Wm. Morrison Supermarkets Lifts Dividend by 10% to Yield 4.3%

LONDON -- The shares of Wm. Morrison Supermarkets (LSE: MRW  ) have risen 2.6% to 279 pence as of 8:50 a.m. EDT after the supermarket lifted its annual dividend by 10%. The payout declared for fiscal year 2013 came in at 11.8 pence per share, compared with 10.7 pence per share for FY 2012.

The dividend announcement accompanied full-year results that showed turnover up 3% to 18.1 billion pounds and underlying pre-tax profits down 4% to 901 million pounds. Morrisons admitted that like-for-like sales declined by 2% during the year, which was caused in part by customer numbers dropping by 400,000 to an average of 11.4 million a week. However, some 579 million pounds spent on buybacks during FY 2013 helped underlying earnings advance 7% to 27.3 pence per share.

Dalton Philips, the chief executive of Morrisons, said: "The sustained pressure on consumer spending was reflected in our like-for-like sales performance, which was not as good as it should have been. We have implemented a range of measures to address this and are making good progress in improving our promotional effectiveness and in communicating our points of difference."

Philips also confessed that the group's lack of convenience stores and minimal online presence had placed it at a "structural disadvantage." However, he said today that he had upped the target for new convenience stores by 40% and given the green light to an online food offer for 2014.

Based on today's figures, Morrisons is valued at 10 times earnings and offers a 4.3% income. Of course, whether that valuation, today's results, the move into selling food online, and the general outlook for the supermarket industry combine to make Morrisons a buy remains your decision.

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