Morrisons - comment

Strong cash flow and recovery from the Hacking issues in Q1 were a relief. Higher taxes will be a headwind in H2, but management is still expecting FY EBITDA to rise. The competitive environment is not easy, but management agreed that competitor behaviour remains rational. Q2 volumes rose sequentially after the hit from the Blue Yonder hacking attack in Q1. Year-on-year, volumes were flat with the 3.9% sales rise largely inflation-driven. The company has also increased its cost-cutting programme to £600m (from £500m) to help reduce the impact of additional taxes, which began to kick in at the end of Q2.