Financial summary
- Turnover up 7% to £17.7bn (2010/11: £16.5bn)
- Like-for-like sales (ex-fuel, ex-VAT) up 1.8% (2010/11: 0.9%)
- Underlying profits before tax up 8% to £935m (2010/11: £869m) (1)
- Profit before tax £947m (2010/11: £874m)
- Operating margin up by 20bps (2)
- Net debt £1,471m (2010/11: £817m) after capital investment of £901m (2010/11: £595m)
- Gearing of 27% (2010/11: 15%)
- Equity retirement £368m
- Basic earnings per share 26.7p (2010/11: 23.9p)
- Underlying earnings per share up 11% to 25.6p (2010/11: 23.0p)
- Total dividend for the year up 11% to 10.7p (2010/11: 9.6p) – dividend cover of 2.4 times.
Operating highlights
- Record customer numbers – up 0.4m per week
- 34 new supermarkets opened (3)
- Own brand relaunched successfully through M Kitchen and M savers ranges
- Productivity improvements in stores (2.9%) and distribution (4.3%)
- HOT service programme delivering step-change in customer satisfaction (4)
- Significant progress in the systems replacement programme
- New South West regional distribution centre opened.
Strategy highlights
- Fresh Formats – new fresh food proposition delivered into 12 stores – roll out accelerating in 2012
- Vertical integration – acquisition of Flower World. Future investments in meat and fish announced
- Convenience - first three trial M local convenience stores performing well with further expansion planned for 2012 (5)
- Multi-channel – Launch of Morrisons.com on schedule for late 2012.
Commenting on the results, Sir Ian Gibson, Chairman, said:
"This was another good year for Morrisons, despite a tough economic backdrop. Record numbers of customers visited our stores and we delivered an 8% increase in underlying earnings and an 11% increase in the dividend, whilst also investing for the long term health of the business".
Dalton Philips, CEO, said:
"This has been Morrisons best year yet with another good financial performance and growth ahead of the market. Customers were having a tough time but we responded with a new M savers brand for budget conscious shoppers, promotions that customers understood, and industry leading service.
We know that 2012 will be tough, and we will be working hard to deliver even better value for our customers. At the same time, we have ambitious plans for the long term development of the business, through new supermarkets, convenience stores and the development of our multi-channel capabilities. I am confident that Morrisons will make further progress this year."
Outlook
We expect a challenging year in 2012. Building on good performance last year, a growing customer base, tight cost discipline throughout the business and the range of new opportunities that are being pursued, we are well positioned to continue to deliver profitable growth.
Notes
- Profit before exceptional items, property transactions and IAS19 pension interest
- After adjusting for the impact of fuel sales mix
- Includes one replacement of an existing store and the purchase of 19 ex-Netto stores from Asda. Excludes M Local stores
- Winner of The Grocer weekly service award 9 times, ahead of all competitors
- First three M locals at Ilkley, Wilmslow and Grafton Street, Manchester
The Group’s full financial statements (comprising the consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated cash flow statement and related notes) are available for download here.
