Customer growth drives record performance for Morrisons

Preliminary results for the year ended 31st January 2010

Financial summary

· Turnover up 6% to £15.4bn (2008/09: £14.5bn)

· Like-for-like sales (ex fuel, ex VAT) up 6.0% (2008/09: 8.2%)

· Profit before tax £858m (2008/09: £655m)

· Underlying profits¹ up 21% to £767m (2008/09: £636m)

· Net debt £924m (2008/09: £642m) after capital investment of £906m.

· Gearing of 19% (2008/09: 14%) and interest cover of 19 times.

· Basic earnings per share 22.8p (2008/09: 17.4p)

· Underlying earnings per share up 23% to 20.5p (2008/09: 16.7p)

· Total dividend for the year up 41% to 8.2p(2008/09: 5.7p) – with dividend cover of 2.5 times

Operating highlights

· Weekly average customer numbers up 7% ²

· Optimisation Plan completed, with all key targets exceeded

· New regional distribution centre opened in the South East, ahead of schedule

· 43 new stores ³

· Retailer of the Year for 2^nd consecutive year ⁴

· 10,000 new jobs created

Commenting on the results, Sir Ian Gibson, Non-Executive Chairman, said:

“Morrisons had another good year. Once again our focus on fresh food and great value appealed to shoppers everywhere, and we have successfully grown sales and profits to record levels. We completed delivery of the Optimisation Plan first launched four years ago, and we are well on the way to cementing our position as the Food Specialist for Everyone. The opening of 43 new stores in the year accelerated our journey from National to Nationwide.

We expect the economic environment to remain challenging, disposable incomes to be under pressure and value to remain a high priority for consumers. The Board believes that Morrisons unique offer of high quality, fresh food at great value prices will continue to attract customers from our competitors and drive market share growth in the year ahead. For the longer term, we will continue to utilise our balance sheet strength to invest for growth, with new space, new manufacturing capability and new systems priorities in the year ahead.

I am pleased that Dalton Philips will take up his role as our new CEO on March 29^th and I welcome him to Morrisons.”

¹ Excluding IAS19 pension interest, pensions credit and property disposals

² Represents average weekly till transactions in the year to January 2010 compared to the previous year

³ 45 new stores were opened in the year, 2 of which were replacements for existing stores

⁴ Awarded by Retail Week, the main industry periodical

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News Customer growth drives record performance for Morrisons