The Week That Was: Sir Ken hopes his trolley is back on a straight course

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The Independent Online

Embattled Wm Morrison chairman Sir Ken Morrison had a rare cause for celebration last week, trumpeting a return to profit after a disastrous two years that saw the supermarket chain plunge to its first loss in its 106-year history.

Speaking alongside his new chief executive, Marc Bolland, Sir Ken revealed that Morrisons' half-year profits before tax had jumped to £134.2m, compared with last year's loss of £82.1m. The result created a flurry of broker upgrades.

Morrisons has struggled to integrate Safeway, which it bought for £3bn in 2004, triggering a string of profit warnings.

Also returning to better times was clothing and furnishing group Laura Ashley, which reported a first-half profit for the first time since 2001. Pre-tax profits for the six months to 29 July climbed to £3m, up from a loss of £200,000 over the same period a year ago.

But troubled general retailer Woolworths reported first-half underlying losses of £66.8m compared with £36.2m for the first half in 2005.

Among other retail stocks, Debenhams revealed underlying sales up just 0.5 per cent for the 52 weeks to 2 September. Chief executive Rob Templeman said he did not expect the group's private equity investors to sell their £500m-plus stake when restrictions on share sales end in November.

Spain's Inditex reported higher first-half profits after its Zara chain opened 208 stores. Net profits rose 20 per cent to €295m (£198m), compared with €246.2m a year earlier.

The news was not as sweet for 645 Nestlé workers, who will lose their jobs at the food group's York chocolate factory as part of a restructuring programme.

Elsewhere, investors in copper miner Kazakhmys shunned a solid first-half result as the company revealed that its chief executive, Y K Cha, would depart in December for "personal reasons". Kazakhmys ended the week 5.2 per cent lower at 1,140p.

The beer industry raised a glass to John Young, founder of Young & Co Brewery, who died aged 85. Yet while mourning one of the industry's best-known figures, the market started speculating that the company could become a takeover target. Mr Young was chairman for 44 years.

Meanwhile, takeover target Gondola Holdings, which owns Pizza Express and is subject to a £559m bid from Cinven, reported a 4.1 per cent rise in annual like-for-like sales.

In other deal news, infrastructure group John Laing agreed to a £887m bid from Henderson Group's private equity arm, while Napster, the digital music company, appointed UBS to investigate takeover and strategic partnership options.

Fresh doubts were cast over the Government's plans to raise some £3bn from the sale of shares in British Energy after the nuclear power producer warned output would fall 3.2 per cent this year due to cracks in reactors.

Offloading a problem was MFI Furniture, which agreed to sell its loss-making furniture business for £1 to Merchant Equity Partners. The deal involves MFI paying MEP up to £74m to take on the business.

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