Morrisons sees profits nosedive
Morrisons saw pre-tax profits fall 52% for the 2014 financial year, in its worst results in eight years.
The retailer posted pre-tax profit of £345m, down from £719m in the 2012/2013 financial year. Total turnover was also down 4.9% to £16.8bn.
“Last year’s trading environment was tough, and we don’t expect any change this year,” commented Morrisons chairman Andrew Higginson.
“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,” he said.
David Potts, Morrisons new chief executive, will take up his new role on 16 March, replacing Dalton Phillips who resigned in January amid poor sales results.
The Bradford-based supermarket has been criticised for its slow move into the convenience and online sector. In its review, the company said it opened 57 stores and closed six during the past year, bringing the total number of M local stores to 153, before the 2015 announced closures.
The supermarket reported £50m in savings earlier in the year, which were achieved. Trevor Strain, chief financial officer, said the supermarket would continue to focus on lowering prices: “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.”
However, Morrisons said its meat sector was thriving, with sales of its Signature Beef range up 100% year-on-year since it moved its beef and pork production out of store.
The retailer said: “During the period, we moved production of almost 120 beef and pork lines from in-store to our manufacturing facilities, which has led to longer shelf-life, with less waste and higher sales.
“For example, sales of our Signature Beef range is up 100% year-on-year since we started cutting and skin-packing the product in our meat processing plants. With more of our butchers’ time freed up to do what they do best – serve customers – counter sales are up by more than 10%.”
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- pre tax
- financial year
- £16 8bn
- 8bn “last
- “last year’s
- year’s trading environment
- “last year’s trading
- year total turnover
- £16 8bn “last
- 8bn “last year’s