People sit outside a Morrisons supermarket in Stratford, east London
Shares in British supermarket chain Morrisons gained in morning trade, as the company announced its expansion plans in the convenience and online sectors, despite weak first-half profits.
Morrisons shares were trading at 304.3 pence, up 2.39%, as at 8:13am GMT.
The company reported a decline in first-half profits as the country's retail sector continued to suffer from poor market conditions and dampened consumer confidence.
For the half-year ending 4 August, the company recorded a pre-tax profit of £344m ($542m, €408m), compared to £440m in the same period a year ago.
Underlying profit -profit before taxation, property disposals, development costs and pension interest declined by 10% to £401m.
Total turnover was stable at £8.9bn. Meanwhile, like-for-like sales, excluding the impact of store openings and closures, declined 1.6%.
Net debt increased to £2.5bn at the end of the first half, compared to £1.7bn last year.
"Consumer confidence and market conditions have remained challenging in the first half," Morrisons Non-Executive Chairman Sir Ian Gibson said.
Despite the weak results, the company increased its interim dividend by 10% to 3.84 pence.
The UK's fourth largest grocer after Tesco, Wal-Mart's Asda and J Sainsbury suffered from its under-representation in the fast-growing convenience store sector. Furthermore, it is yet to have an online presence.
New Financial Strategy
While the company expects no significant change to the challenging economic environment in the near future, it is looking to regain profitability with its convenience and online growth plans.
"Today we are outlining our financial strategy, which will support our key financial objectives of growing underlying earnings, generating cash and delivering superior total shareholder returns," CEO Dalton Philips said.
"This is against an economic backdrop which remains difficult for the consumer, but where our relentless focus on providing great value and quality to our customers, and improving the way we communicate Morrisons unique points of difference, have been reflected in a steady improvement in our like-for-like sales performance."
By the end of 2013, the company will have 100 convenience stores, about half of which will be in London and the South East. A new distribution centre in Bury will support the convenience stores in the North.
In addition, the company will launch its online service by the end of 2014 in partnership with Ocado.
With the new initiatives, the company expects better sales during the second half, adding that full-year results will be in line with its previous expectations.
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