Morrisons share price: FY like-for-like sales dip 2%

Wm Morrison Supermarkets (LON:MRW) has this morning updated investors on its full-year performance, posting a drop in like-for-like sales.

**Highlights from Morrisons’ statement:**
Total turnover during the period was £16.1bn, down 4.1% year-on-year. Store turnover of £12.8bn, excluding fuel, was down by 1.4%, comprising LFL down 2.0% (including a positive contribution of 1.0% from online) and 0.6% from new space.

Fuel sales fell by 12.6% to £3.1bn, with deflation a key feature. Towards the end of the year we led the market lower on fuel prices, and volumes responded. In Q4, despite deflation of nearly 20%, fuel LFL was almost flat.

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Sales improved through the year. In the second half ex-fuel LFL was down 1.3%, an improvement on the first half (down 2.7%). For Q4, LFL was up 0.1%, despite deflation of over 3%, and LFL Number of Transactions was up 1.6%.

Underlying operating profit was £339m, with operating margin down 53bps year-on-year to 2.1%. This excludes impairment and provision for onerous contracts, property disposal profits, loss on disposal of 140 M local stores, and the one-off set-up cost of the defined contribution pension scheme – see Figure 1 for details.

Further adjusting for store closure and restructuring costs of £60m as previously guided, underlying operating profit was down 22% to £399m (2014/15: £510m) and operating margin down 56bps year-on-year to 2.5%.

Net finance costs were £99m (2014/15: £98m).

Reported PBT was £217m, and UPBT(1) was £242m. Adjusting for the £60m store closure and restructuring costs, UPBT was down 27% to £302m (2014/15: £413m), in the middle of our guidance range of £295m-£310m – see Figure 1 for details.

New business development (NBD) costs for online and convenience were £47m (2014/15: £71m). These are included in all measures of operating profit and PBT.

Underlying basic EPS(1) reduced to 7.8p (2014/15: 10.9p).
David Potts, Chief Executive, said:

“By improving the shopping trip for customers, we have started the journey to turnaround the business and make our supermarkets strong. Our listening programme is informing and shaping the six priorities that are now driving the improvements that customers are noticing.

“Our strong balance sheet and cash flow provide the platform for turnaround and growth, but what makes us truly unique as food maker and shopkeeper is the personality and dedication of our thousands of colleagues. I am confident these strengths will help us fix, rebuild and grow Morrisons.”
**More to follow…**
As of 07:05 GMT, Thursday, 10 March, Wm. Morrison Supermarkets plc share price is 202.00p.