead of this morning’s results and Ocado Group (OCDO), up 0.1% to 598.4p.

Also on the up was C&C Group (CCR), which updated the market yesterday morning, up 1% to €2.81, Nichols (NICL), up 2% to 1,550p and McBride (MCB), up 3.6% to 163.4p.