- The Washington Times - Thursday, March 12, 2009

LONDON (AP) - Wm Morrison Supermarkets PLC, Britain’s fourth-largest grocery company, on Thursday reported that its full-year profit fell 17 percent as its tax bill more than tripled.

For the year ending Feb. 1, net profit was 460 million pounds ($634.5 million) compared to 554 million pounds. Revenue rose 12 percent to 14.5 billion pounds.

The bottom line reflected a steep increase in taxation from 58 million pounds in the previous year to 195 million pounds. In the prior year, Morrison benefited from an effective tax rate of 9 percent as a result of negotiations with the government on issues relating to the acquisition of Safeway stores.

Operating profit rose 9.6 percent to 671 million pounds, and the company boosted its full-year dividend by 21 percent to 5.8 pence.

The company called a halt to share buybacks, having returned 146 million pounds so far in what was originally a 1 billion pound program, deciding to conserve funds instead for acquisitions.



Morrison shares closed up 4 percent to 255.5 pence ($3.55) on the London Stock Exchange.

“Although today’s results have characteristically provided few surprises, the group retains momentum, with the result that investment opinion should continue to edge more positively,” said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.

Freddie George, analyst at Seymour Pierce Ltd., said results were broadly in line with expectations but said the company faced stiffer competition this year, especially from market leader Tesco. “We believe it will become harder for Morrison to improve market share in a more competitive market, which is likely to see greater discounting from Tesco trying to recapture market share,” George said.

Philip Dorgan, analyst at Panmure Gordon & Co., was downbeat about the company’s prospects.

“Looking forward, we think that the hike in capital expenditure and the promise to look for further acquisitions increases the risk profile, which is already being affected by the outlook for the industry, ” Dorgan said in a research note.

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On the Net:

https://www.morrisons.co.uk/Corporate/Investors/

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