Shares in Morrisons were down on the FTSE 100 as profit-taking began after the supermarket chain reported a rise in underlying profit in the half year ended 1 August.
Group turnover was up 9.1 per cent in the period to £8.1 billion, while like for like sales, excluding VAT and fuel, increased 0.9 per cent.
Underlying pre-tax profit rose by 14 per cent to £410 million, while pre-tax profit was £412 million, down from £449 million in the previous year.
Morrisons said that it had reduced its net debt from £885 million last year to £849 million. The group said it would be increasing its interim dividend by 14 per cent to 1.23 pence per share.
The group again said that it had seen record weekly customer numbers and that it would be opening its first trial convenience stores next year.
In an outlook statement Morrisons said, "We expect low market growth to continue in the second half of the year, with further pressure on the consumer. We entered 2010 anticipating this tight environment, and are managing the business accordingly. We continue to gain new customers and to exercise strong control of costs, and as a result the Board has confidence that we will deliver our profit expectations for the year."
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, said, "The shares have succumbed to some profit taking in early trade, having painted a bright half-way picture.
"In particular, the 14% rise in first-half profit was towards the higher end of expectations, with total store sales growth continuing the recent strong trajectory. The new CEO also highlighted the strategic move into a convenience store format pilot and that an online presence was under consideration. The accompanying comments were comforting, reiterating that the company had retained a tight control on costs having anticipated the largely expected current consumer environment.
"Doubts do remain within the sector generally, particularly with the age of austerity combining with an already fierce operating environment. Nonetheless, Morrisons has been a successful growth story of late, and over the last three months the share price has added 12% versus a wider FTSE100 gain of 7%. Prospects for the company remain promising and the market consensus is that the shares are a buy."
By 09:25 shares in Morrison were down 1.61 per cent on the FTSE 100 to 287.80 pence per share.