- Supermarket Morrisons reported a drop in first half pre-tax profit of 43.4% to £82 million as it faced Covid-19 costs and lost profit in its cafe, fuel and food-to-go business.

Revenue including fuel was up 3.7% to £9.05 billion but group like-for-like sales ex-fuel and ex-VAT was down 0.3%. Second quarter group like-for-like sales ex-fuel and ex-VAT were down 3.7% with retail making a -4.6% contribution compared with 11.1% for the same period in 2020.

No dividend was paid in light of the offers from CD&R and Fortress with Morrisons reiterating that it is recommending CD&R's offer of 285p per share.

Full year guidance was unchanged with pre-tax profit and exceptionals including rates paid to be higher than the £431 million achieved in 2020/21 excluding the £230 million waived rates relief.

The company noted assumptions for the second half include significantly lower lost profit, minimal further direct Covid-19 costs, and mitigation of potential sustained cost increases in the supply chain.

During the second half Morrisons expects strong free cash flow and a further reduction in net debt, with net debt/EBITDA expected to be no higher than the 2019/20 level of 2.4 times.

Also as previously guided, for 2022/23 it expects material benefits of both no direct Covid-19 costs and the full recovery of lost profit, and remains confident of a year of meaningful profit growth for that year.

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