Morrisons expected to post rise in profit and sales as tie-ups pay off

 
Alys Key
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Investors will expect to see profit growth and an increase in like-for-like sales when Morrison's reports full-year numbers on Wednesday.

Following bumper Christmas sales at the Big Four supermarket and on the back of positive grocery sales data earlier this month, the City has Morrisons pegged to lift like-for-like sales.

AJ Bell's Russ Mould said that analysts were hoping to see pre-tax profit reach £375m, versus £325m in the prior year. A further drop in net debt and a higher dividend are also on the agenda.

"Shares in the Bradford-headquartered FTSE 100 constituent have really gone nowhere fast over the last 18 months as investors have fretted about weak consumer confidence," commented Mould, who added that stiff competition from Tesco, Sainsbury and Asda, as well as the discounters Aldi and Lidl was another reason for investor jitters.

Read more: Grocery sales push up takings for the retail sector

But Michael Hewson, chief market analyst at CMC Markets said earnings were likely to be aided by tie-ups with McColl's and Amazon.

"It’s been a tough environment for food retailers the past few years but the WM Morrison story having undergone a significant rebound from its 2015 lows appears to have stalled a little," he said. "CEO David Potts appears to have drawn a line under the declines seen in the first part of this decade".

Like several other retailers, Morrisons announced last month that it will cut 1,500 jobs.

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