Chairman's statement

Another good year with record sales and customer numbers
"This has been another good year for Morrisons. In a difficult consumer environment, increasing numbers of customers have recognised the great value and quality of our offer and we have again delivered record profits. We have ambitious plans to take Morrisons unique offer to more customers through our accelerating new store programme and through the development of new channels."

I am pleased to report another year of strong progress for Morrisons. Sales growth was ahead of the market, confirming that our offer remains in tune with the needs of our customers, whilst our solid profit and dividend growth is evidence that we continue to thrive in a challenging economic environment.

Dalton Philips, our new CEO, arrived early in the year and quickly began to make his mark. He has shaped his senior management team with a great blend of new and existing talent, and between them they have developed a clear plan to deliver the next stage of Morrisons growth, with a vision to be 'Different and Better than Ever'.


Profit before tax was £874m, compared with the prior year's £858m which included an exceptional credit of £91m. Underlying profit before tax, which we regard as the measure of true business performance, was up 13% to £869m. Statutory basic earnings per share were 23.9p, an increase of 5% over the previous year, whilst underlying basic earnings per share increased by 12% to 23.0p. In accordance with our policy of increasing the dividend in line with underlying earnings growth and moving dividend cover in line with the sector average, the Board is recommending a final dividend of 8.37p per share, bringing the total dividend for the year to 9.6p, an increase of 17%.

Our cash generation was again strong, with cash from operations of £1.1bn, up £127m (13%) over the previous year. Capital expenditure of £592m was well within earlier guidance, and was lower than the prior year's £916m (which had included the opening of a new regional distribution centre and a package of stores from the Co-op). We expect the rate of investment to pick up again in 2011/12, as we invest in further distribution capacity and a higher rate of new store openings.

Net debt was £817m, a decrease of £107m over the year, to leave gearing at 15%, a level well below the average for the sector. At the year end the Group had undrawn, committed bank facilities of £625m.

The Board

Martyn Jones, the Group's Trading Director, took on the new role of Group Corporate Services Director during the year, extending his 20 years of service with the business, whilst stepping down from the Board.

Mark Gunter, the Group's Retail Director, retires from the Board following our AGM in June 2011, after which he will remain an adviser to the Group before full retirement in June 2012. Mark has served on the Board for over ten years of his 25 years of exceptional service.

We are deeply appreciative of their outstanding contributions to Morrisons growth over many years.

As a consequence of these changes, the Group will have two Executive Directors going forward, the Chief Executive and the Group Finance Director.

As previously announced, Paul Manduca, our Senior Independent Director, stepped down from the Board on 9 March 2011. Additionally, Brian Flanagan, a Non-Executive Director since 2005, has indicated that it is his intention to step down from the Board immediately following the AGM in June 2011. Paul and Brian have both made an enormous contribution, over more than five years, to the stabilisation and subsequent success of the Group and we are extremely grateful for their efforts.


Morrisons commitment to providing our customers with outstanding value, quality and service has once again been recognised with numerous industry awards. We were particularly proud to be awarded Employer of the Year in The Grocer Gold Awards, in recognition of our commitment to the training and career development of our 132,000 colleagues. I am delighted that our growth during the year will provide a profit share pool for them of £46m, an increase of 9% over last year. On behalf of the Board I want to express my thanks to them for their dedication, professionalism and hard work throughout the year.

Charitable donations

Our colleagues and customers are always enthusiastic supporters of our charitable activities and I am pleased that this year has been no exception. Raise a Smile is Morrisons campaign to support charities by bringing together our suppliers, customers and colleagues to help make a real difference. This year we were pleased to have raised £1.3m for Help the Hospices, our charity of the year which supports local hospices for children and adults with a life-limiting or terminal illness. We also contributed £0.4m to the Pakistan flood appeal.

Highlights 2010/11

Strong performance in tough times

  • Profit up year-on-year
  • Earnings per share increased
  • Cash generation improved

Click here to read our Operational review

Colleague recognition

  • Awarded Retail Employer of the Year 2010 by The Grocer Gold awards
  • Training our 132,000 colleagues through our award winning Academy
  • 9% increase in profit share pool

Shareholder investment and returns

  • Financial strategy reinforced
  • Three year commitment to double-digit annual dividend growth
  • Rebalancing of the split between our interim and final dividend payments to be c30:70 in future
  • Two year equity retirement programme to cancel £1bn ordinary shares purchased from the market

Click here to read about our Financial strategy


Profit before tax increased compared to last year's £858m, which included an exceptional credit of £91m.

12% increase

Underlying earnings per share increased to 23.0p from 20.5p in 2009/10.

17% increase

Total dividend for the year has increased 17%, making dividend cover 2.4 times.


The Board has recommended a final dividend of 8.37p per share, bringing the total dividend for the year to 9.60p per share.


The profit share pool for our colleagues is £46m, an increase of 9% on the previous year.


raised for our Charity of the Year - Help the Hospices.


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