Some reasons to invest in Morrisons? |
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Published
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Wed, 27 Jul 2005 16:35
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After months of gloom, which seemed to follow the purchase of Safeway, it looks at last like national supermarket chain Wm Morrison Supermarkets may be returning to former successes and turning the corner back to profitability and sought after increases in sales figures.
Shares in the supermarket chain rose as Bob Scott announced increases in like for like sales of 5%. Scott, the companies Cjief exective admitted that the improvements needed to continue and indeed much work remained. Shares values on the stock market increased in value by around 5 per cent as investors warmed to the Wm Morrison Group after a series of profit warnings, which have been issued since the Safeway stores purchase; indeed it seems that the increase was partly a 'relief' that another warning had not made by the supermarket. A June statement indicated that profit may fall to between £50 million and £150 million, figures that stunned shareholders and sent the stock downwards.
"We are encouraged by the 5% like-for-like sales increase. We are making decent progress. These numbers are as good as anybody's except our friends at Cheshunt (Tesco)," Scott said. Clearly the improvement needs to continue for investors to keep faith in the chain, especially when sleeping giant Sainsbury's are improvong month on month, themselves climbing out of a difficult period. Combined with Asda and Tesco, everyone involved in the industry needs to keep on their toes.
The figures showed that converted stores, those which were changed from Safeway to Morrisons had shown a marked improvement in sales and excluding fuel own had shown up to 15.6 per cent like for like gains. Fuel sales are expected to have assited the existing Morrisons stores, which showed a dip of 2.7 per cent in like for like sales, bolstered by fuel sales, this moves to an increas of 1.1 per cent.
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