Morrisons reported losses of almost £800m following a sales slump and property write-offs, underlining the challenge faced by its new chief executive, David Potts.
Britain’s fourth-largest grocer said it would slow down the roll-out of its convenience store chain, M local, and plans to close 23 of those stores this year with the loss of more than 300 jobs.
Excluding new stores, sales at Morrisons tumbled 5.9% in the year to 1 February, a sharp acceleration on the 2.8% decline the previous year. Morrisons’ pretax loss soared to £792m, from £176m, after it wrote down the value of its property portfolio by £1.3bn.
Underlying pretax profits halved to £345m, the company’s worst performance for eight years.
While the annual dividend rises 5% to 13.65p, this year’s payout will be sharply lower – “not less than 5p per share”, the company said.
Potts, a Tesco veteran, takes the reins on Monday. He replaces Dalton Philips, who was ousted in January after five years at the helm.
Morrisons’ new chairman Andrew Higginson, also a former Tesco man, said: “Last year’s trading environment was tough, and we don’t expect any change this year. David Potts joins as chief executive next week. Under his leadership, we will focus on building trading momentum and being more like the Morrisons our customers expect.”
Morrisons is spending £1bn on price cuts over three years in a desperate attempt to win back customers from discounters Aldi and Lidl.
This article was written by Julia Kollewe, for theguardian.com on Thursday 12th March 2015 08.24 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010