Morrisons unveils special dividend as profits rise nearly 17 per cent

 
Alexandra Rogers
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Morrisons reduced its debt by £221m to £973m (Source: Getty)

Morrisons' profits were by 16.9 per cent to £380m last year while the supermarket giant also enjoyed a boost in sales and revenue.

It revealed it is paying shareholders a special dividend of 4p a share, reflecting its "confidence for the future".

Profit before tax soared from £325m to £380m while revenue increased by 5.8 per cent to to £17.3bn, and group like-for-like sales were also up 2.8 per cent.

However, there was a £10m downturn in operating profit to £458m.

Read more: Supermarket sweep: Big four chalk up 12 consecutive quarters of growth

The supermarket said it has seen "meaningful, sustainable sales and profit growth, with strong cash flow" for 2017, having returned £237m to shareholders in accordance with its capital allocation framework and reducing its debt by £221m to £973m, below the £1bn year-end target.

Morrisons' chairman Andrew Higginson said: "Morrisons is now entering its third consecutive year of growth, which is a credit to the whole team. We will continue to prioritise consistent, meaningful and sustainable growth, which I am confident we are well placed to keep delivering."

The supermarket giant said it was on track to exceed £700m in its wholesale supply sales by the end of this year and for the figure to reach more than £1bn "in due course".

"We are pleased to be paying shareholders a special dividend of 4p a share, which reflects our good performance so far and confidence for the future," said chief executive David Potts.

Research Analyst at Accendo Markets Henry Croft said: "Morrisons shares opened near the top of the FTSE 100 leaderboard this morning after announcing a 4p special dividend, however a largely muted response has since seen the share price turn negative.

"The announcement of a special dividend likely helped to attract a few buyers early this morning, however without a commitment to further special dividends, and capping a more than 10% rally from February’s lows, many shareholders are deciding to take profits and run.

"With the ever-present threat of German discounters continuing to snap at the heels of the established big four, further sales growth is likely require to inspire shareholder confidence as today’s special dividend – presented as a solitary offering rather than the first of many – appears to be shunned."

Read more: Morrisons to be hit by £100m equal pay claim

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