Morrisons profit up as it unveils share buyback

Supermarket group Morrisons has reported a rise in annual profit and issued details o f a share buyback plan.

The company announced a pre-tax profit of £874m for the 12 months to the end of January, up from the £858m it made in the same period a year ago.

Like-for-like sales, excluding fuel and VAT, were up 0.9 per cent.

Morrisons is the UK's fourth largest supermarket chain, after Tesco, Asda and Sainsbury's.

The group said it would return £1bn to shareholders over two years and was committed to double-digit dividend growth over the next three years.

It said it would accelerate its pace of new store openings, including a previously announced trial of convenience stores, and spend £32m on a 10 per cent stake in U.S. internet grocer FreshDirect to help launch an online business.

But it also said in a statement: "We expect the economic backdrop to remain challenging in 2011, with higher taxes, government spending cuts, inflation and rising unemployment all continuing to weigh on consumer confidence and disposable incomes."