Coronavirus claims Morrison's final special dividend

The supermarket’s 2019 results reflected what had mostly been a trying year for supermarket retail, with group revenue down 1.1 per cent and retail dropping 1.4 per cent. Yet a tough Christmas period has been followed by a spike in sales. Over Morrisons' first six weeks, like-for-like sales were up 5 per cent, with this figure rising to the mid-teens in the past two weeks. The group is adding its pick-up capacity to more than 100 stores over the coming weeks as it looks to open up online channels that have been strained by rapacious demand. Morrisons' trial conversion of 10 McColl’s shops to Morrisons Daily convenience stores fared well and 20 more stores have been converted since the year-end. It will transition 240 stores in 2020.

The decision to withhold the final special dividend may look prudent in the coming months, although the group's balance sheet looks robust. Its pension schemes are all in surplus, while cash capital expenditure of £511m was lower than previously guided, due to fewer capital projects over Morrisons' second half. The group also beat its target of £1.1bn in disposals over its financial year after securing £120m for its Camden store.

Last year’s special dividend incurred a £94m cash outflow and these additional resources will allow it to boost its response to the coronavirus pandemic, which has included the addition of 3,500 delivery jobs and immediate payments to smaller suppliers.

Analysts at Shore Capital forecast full-year 2021 underlying pre-tax profits and earnings per share of £435m and 13.9p respectively, rising to £455 and 14.5p in 2022.