Morrisons posts losses of £792m as 23 convenience stores come into the firing line

By Arabella Mileham

Published: 12 March, 2015

Morrisons has posted an annual pre-tax loss of £792m, as total turnover fell 4.9% to £16,816m in the 52 weeks to 1 February 2015.

Morrisons Morrisons

Morrisons has posted an annual pre-tax loss of £792m, as total turnover fell 4.9% to £16,816m in the 52 weeks to 1 February 2015. Like-for-like sales (excluding fuel and VAT) were down 5.9%, compared to 2.8% in the same period last year, with online sales contributed 0.6%.

The retailer also announced it is to close 23 of its 153 M Local convenience stores as it reviewed its overall convenience proposition.

Underlying profit before tax was down 52% to £345m, compared to £719m last year.

However, the beleaguered retailer insisted there was positive news despite the tough trading environment. It highlighted an improving trend in like-for-likes and volume key performance indicators (KPIs) through the year, and confirmed it was on track with its £1bn three-year cost saving target, with £22m of savings already achieved.

It reported on-off costs of £68m as a result of restructuring, the closure of its Kiddicare business and launch of its Match & More card scheme and a property impairment of £1.27bn due to tough market conditions.

David Potts Morrisons CEO Morrisons CEO David Potts

New chief executive David Potts, who will take up the reins on Monday, is expected to concentrate on improving the working capital and implementing further costs savings as it looks to stop haemorrhaging sales.The company is also keen to develop its online model - including trialling new delivery models such as click and collect - and will implement its first sales-based ordering trials.

Chief financial officer Trevor Strain said the company was making good progress towards generating £2bn cash to invest in the business and intended to invest more for customers to build trading momentum. "We are determined to keep lowering prices and keep them consistently low for our customers," he said.

Chairman Andrew Higginson, who joined the company in October, said the company would focus on "being more like the Morrisons our customers expect."

"Success measures will be simple - more customers buying more from us. More customers mean more volume growth which ultimately will lead to better like-for-likes, profitability and shareholder returns," he said.

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