Morrisons, the UK’s fourth-biggest supermarket chain, has reported rising sales and profits as its turnaround strategy continues to bring results.
After taking out one-off costs, profits jumped 11.6% last year to £337m, the first increase for five years.
Like-for-like sales grew 1.7%, while total revenue rose 1.2% to £16.3bn despite recent store closures.
Morrisons, which is now the fastest-growing big four supermarket, said it was confident of improving further.
It warned, though, of “uncertainties” ahead, particularly of price rises of imported food if sterling stays at lower levels.
The pound fell sharply after the Brexit vote last summer, leaving retailers with the choice of raising prices or seeing their profits squeezed.
The supermarket said other pressures on costs included its pension scheme, which is currently in surplus, and higher staff pay. It said it would “continue to invest in colleague pay rates”.
Morrisons has been in the throes of a reorganisation for the past two years, led by chief executive David Potts, who took over the running of the business from Dalton Phillips in February 2015.
Changes have included pulling out of running smaller convenience stores under the M name, as well as a focus on cutting prices.
The company said its Price Crunch initiative had encouraged more customer visits.
It has recently also formed a tie-up with Amazon and invested in its range of “premium” products.
Mr Potts said: “Our turnaround has just started, and we have more plans and important work ahead.”