Profits slump at Morrisons

Morrisons reported a plunge in profits this morning, highlighting its struggle with the cost of converting Safeway stores and integrating the chain it acquired in 2003.

Loss before tax was£73.7 million compared with a profit of£121.6 million last year. Exceptional costs for the 25 weeks to July 24 were£118.8 million compared with£21.8 million the previous period.

Morrisons chairman Sir Ken Morrison (pictured) said this morning: 'The conversion of Safeway stores to Morrisons and disposal of those that do not fit our model, has continued at a pace.'

Trading at Morrisons' core estate weakened in the early part of the second half, with like-for-like sales falling 5.2 per cent, excluding fuel.

The troubled grocer has been hit hard in recent months by trade union strike threats and board unrest.