Morrisons set to reveal profits slump on ‘Super Thursday’ for UK retail sector
SUPERMARKET Morrisons will unveil its half-year results for the first time under new boss David Potts on a “super Thursday” for the retail sector next week.
Morrisons is expected to post another slump in half-year profits on Thursday, leaving investors keen to hear the turnaround plans of new boss David Potts as he presents his first set of results to the City.
Brokers at Barclays expect the Bradford-based chain to post a 2.5 per cent fall in half-year like-for-like sales, and a 23 per cent fall in earnings to £203m compared with a year ago. Mr Potts took over as chief executive from Dalton Philips in March. Mr Philips was ousted 12 months after the announcement of a three-year £1bn programme to cut prices to fight the supermarket price war. This battle has seen discounters such as Aldi and Lidl take market share from the Big Four major players - Tesco, Sainsbury’s, Asda and Morrisons. Morrisons is seen in some quarters as a takeover target with shares spiking in recent days on speculation that South African retail billionaire Christo Wiese is running the rule over the business. Mr Wiese bought Sir Richard Branson’s gym chain Virgin Active for £682m and fashion retailer New Look for £1.9bn earlier this year. Mr Potts signalled his intention to get back to basics when he said in April he would cut 720 staff at Morrisons’ head office, as it recruits 5,000 more shop floor workers to improve service levels.
He said he wanted the business to focus more on things that “matter to customers” such as product availability and helping shoppers at checkouts.
Brokers at Barclays said: “We expect Mr Potts to be very focused on the retail basics, which will likely involve investment in price, quality and service. While this may be the right way forward, we are wary of the profit impact.”
Thursday will also see the latest figures from Next, Dixons Carphone and Home Retail Group.