Morrison posts first-ever loss, announces revival plan |
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Thu, 23 Mar 2006 11:45
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LONDON: Food retailer William Morrison Supermarkets Plc. posted its first-ever full year loss in 107 years of operation and said it is implementing a recovery plan cutting costs and boosting margins.
The 380-store company, Britain's fourth biggest food retailer, incurred a loss of 313 million pounds on flat sales of 12.1 billion pounds as it took on costs of the order of 375 million pounds during the year on account of its buyout of the Safeway supermarket chain in 2004.
However, pretax profit for the 12 months to 29 January, without taking into consideration this charge was 61.5 million pounds, just one-third of the previous year's.
The company said like-for-like sales, excluding fuel, rose by 3.2 per cent in the seven weeks to March 19, compared with a 2.8 per cent rise in the previous six weeks.
Under the recovery plan, named optimisation plan, the company intends to add 90 basis points to the gross margin in three years, reduce 60 million pounds from distribution and staff costs and save 6 million staff hours from natural turnover. The company said many employees who leave the group will not be replaced this year.
Ken Morrison, chairman, said the results were the outcome of an extremely challenging year, but the company is focused on becoming the best grocer in town.
Analysts feel the company is handicapped on account of lack of clarity on a successor to chief executive Bob Stott, who had wanted to step down as soon as a replacement for him was found. Morrison said progress has been made in this regard and executive search firm Egon Zehnder is working on it.
The company has proposed an unchanged final dividend of 3.075 pence per share, giving a full-year payout of 3.7 pence. Morrison shares were at 210 pence, valuing the company at 5.58 billion pounds.
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