With these half-year figures, WM Morrison's (MRW) chief executive Dalton Philips promised that "over time, half our earnings will be distributed to shareholders". As well as dividends, Mr Philips reckons that will include returning surplus cash.
It's envisaged that this cash will be partly generated by Morrison's new chain of convenience stores - 100 will be rolled out by the year-end - and an online grocery store that's to go live in January. Plans to slim down the store estate, and slash spending from £1.2bn this year to £650m in two years, should also help.
This is good news - but it shouldn't detract from an otherwise lacklustre half-year performance. Indeed, like-for-like sales (excluding fuel) fell 1.6 per cent as customer numbers dropped 1.3 per cent. Moreover, and even after stripping out exceptional costs related to convenience and online investment, weak sales and price cutting meant that underlying profit still fell 10 per cent to £401m.
Broker Oriel Securities expects full-year pre-tax profit of £820m, giving EPS of 25.6p (from £889m and 26.3p in 2013).
| WM MORRISON (MRW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 305p | MARKET VALUE: | £7.1bn | |
| TOUCH: | 304p-305p | 12-MONTH HIGH: | 312p | LOW: 247p |
| DIVIDEND YIELD: | 4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 226p | NET DEBT: | 48% | |
| Half-year to 4 Aug | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 8.94 | 440 | 13.3 | 3.49 |
| 2013 | 8.94 | 344 | 11.5 | 3.84 |
| % change | - | -22 | -14 | +10 |
Ex-div: 2 Oct Payment: 11 Nov | ||||
