Wm Morrison Supermarkets posted a return to profit in its first half and said on Thursday the second half had started well, sending its shares up 4.3 percent to a 28 month high.
The country's fourth biggest supermarket group, emerging from a costly and lengthy integration of former rival Safeway, said its like for like sales excluding fuel rose 5.9 percent in the first eight weeks of its second half.
For the first time in two years, colleagues ... have been able to concentrate, exclusively, on the day job, and this is bearing fruit, Chairman Ken Morrison said in a statement.
Morrison made a pretax profit of 134.2 million pounds in the 25 weeks to July 23 on sales flat at 5.85 billion pounds, reflecting 66 store disposals. Last year, Morrison made a first half loss of 82.1 million pounds.
Morrison shares, which have outperformed the food and drug retailing sector by 9 percent over the past 12 months, climbed 10 pence to 243.5 pence in early trading to value the company at 6.4 billion pounds.
Marc Bolland, who joined as chief executive at the start of September, said: Morrison has turned a corner.
Bolland would not comment on his strategy, saying he would make an announcement alongside full year results in March.
On August 3, Morrison issued a detailed trading update, saying it had beaten forecasts for first half sales and signalling a strong start to a three year plan unveiled in March and aimed at recovering from its purchase of Safeway.
The takeover coincided with a price war and which pushed Morrison to its first ever full year loss in 2005/06.
Morrison, which had 373 stores at the half year stage, said it was on course for 110 million pounds of savings this year and that most of a planned 90 basis points rise in margin over three years would be achieved this year.
Ken Morrison said good weather and the football World Cup were key factors behind its first half performance.
Finance director Richard Pennycock said current like for like sales momentum was likely to tail off a little later this year when it faces tougher comparatives and intense competition in the run up to Christmas.
Morrison left its interim dividend unchanged at 0.625 penny.