LONDON (Reuters) - Britain’s No.4 grocer Wm Morrison Supermarkets (MRW.L) posted first-half profit towards the top end of forecasts and said it was on track to meet its expectations for the year even though it anticipated no let-up in pressure on the consumer.
Morrisons, which trails Tesco (TSCO.L), Wal-Mart’s (WMT.N) Asda and J Sainsbury (SBRY.L) by annual sales, said on Thursday it made an underlying profit of 445 million pounds ($708 million) in the six months to July 29.
That compared with analysts’ forecasts in a range of 416 to 450 million pounds, with an average forecast of 434 million pounds, according to a company poll, and was up 1 percent on the 442 million pounds made in the same period last year.
The 455-store Morrisons, based in Bradford, northern England, said sales at stores open at least a year, excluding petrol and VAT sales tax, fell 0.9 percent.
That was a tad better than a fall of 1.0 percent in the first quarter and compared to analysts’ average forecast of a fall of 0.8 percent.
Total first-half sales increased 2.3 percent to 8.9 billion pounds.
Industry leader Tesco is seeking to recover from a shock profit warning in January by increasing promotional activity.
Latest industry data from Kantar Worldpanel showed Morrisons lagging the sales growth of its three big rivals as well as smaller players such as discounters Aldi and Lidl, though this is partly explained by Morrisons lower level of store openings.
“We expect the challenging economic environment and consumer pressures to continue through the second half of this year and into 2013 and we have developed our financial and operational plans accordingly,” the firm said.
“Notwithstanding these conditions, the board believes the group will meet its expectations for the year.”
Morrisons is paying an interim dividend of 3.49 pence, up 10 percent.
Morrisons shares, down 4 percent over the last year, closed on Wednesday at 279 pence, valuing the business at 6.75 billion pounds.
$1 = 0.6284 British pounds Reporting by James Davey; Editing by Mark Potter