Morrisons has posted its worst results in eight years, as it revealed a profit loss of £792m before tax after taking account of a £1.3bn write down in the value of its supermarkets.
Trailing at the bottom of the big-4 supermarkets in terms of sales, the retailer said it planned to close 23 Morrisons M local convenience stores in the next year, as it focused on “improving the customer offer”.
The £792m profit plummet for the year to 1 February 2015, compares to a loss of £176m in the year 2013/14.
Like for like (LFL) sales were also down 5.9% for the period, while total turnover fell 4.9% to £16.8bn.
The retailer has indicated that it does not expect results to improve rapidly this year.
This comes as the company welcomed a new man to the helm of the struggling supermarket on 16 March. David Potts, ex Tesco boss, has been tasked with the job of reviewing Morrisons’ strategy to improve results.
Tough trading environments
Andrew Higginson, chairman, said: “Last year’s trading environment was tough, and we don’t expect any change this year. However, Morrisons is a strong, distinctive business – we own most of our supermarkets, have strong cash flow, and are famous with customers for great-quality fresh food at low prices. This gives us a good platform.
“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. We will invest more into the proposition and put customers at the heart of everything we do. We will listen and respond to our customers, and work hard every day to improve the shopping trip.
“Success measures will be simple – more customers buying more from us. More customers means more volume growth which, ultimately, will lead to better like-for-like sales, profitability and shareholder returns.”
Trevor Strain, chief financial officer, said: “We are making good progress on the plan to generate £2bn of cash while making £1bn of cost savings to invest in the business, and are determined to keep lowering prices and keep them consistently low for our customers.
“Some of the changes at Morrisons are beginning to bite. Although some key measures showed progress, particularly in the final quarter, there is still much more to do.
“Today we are providing enhanced disclosure around commercial income and more detail on depreciation. We believe this new financial disclosure is appropriate for shareholders.”