Morrisons share price rallies on special dividend

Wm Morrison Supermarkets’ (LON:MRW) share price has advanced in London this Thursday even as the blue-chip grocer posted lacklustre sales amid tough comparatives last year. The company, however, cheered investors with a special dividend and said that it was expanding its partnership with US e-commerce giant Amazon.

As of 08:42 BST, Morrisons’ share price had added 3.07 percent to 199.93p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.34 percent higher at 7,362.88 points.

Morrisons posts interims

Morrisons announced in a statement this morning that its total like-for-like sales ex-fuel/ex-VAT had climbed 0.2 percent in the half year ended August 4, with growth slowing from 4.9 percent in the prior-year period. The company’s total revenue meanwhile rose 0.4 percent to £8.83 billion.

Morrisons, however, delivered a 5.3-percent rise in profit before tax and exceptionals to £198 million. The blue-chip grocer further hiked its interim payout to shareholders by 4.3 percent and announced a special dividend of 2.00p, taking total interim dividend up 2.1 percent to 3.93p.

“I’m confident that Morrisons is on the right path for continued and sustainable growth,” the group’s chairman Andrew Higginson commented in the statement.

Amazon partnership

Morrisons further said in the statement that it was expanding its partnership with Amazon Prime Now to more cities across the UK, starting in the third quarter.

“Further news of success from its tie-up with Amazon and rebadging of McColl stores indicate that Morrisons is searching hard for areas it can grow into,” Ed Monk, associate director at Fidelity Personal Investing, commented, as quoted by City A.M.

According to MarketBeat, the London-listed grocer currently has a consensus ‘hold’ rating, while the average target on the Morrisons share price stands at 242.50p.

Today’s update follows the latest Kantar data which showed a fall in the grocer’s sales in the 12 weeks to August 11.