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Morrison Share chat

Discussion in 'General Share Chat' started by Steamy, Jun 19, 2015.

  1. ShortTracker

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  12. Mongoose82

    Mongoose82 A Legendary Member

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    "Morrison checked-out with robust result for H1 FY2016, exceeding the consensus analyst expectation on both LFL sales growth as well as pre-tax profits. Something of a landmark event, given positive half-year LFL seen for the first time in 4 years! It was particularly strong in Q2, when the Group saw +2% increase in LFL sales growth. Morrison's peers are yet to announce their own interim result, however, we believe there are realistic chance where Morrison has outperformed. The Group achieved free cash flow target of £2bn, 6 months in advance, and delivered first £5m of the incremental £50m-£100m pre-tax profit target during the period. Having delivered this, the Group has set a new targets of; (1) Cost savings to exceed £1bn by end FY2017; (2) Working capital improvement target increased from £800m to £1bn; and (3) End-FY2017 net debt target lowered from £1.4bn-£1.5bn to c.£1.2bn, and net debt expected to fall to less than £1bn by the end of FY2018. Its Chairman praised the new team, led by its CEO, David Potts who joined the Group in 16 March 2015 after leaving Tesco, whose contribution has made a "real difference". Morrison has closed 7 stores during the period, bringing total closure for the last two years to 28 stores (or 5% of the space). As a part of restructuring, the Group has also broadened its customer reach through strategic partnership with Ocado (recently negotiated new terms) enabling more customers to shop at Morrisons.com and with Amazon for wholesale agreement. Moreover, the Group has also partnered with Doddle and Timpson to enable "one-stop-shop", in line with its strategy to develop popular and useful services. We believe online and wholesale agreement will increase the sales, while Doddle and Timpson will likely to boost the footfall to the stores, which fits perfectly to the modern customer behavior of low volume, more frequent 'top-up' shopping. The Group's strengthened balance sheet driven by significant deleveraging and strong free cash flow, together with management confidence for further improvement has pave the way for increased interim dividends, in line with its new policy of sustainable dividend covering c.2x the underlying earnings. The management confirmed in the analyst conference call that the Group will continue to invest in pricing and will return "surplus capital to shareholders at appropriate time". Although this may result in unwanted consequence of price war and food price deflation, Morrison seem to have gathered momentum to push forward. The management so far sees no impact on customer sentiment from the Brexit and said it sourcing most from the British suppliers compared to others, which provide some comfort towards Brexit related foreign currency cost concern. We are encouraged by the Group's progress and more optimistic about the Group's future performance. At this moment, however, we remain more favorable to Sainsbury who traded at FY2017E P/E of 11.7x along with dividend yield of 5.1% to Morrisons (FY2017E P/E of 20.3x and yield of 2.5%). Beaufort retains its Hold rating on the shares for now, but will consider upgrading to Buy following review of forthcoming results from its sector peers."

    Beaufort Update this morning
     
  13. Groucho

    Groucho Member

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    Release date: 11 May 2021

    News Release


    Q1 Trading Statement - 14 weeks to 9 May 2021

    On track for strong future profit growth and low debt

    Total sales up 5.3% (inc-fuel)

    Group LFL ex-fuel up 2.7%, and up 4.7% inc-fuel

    Two-year Group LFL ex-fuel up 8.7%

    Online sales up 113%, and wholesale LFL up 21%

    On track for 2021/22 guidance:

    Year-end net debt/EBITDA to be no higher than the 2019/20 level of 2.4x

    Profit before tax and exceptionals to be higher than the £431m we would have achieved for 2020/21 had we not waived the £230m business rates relief

    Significant further opportunities ahead to continue to build a broader, stronger new Morrisons for all stakeholders:

    We now expect another year of meaningful profit growth in 2022/23

    We now intend to refresh our long-term capital allocation plans, within the context of our capital allocation framework, at the time of the Interim results in September


    For Q1 (14 weeks to 9 May), Group like-for-like (LFL) sales ex-fuel were up 2.7%, comprising contributions from retail of 1.6% and wholesale of 1.1%. Group LFL inc-fuel was up 4.7%, with fuel LFL up 17.5% and fuel volumes almost back to pre-pandemic levels by the end of the period (Figure 2). Total sales were up 3.3% ex-fuel (up 5.3% inc-fuel), with a 0.5% sales contribution from net new space. Despite some pressure from commodity and freight inflation, our continued investment in price for customers again led to year-on-year deflation during the period.

    Against the volatile trading of the early stages of COVID-19 last year, we sustained a robust sales performance throughout Q1 this year, especially as all but the first four weeks of the period lapped the early stages of the pandemic during March and April 2020. Key seasonal events such as Mother's Day and Easter were particularly successful, and there has been a strong recent improvement in food-to-go sales (Figure 3). During the pandemic there has been a renaissance of the supermarket in Britain and customers are enjoying cooking at home more. Customers have also embraced shopping online, and both Morrisons.com and Morrisons on Amazon are now complementing our supermarkets well. Online sales during Q1 continued to be very strong, with year-on-year growth of 113%.

    We benefitted too from our broader, stronger business with wholesale also adding to our supermarket and online scale. Wholesale contribution to Group LFL was 1.1%, equivalent to very strong wholesale LFL of 21%, primarily due to the c.230 extra McColl's stores that we started to supply in recent weeks. In addition, 25 McColl's stores were converted to Morrisons Daily during the period, taking the total to 56. We agreed several new supply arrangements, including with buying group Unitas; wholesaler Blakemore; and two other convenience forecourt retailers, Highland Fuels Ltd, based in Scotland, and Gardner Garages Ltd, in south-west England.

    With 2021/22 starting in February, lockdown was a feature of the early part of our financial year. During Q1, we incurred a further £27m of direct COVID-19 costs, which is in line with our expectations when we announced profit guidance for the year. These costs were mainly incurred due to extra colleague absence and more marshals during the first few weeks of 2021/22 when the second COVID-19 wave was still prevalent and Britain remained under strict lockdown.

    We again made substantial progress with the Sustain component of our Fix, Rebuild, Grow, Sustain strategy during the period. New initiatives included the acquisition of Falfish, a family-owned wholesaler of sustainably sourced seafood based in Cornwall. We also made two major new environmental commitments: to be supplied by 'net zero'-carbon British farms by 2030, and to remove all plastic bags from our stores over the next year.

    In the year ahead, we will open two new stores in Kirkby and Chelmsford, and two temporary replacement stores in Camden and Little Clacton. As previously guided, we expect net new space sales contribution to be around 0.2%.


    Outlook

    We have made a good start to 2021/22, with robust LFL sales against tough year-on-year comparatives. In addition, as the period progressed there were encouraging signs both of significantly lower direct COVID-19 costs and of the recovery of profit lost due to the pandemic in areas such as fuel and food-to-go (Figures 2 and 3 show the recent sales improvement). We are also looking forward to the lost profit gradually returning at our cafés from when they reopen next week.

    At the preliminary results in March, we guided 2021/22 year-end net debt/EBITDA to be no higher than the 2019/20 level of 2.4x. The recent recovery in fuel sales gives us high visibility and confidence that the temporary working capital impact will unwind, cash flow will be strong, and debt will fall.

    In addition, assuming society continues to unlock in line with the government timeline, we guided 2021/22 profit before tax and exceptionals to be higher than the £431m* we would have achieved for 2020/21 had we not waived the £230m business rates relief. We retain that guidance and, with the material benefits in 2022/23 of both no direct COVID-19 costs plus the full recovery of lost profit, we are now confident of a year of meaningful profit growth for that year.

    We have made excellent progress in recent months, and still have significant further opportunities to continue to build a broader, stronger new Morrisons for all stakeholders. As we make further progress towards our dual targets of low debt and higher profit, and with improved visibility around lower direct COVID-19 costs and recovery of lost profit, we now intend to refresh our long-term capital allocation plans, within the context of our capital allocation framework, at the time of the Interim results in September.

    * Consensus for 2021/22 profit before tax and exceptionals is currently £435m (Source: VUMA. Published on Investor section of Morrisons website, 5th May 2021), up from £431m at the time of the 2020/21 Prelims in March.


    David Potts, Chief Executive, said:

    "We've had an encouraging start to the year, with positive like-for-like sales and some good momentum across Morrisons both on a one and two-year view. We said back in March that we expected to grow profits and reduce debt in the current year and I'm pleased to be both reiterating that guidance today and looking forward to a year of meaningful profit growth in 2022/23.

    "The pandemic is not yet over, but it is in retreat across Britain and there is much to be positive about as something approaching normal life begins to take shape. Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, take-away counters and salad bars, and our popular cafés will soon fully reopen. The nation has a summer of socialising and sport to look forward to and we'll all be able to rediscover the joys of meeting up and eating well together. Whichever way consumers choose to enjoy their renewed freedom, we will be there for them.

    "We're looking to the future with confidence as we see the growing warmth and affection for Morrisons from our customers flow into every area of the business. Our increasingly special butchers, bakers, fishmongers and other food makers are helping to brighten shopping trips, and the growing reach of our online businesses is attracting new customers and broadening the appeal of new Morrisons."

    Screenshot_20210511-072345_Vox Markets.jpg

    http://www.rns-pdf.londonstockexchange.com/rns/1483Y_1-2021-5-10.pdf
     
  14. Groucho

    Groucho Member

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  15. Groucho

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    19 June 2021


    Possible Offer for Wm Morrison Supermarkets plc ("Morrisons")


    Clayton, Dubilier & Rice, LLC as manager of Clayton, Dubilier & Rice Funds XI ("CD&R") notes the press speculation regarding a potential transaction involving Morrisons and confirms that it is considering a possible cash offer for the issued and to be issued share capital of Morrisons.

    Rule 2.6(a) of the Code requires that CD&R, by no later than 5.00 p.m. on 17 July 2021 (being 28 days after today's date), either announces a firm intention to make an offer for Morrisons in accordance with Rule 2.7 of the Code or announces that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

    This announcement is not a firm intention to make an offer and accordingly there can be no certainty that an offer will be made. A further announcement will be made if and when appropriate.
     
  16. Groucho

    Groucho Member

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    19 June 2021

    Wm Morrison Supermarkets plc

    Statement re. rejection of conditional non-binding proposal

    The Board of Wm Morrison Supermarkets plc ("Morrisons" or the "Company") notes the recent announcement by Clayton, Dubilier & Rice, LLC as manager of Clayton, Dubilier & Rice Funds XI ("CD&R") and confirms that on 14 June 2021 it received an unsolicited highly conditional non-binding proposal from CD&R in relation to a proposed cash offer of 230 pence per Morrisons share for the entire issued, and to be issued, share capital of the Company to be made by funds managed or advised by CD&R (the "Conditional Proposal").

    The Conditional Proposal was subject to the satisfaction or waiver by CD&R of a number of pre-conditions including the completion of detailed due diligence and the arrangement of debt financing. The Conditional Proposal provided that Morrisons shareholders would also still receive the final ordinary dividend of 5.11 pence per Morrisons share announced on 11 March 2021.

    The Board of Morrisons evaluated the Conditional Proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the Conditional Proposal significantly undervalued Morrisons and its future prospects. Accordingly, the Board rejected the Conditional Proposal on 17 June 2021.

    The person responsible for arranging the release of this announcement on behalf of Morrisons is Jonathan Burke, Company Secretary.

    Important Takeover Code notes

    There can be no certainty either that an offer will be made nor as to the terms of any offer, if made, even if the pre-conditions referred to above are satisfied or waived.

    In accordance with Rule 2.6(a) of the Takeover Code, CD&R is required, by no later than 5.00 p.m. on 17 July 2021, to either announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Takeover Code or announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Takeover Code applies. This deadline can be extended with the consent of the Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Takeover Code.

    This announcement has been made without the consent of CD&R.
     
  17. Groucho

    Groucho Member

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