Morrisons is dishing out £91million to its shareholders after seeing sales in the second quarter rise to a nine-year high.
Investors in the supermarket will be receiving an additional special interim dividend boosted by 2p, or 132 per cent, of 3.85p a share.
This is more than double what the supermarket paid its investors at the same point a year ago.
Cash for investors: Morrisons is dishing out £91million to its shareholders after seeing sales in the second quarter rise to a nine-year high
Investors will also be getting an interim ordinary dividend of 1.85p a share, marking an 11.4 per cent increase on a year earlier.
Morrisons said its strong sales were given a boost by ‘favourable weather’ and the World Cup football tournament.
The company said it had also started seeing the benefits of its rapid rollout of its deal to supply goods to convenience store and newsagent chain McColls.
Shares in Morrisons are down 0.34 per cent or 0.9p to 264.9p, having closed up over 3 per cent on Wednesday.
Despite its strong sales for the half year to 5 August, Morrisons’ pre-tax profits over the period fell by 29 per cent to £142million.
But that drop was largely due to a £51million net adjustment, including a previously announced bond tender offer, the company said. It also accounts for the way the group now estimates stock provisions.
Underlying pre-tax profits increased by 9 per cent to £193million.
Like-for-like sales, excluding fuel and VAT , grew 4.9 per cent compared to a year earlier.
Growth accelerated in the second quarter on this like-for-like basis, with sales rising by 6.3 per cent, marking a nine-year high.
David Potts, Morrisons’ chief executive, said: ‘Strong growth, including our best quarterly like-for-like sales in nearly a decade, together with another special dividend for our shareholders shows how new Morrisons can keep improving for all stakeholders.
‘Morrisons continues to become broader, stronger and a more popular and accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace.’
Looking ahead, the supermarket expects to be able to reduce its costs further across its Morrisons.com arm and its wholesale supply operations.
‘We are confident that Morrisons has many meaningful and sustainable sales and profit growth opportunities ahead,’ the group said.
Deal? Sainsbury’s and Asda announced its plans to merge in April this year
Commenting on the supermarket’s latest interim results, Richard Hunter, head of markets at Interactive Investor, said: ‘Bumps in the road remain, but Morrisons’ journey has certainly become more smooth in recent times.’
He added: ‘There are, however, some hints of caution. The company’s traditional weakness in terms of its convenience store and online offerings are still lagging in comparison to its larger rivals, whilst the proposed merger of Sainsbury and Asda will heap additional pressure on an already fiercely competitive sector.
‘The headline profit figure has fallen sharply due to what should be fairly exceptional items although this impact is lessened by the fact that underlying profit has risen 9 per cent.
‘In all, Morrisons has delivered more positives than negatives with this update, somewhat vindicating a share price which has seen a 26 per cent leap in the last six months, and which stands 9 per cent higher over the last year, as compared to a 1.2 per cent drop for the wider FTSE100.
‘The company still seems to be at an inflection point and, whilst there are clearly some reasons for optimism, market opinion remains divided on prospects, with the consensus of a shares as a hold suggesting that there may be better value elsewhere.’
In charge: The chief executive of Morrison’s is David Potts
Earlier this year Sainbury’s and Asda announced plans to merge in a deal that could be worth around £12billion.
Sainsbury’s and Asda have gone on record saying that suppliers will bear the brunt of a pledge to bring down the price of everyday products following their union.
As a merged entity, Sainsbury’s and Asda are looking to save at least £500million, £350million of which would come from savings when buying from suppliers.
The Competition and Markets Authority launched a formal probe into how the proposed merger between Sainsbury’s and Asda could affect customers, prices and local areas.
In order to get the deal given the green light, Sainbury’s and Asda could be forced to offload a number of their stores.
The Mail understands that Morrisons, which is the fourth-largest supermarket in the UK, is eyeing shops that Sainsbury’s and Asda could be forced to sell as part of a probe into the tie-up. And they could come at a knockdown price.