Morrisons hails recovery as sales and profits rise

Morrisons has posted its first increase in half-year profits for five years as its sales recovery accelerates.

Shares (Berlin: DI6.BE - news) rose 8% as Britain's fourth-biggest supermarket reported a 13.5% rise in pre-tax earnings to £143m for the six months to the end of July.

Like-for-like sales climbed 2% in the latest quarter - the third quarter in a row of improvement and the best figure since 2011.

It is a far cry from steep declines seen more recently under former chief executive Dalton Philips as he battled to turn around the supermarket's fortunes.

Mr Philips was replaced last year by former long-serving Tesco (Frankfurt: 852647 - news) executive David Potts.

Mr Potts said Morrisons was still "in the foothills" of its recovery, but added: "So far, so good."

He said: "We are moving Morrisons' own-brand up a notch in quality and down a notch in price and it's proving popular with customers."

Morrisons said it was too early to tell how Brexit could affect the British economy but that it was yet to see a negative impact on customers.

The supermarket's belated online push appeared to be paying off with sales growth for the half-year mainly credited to internet sales.

It has been years behind its major rivals in this area and sought to catch up through tie-ins with online grocer Ocado and retail giant Amazon.

There was also an improvement in sales for its main supermarket sites, which have been struggling for years.

Morrisons, together with "big four" rivals Tesco, Sainsbury (Amsterdam: SJ6.AS - news) 's and Asda, has been engaged in a fierce price war thanks to the threat from discounters Aldi and Lidl.

Shares in Tesco and Sainsbury's were up following the latest figures.

Bradford-based Morrisons has closed dozens of stores employing hundreds of workers, as well as selling off its convenience store operation, as part of its turnaround efforts.