Morrison’s has predicted that net debt for the year will be no higher than pre-pandemic levels and that profit before tax will grow to more than the £431m the group achieved last year had the group not waived its right to £230m business rates relief.
The news follows the supermarket’s recent trading update for the 14 weeks to 9 May, which showed that group sales were up 2.7% as a result of increased fuel sales and the easing of lockdown restrictions.
Fuel sales rose 17.5% with fuel volumes almost back to pre-pandemic levels by the end of the period. Online sales continued to outperform, increasing 113%, with wholesale like-for-like sales up 21%.
The group benefited from key seasonal events such as Mother’s Day and Easter where there was a strong recent improvement in food-to-go sales such as £3 meal deals.
However, during Q1 the supermarket incurred a further £27m of direct Covid-19 costs, which was reportedly inline with its expectations that were announced last year.
The costs were mainly due to “extra colleague absence” and more marshals during the first few weeks of 2021/22 when the second Covid-19 wave was still prevalent and Britain remained under strict lockdown.
David Potts, chief executive, said: “We said back in March that we expected to grow profits and reduce debt in the current year and I’m pleased to be both reiterating that guidance today and looking forward to a year of meaningful profit growth in 2022/23.
“Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, take-away counters and salad bars, and our popular cafés will soon fully reopen.”
He added: “We’re looking to the future with confidence as we see the growing warmth and affection for Morrisons from our customers flow into every area of the business.”