Supermarket group Morrisons announced a special dividend on top of its annual payout as management expressed confidence that the company will continue to grow sales and profits.
The Bradford-based grocer will pay a final ordinary dividend of 4.43p to lift the full year ordinary dividend for 2017 up 12.2% compared to the previous year to 6.09p and then up 86% to 10.9p by adding another 4p.

Sales in the 53 weeks to 4 February were up 6% to £17.3bn, with like-for-like sales excluding-fuel and VAT were up 2.8%.

Underlying profits before tax of £374m was up 11%, or 9.5% on a 52-week basis. Underlying earnings per share were up 12.2% to 12.19p.

Free cash flow of £350m was generated, helping cut debt to £0.97bn from £1.19bn a year before.

“We are confident that a broader, stronger Morrisons will continue to grow,” the company said, with chief executive David Potts, who has led the turnaround of the company since joining in 2015, highlighting that 2017 saw it become more competitive against its peers and “increasingly differentiated” for customers.

A move into wholesale contributed 0.4% growth to group LFL sales and is “on track” to exceed £700m by the end of 2018, with directors aiming to top £1bn in due course.

As well as a move into wholesale, Morrisons is adding more in-store services with 160 Doddle parcel pick-ups, 400 shops with Amazon lockers, 150 Timpson dry-cleaning concessions, and now five carpark hand-carwashes and a first tyre-change concession.

Online sales via Morrisons.com were expanded with store-pick services extended into further areas and 'Morrisons at Amazon' expanded into more postcodes and more cities.

Incremental profit of £24m was delivered from wholesale, services, online and interest in the year, bringing the total achieved so far to £42m of the Potts' £75-125m target.

Expanding on the reason for the special dividend, Potts and chairman Andrew Higginson said: “We are growing sales and profit, and expect that growth to continue to be meaningful and sustainable in the future. We are generating significant levels of free cash flow, which we also expect to sustain.

“The special dividend reflects our good progress so far and our expectations for continued growth. Looking forward, we will retain a strong and flexible balance sheet. We will be guided each year by the principles of our capital allocation framework in assessing the uses of free cash flow.”


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