Profit at bid target Morrisons falls 37% on COVID hit

September 9, 2021

LONDON (Reuters) -British supermarket group Morrisons, at the centre of a bid battle between two U.S. private equity firms, on Thursday reported a 37.1% fall in first-half profit, hurt by COVID-19 costs and lost profit in cafés, fuel and food-to-go.

The group, which trails market leader Tesco, Sainsbury’s and Asda in annual revenue, said it made a profit before tax and exceptional items of 105 million pounds ($144.5 million) in the six months to Aug. 1, versus 167 million pounds in the same period last year.

Morrisons said direct COVID-19 costs were 41 million pounds, while 80 million pounds of profit was lost in cafés, fuel and food-to-go areas because of the pandemic.

In a results statement that looks likely to be Bradford, northern England, based Morrisons’ last as a publicly listed company, it said total revenue including fuel was up 3.7% to 9.05 billion pounds, with like-for-like sales, excluding fuel and VAT sales tax down 0.3%.

They were down 3.7% in the second quarter, having risen 2.7% in the first quarter.

Morrisons maintained its profit guidance for the full 2021-20 year – profit before tax and exceptionals including business rates paid to be higher than the 431 million pounds made in 2020-21 excluding 230 million pounds of waived rates relief.

But it warned of some industry-wide retail price inflation during the second half, driven by sustained recent commodity price increases and freight inflation, and the current shortage of HGV drivers.

($1 = 0.7267 pounds)

(Reporting by James Davey; Editing by Kate Holton)

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