Morrisons slumps after posting 35% drop in first-half profit

10th Sep 2015 07:09

(ShareCast News) - Shares in supermarket retailer Wm Morrison slumped after it posted a drop in underlying first-half pre-tax profit as revenue declined on the back of price cuts, and warned that the turnaround would take time.Pre-tax profit for the half year to 2 August fell 35% to £117m in the same period last year, missing consensus expectations of around £133m, while total sales were down 5.1% to £8.1bn.Like-for-like sales fell 2.7% in the first half and 2.4% in the second quarter.The company cut its interim dividend to 1.50p from 4.03p last year. These marked the first set of results under Morrison's new chief executive, David Potts, who is looking to turn the business around as it suffers from rising competition from discount chains such as Lidl and Alid.Potts said: "The immediate priority is to deliver a better shopping trip to stabilise trading performance.""It will be a long journey. We approach the challenge with energy, confidence and many strengths, particularly our strong balance sheet and cash flow, which enables investment in improving the customer shopping trip."The grocer also announced the propose closure of 11 further stores and said this would incur a restructuring cost of £20m, which will be included in underlying profit.On Wednesday, Morrisons confirmed the sale of 140 convenience stores for £25m, which was half the amount it was said to have expected."In all, and underlined by the new chief executive himself, the road to recovery still appears long. On balance, and weighing the group's comparatively strong balance sheet against concerns that it remains the most exposed to German discounters Aldi and Lidl, analyst consensus opinion currently points towards a sell," said Hargreaves Lansdown.At 0913 BST, Morrison shares were down 4.8% at 167.50p.