Pre-tax profits soared 19 per cent to £116m in the 12 months to the end of January, despite having to bear the brunt of £7m additional depreciation as Morrison moved to a more conservative accounting policy.
But Ken Morrison, chairman, warned yesterday that the current year would continue to be competitive, a point rammed home by the latest business figures. Like-for-like sales growth in the opening weeks of this year was 2.7 per cent, well down on the 4.6 per cent in the comparable period of 1994, and below the 3.2 per cent recorded for the whole of last year.
The shares lost 3p to 144p on the news, but some analysts at least shrugged aside the gloom. One said she had shaded her current-year profits forecast, but added: "We are still anticipating good medium-term growth from them."
Mr Morrison said price competition had intensified in the second half of the year, when some operators had indulged in "significant below-cost selling".
Total sales grew 15.7 per cent to £1.78bn last year. Eight new stores were opened, taking the total to 73 and the group as far south as Coventry. Including another new outlet operational at Burton on Trent since the year- end, there should be another nine in the current year.
The new openings give Mr Morrison confidence that the market remains far from saturated.
"The performance of these stores has been excellent and their sales continue to back our belief that there are plenty of growth opportunities for us in the food retail market," he said.
Fully diluted earnings per share advanced from 8.07p to 9.3p, out of which a final dividend of 0.96p raises last year's payment to 1.2p for a 20 per cent uplift.