• Underlying pre-tax profits down 27%, in line with expectations
  • Like-for-likes down 2% but show an improving trend in the fourth quarter
  • Identified further profit opportunities from online, manufacturing, wholesale and in-store services
  • Plans to refresh all stores by 2018/19

Morrisons full-year profits and sales have declined but the grocer has delivered an improving performance and will continue to invest in its turnaround.

Underlying pre-tax profit was down to £302m from £413m – the mid-point of the £295m to £310m forecast. The earnings number takes into account £60m of store closure and restructuring costs, including the closure of its convenience business and head office redundancies.

Like-for-likes fell 2% but showed an improving trend in the second half, edging up 0.1% in the fourth quarter “despite deflation of over 3%”. Like-for-like transactions were up 1.6% in the fourth quarter after the grocer “began to attract customers back”.

Revenue fell 4.1% to £16.1bn, hit by the closure of its convenience estate in the year.

Morrisons said it has identified £50m to £100m incremental underlying pre-tax profit in the medium term from “broader business opportunities” across online, manufacturing, wholesale, “popular and useful” services, and from lower interest costs.

The grocer last month unveiled a wholesale partnership with etail giant Amazon and said it can build on its existing pharmacy, dry cleaning an cafe businesses.

The grocer invested £373m into the customer proposition in the year, and £688m over two years, the majority of that to bring prices down.

The grocer said it has accelerated its Fresh Look store refresh programme and it aims to revamp its entire estate by the end of 2018/19. During 2015/16, Morrisons completed more than 50 refreshes, and plans a further 100 a year from 2016/17.

During the second half of the year, Morrisons restructured its head office, removing about 800 roles.

Morrisons said the “turnaround will take time and will continue to require sustained investment in the proposition”.

Morrisons chief executive David Potts said: “By improving the shopping trip for customers, we have started the journey to turn around the business and make our supermarkets strong. Our listening programme is informing and shaping the six priorities that are now driving the improvements that customers are noticing.

“Our strong balance sheet and cash flow provide the platform for turnaround and growth, but what makes us truly unique as food maker and shopkeeper is the personality and dedication of our thousands of colleagues. I am confident these strengths will help us fix, rebuild and grow Morrisons.”