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Thursday, 19 September, 2002, 16:35 GMT 17:35 UK
Growth pays off for Morrisons
Morrisons store
Morrisons has expanded way beyond its northern base
Supermarket chain Morrisons has reported rising sales and profits growing as it continues its expansion programme.


It is a cracking set of results... I'd be amazed if analysts are not upgrading full-year forecasts

Andrew Fowler, Merrill Lynch
Pre-tax profits for the six months to mid-August were 114.5m ($177m), up from 98.6m in the same period last year.

Underlying sales grew by 5.7% over the period - faster than the 3.9% growth reported by Tesco earlier in the week - although Morrisons said sales growth had slowed slightly to 5% in recent weeks.

"I believe we are well placed to withstand the fiercely competitive conditions that prevail in our sector and move forward with confidence," said chairman Ken Morrison.

The company has managed to grow sales despite shunning marketing techniques such as loyalty cards and internet shopping.

It now operates 113 stores and last year joined the FTSE 100 index of leading UK firms.

Expansion plans

Morrisons is continuing to expand the number of stores it operates, with a dozen new supermarkets set to open over the next two years.

The company is looking to expand further into the south of England, and is also looking to open its first Scottish outlet.

But Mr Morrison said the company would not overstretch itself and would only expand at "a pace that suits our business".

He also dampened down speculation of any possible tie-up with rival Safeway.

"You get all sorts of ideas but operationally it's very difficult to operate different store formats," he said.

"We have a chain of stores very similar to each other while Safeway has some that are very small and others that are quite large."

Mr Morrison said that the company was on target for full-year profit forecasts of about 267m.

But some analysts thought the company may do even better.

"It is a cracking set of results, conservatively pitched, and I'd be amazed if analysts are not upgrading full-year forecasts beyond 270m," said Andrew Fowler, retail analyst at Merrill Lynch.

On the stock market, shares in Morrisons closed nearly 7% higher at 218.5p.

See also:

19 Sep 02 | Business
17 Sep 02 | Business
24 Jul 02 | Business
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