Morrison shares slide as supermarket group reports 52% drop in annual pre-tax profits

Otmane El Rhazi from Mindful Money » Shares.

Shares in Morrison slumped in early trading as the supermarket group reported its poorest annual results in some eight years.

This morning the embattled firm announced that in the 12 months to 1 February, underlying profit before tax nosedived by 52% on the previous year to £345m.

Following the news, its stock slipped by some 3% by 08:33am.

The UK’s supermarkets stalwarts are presently facing stiffer competition from the so-called hard discounters such as Lidl and Aldi and same-store sales at Morrison fell by 5.9% over the trading period.

But the group has also been accused of not keeping up with its competitors in terms of its online business and convenience store offering.

In a statement accompanying the market update chairman Andrew Higginson, 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.”

The group’s new chief executive David Potts starts next week, on 16 March, replacing Dalton Philips.

Speaking to the BBC, chairman Higginson added: “This has been a controlled and a planned reset of the business – it is painful, but it is the start of a new growth period we hope.”