Despite what Shore Capital analysts called "a more than satisfactory" financial outcome for the year ended 3 February 2019, Morrisons (MRW) shares were flat on the release of these results. Perhaps that's because a lot of positives were covered in the November third-quarter update. In the event, adjusted pre-tax profits of £406m were marginally shy of Shore Capital’s forecast, although it still represents a creditable outcome, with growth in wholesale sales particularly encouraging.
Perhaps the market response points to investor caution. UK regulators recently dealt a "hammer blow" to a potential merger between Sainsbury’s (SBRY) and Walmart-owned Asda, while a new digital partnership between online grocer Ocado (OCDO) and Marks and Spencer (MKS) has raised eyebrows. It remains to be seen how Morrisons might grow its own market share – some had expected it to clean up from potential property disposals from the Sainsbury's/Asda deal – with the wholesale business and carefully managed new store openings seemingly top of the agenda for now.
Shore Capital still expects pre-tax profits of £442m for the year ending January 2020, giving EPS of 13.9p, compared with £406m and 12.9p in FY2019.
| MORRISONS (MRW) | ||||
| ORD PRICE: | 222.7p | MARKET VALUE: | £5.27bn | |
| TOUCH: | 222.6-222.7p | 12-MONTH HIGH: | 268p | LOW: 199p |
| DIVIDEND YIELD: | 3%* | PE RATIO: | 22 | |
| NET ASSET VALUE: | 196p | NET DEBT: | 22% | |
| Year to 3 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 16.8 | -792 | -32.6 | 13.7 |
| 2016 | 16.1 | 217 | 9.5 | 5.0 |
| 2017 | 16.3 | 325 | 13.1 | 5.4 |
| 2018 | 17.3 | 380 | 13.3 | 6.1 |
| 2019 | 17.7 | 320 | 10.3 | 6.6 |
| % change | +3 | -16 | -22 | +8 |
| Ex-div: | 23 May | |||
| Payment: | 1 Jul | |||
| *Excludes special dividend of 6p in respect of FY2019 and 4p in FY2018 | ||||
