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UPDATE 1-British supermarket Morrisons' profits dented by COVID-19 costs

Thu, 10th Sep 2020 07:28

(Adds details)

LONDON, Sept 10 (Reuters) - Morrisons, Britain's
fourth largest supermarket group, on Thursday reported a 25.3%
fall in first-half profit, hurt by costs related to the COVID-19
pandemic, but said it expected profit growth for the full year.

The firm, which said in May that full year 2020-21 profit
would be more weighted to the second half than usual, made
underlying pretax profit of 148 million pounds ($193 million) in
the six months to Aug. 2.

That compared with an analysts' average forecast of 146
million pounds, and 198 million pounds made in the same period
last year.

Morrisons said second-quarter group like-for-like sales,
excluding fuel, increased 12.3%, having risen 5.7% in the first
quarter.

It said COVID-19 costs were 155 million pounds, partly
offset by business rates relief of 93 million pounds.

All of Britain's big four supermarket groups - market leader
Tesco, Sainsbury's, Asda and Morrisons
- have seen sales boosted by the crisis.

But the flip side has been additional costs related to staff
and customer safety in stores, payroll and home delivery.

"We are confident of continued strong momentum into the
second half, improved free cash flow and net debt, and another
year of profit growth," Morrisons said.

Prior to the update analysts were on average forecasting a
full-year profit of 432 million pounds, up from 408 million
pounds in 2019-20.

Shares in the group, up 3% over the last year, closed
Wednesday at 195 pence, valuing the business at 4.7 billion
pounds.

($1 = 0.7686 pounds)
(Reporting by James Davey; Editing by Alex Richardson and Jan
Harvey)

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