Not the most exciting share, but with safeway conversion now complete (and how much better the old safeway stores are now) the shares should start to come back. Already started a nice rise from a recent low. Costs for conversions will still hold the price back but when that is out of the way, should be be nice. 190p

I think this is the main reason for today's jump in the share price. Their property portfolio is £2 billion more than their market cap', which they intend to realise.

Property

Morrisons property portfolio has an estimated market value of around GBP9bn. Over 90% of our estate is freehold, a considerably greater proportion than our major competitors. We expect to see the proportion of freehold properties reduce naturally as our convenience store programme expands. Additionally, in order to provide flexibility in the way we use our resources, we anticipate that a greater proportion of our new store acquisitions programme will be weighted towards leasehold properties.

We intend to manage our property portfolio more actively in future. We have commenced a review to assess the extent to which there may be opportunities to realise value for shareholders from our estate, whilst maintaining our traditionally prudent approach to financial management. This review is being undertaken within the context that there are clear control and flexibility benefits with freehold ownership and that the majority of our core estate will continue to be owned and managed on that basis.

Interim Management Statement

Christmas Trading Update

The Christmas period has been very challenging with a slowdown in market growth. Hard pressed consumers elected to economise and managed their budgets very tightly, buying less and shopping selectively across a range of formats and retailers. In the 6 weeks to 5 January 2014 total sales* excluding fuel were down by 1.9% (3.3% including fuel). Like- for-like sales* declined by 5.6% (7.1% including fuel).

more...

Ouch

Those share buy backs certainly a shrewd move eh! How much was it again £1b, what a waste.
2517

2517

Just going back through old notes which suggested that when there are buy backs, why don't the directors buy shares.

Suggested, that they don't know what to do with the excess money and don't know what to do with it and don't fancy the risk themselves.

I said umumumummh!

fred - i'm assuredly no accountant, but i'm certain share buy-backs cannot work the way you suggest .... to the best of my knowledge, it is a way of reducing the number of shares in issue and thereby increasing the value of the remainder - or something along those lines

or to eliminate any threats by shareholders who may be looking for a controlling stake

Buy backs are a way of reducing the number of shares in circulation and then held in deposit. It is the sign of a management that is bankrupt of new ideas to grow the business. It is a way to grow the EPS without doing any work. It is a big con trick especially if directors are rewarded with shares as a result of growth in EPS.

Spot on David.
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Nomura Buy 234.50 234.50 360.00 280.00 Reiterates

Jan 10 (Reuters) – WM Morrison Supermarkets PLC :

Natixis cuts target price to 215p from 245p; rating reduce

With MRW down to a 5 year low and reports of raising capital to release value to shareholders the question I am asking is: Is this a good entry price? My instinct says yes but is this the floor!! Remember that this is the UK's fourth largest grocer and is capable of throwing off loads of cash. Is it a buy at 236/236.5?

Makes interesting reading david lucas, about the net asset value. Read this article on Friday.

By Ben Martin

6:49PM GMT 10 Jan 2014




Break-up talk helped to stop the rot in Wm Morrison shares, which were sold off sharply a day earlier when the troubled supermarket group unsettled investors with its grim Christmas trading update.


The FTSE 100 company edged up 1.6, or 0.7pc, to 236.1p, after plunging 7.8pc on Thursday when it warned that like-for-like sales dropped 5.6pc in the run-up to the festive season. Cantor Fitzgerald analyst Mike Dennis today lent the shares support, by arguing the company was “vulnerable to a break-up by outside interests”, given that Morrisons’ net asset value per share of 230p is almost on a par with its current share price, suggesting there is no brand equity.


Some 300 stores worth a combined £7.5bn could be sold off – provided there were no objections from the Competition Commission – and Morrisons “would again become a small regional supermarket group”, he hypothesised. The previous management, possibly including former chairman Sir Ken Morrison, might then make a return to the residual business, the analyst said.

Thanks for the article DC.
It seems that there should be good value at this level. The price edged up on Friday by 1.6 so perhaps the floor has been established. It is a buy for me and I shall see what price it opens at tomorrow (Monday).

Good luck david. Long term I just wonder how they will sort the stores problems, especially losing the all important market share. Morrisons clearly are the most vulnerable supermarket to the likes of competition from the big boys and of course the likes of Aldi etc. I think I am right that they own more property than any of the other supermarkets. I really do not fancy their chances long term. They sat about to long with the likes of internet shopping and the home delivery service. I suppose they have no choice but to start to sell the bricks and mortar, not good long term.

Sunday newspaper roundup: Morrisons, BP, Premier Foods

Sun, 12 January 2014




Morrisons aims to return up to 800m pounds to investors by selling real estate, the Sunday Times said. The supermarket chain’s property holdings are worth 9bn pounds and it owns 90 per cent of the portfolio. Big shareholders think Morrisons could cut its freehold ratio to 80 per cent and stay overwhelmingly an owner of its own sites. The planned sale is designed to assuage investors angry at Morrisons’ bad Christmas trading, which forced it to issue an trading statement last week. Boss Dalton Philips will unveil a review of the group’s balance sheet in March.



Clearly shows the city will not like a too bigger sell off. :-))

This makes interesting reading from the other BB's!

Cantor today.

Morrisons (BUY from SELL) – Balance sheet support and a break up is possible
MRW LN (234p, TP 330p from 229P), Market cap: £5.42bn, EV £7.9bn
We are upgrading our recommendation on Morrisons to BUY from SELL and increasing our Target Price by 41% from 229p to 330p. The rationale for this is;
1) NAV per share is 230p or 98% of the current share price and we see Morrisons as being vulnerable to a break up by outside interests.
2) If the Competition Commission allowed it we believe that the company assets could be sold off and that the property review in March could show that 300 Morrisons stores are worth £25m each or £7.5bn equal to 95% of the current Enterprise value.
3) Morrisons would still have 195 25k sq ft stores, 100 convenience stores, Kiddicare and a manufacturing operation probably worth over £3bn. Morrisons would again become a small regional supermarket group possibly run by previous management or the return of Ken Morrison.
4) Current store margins exc. fuel are probably close to 5.6% despite reported trading margins being closer to 4.5% this year, or £785m, which still shows that Morrisons has a very profitable store operation. On this basis, even with another £60m of additional costs linked with on-line, Morrisons could maintain 2x cover on a 13p dividend in 2014/15 which means that the yield on the shares is 5.6%.
5) Morrisons FY15E EV/EBIT is now 9.9x, not totally distressed, but also with limited downside risk given food price inflation is 2%, new space is still contributing 2-3% and the consumer has marginally improving household income via rising employment. We believe Morrisons can achieve £700m+ PBT in 2014/15 and 25p+ of EPS so supporting a held dividend of 13p. BUY


Morrison’s reported a disappointing Christmas IMS update covering sales for the 6 weeks to 5th January with total sales including fuel flat at -3.3% and excluding fuel at -1.9% with LFL -5.6%. This performance was below expectations albeit management at the Q3 IMS had high expectations for Christmas/Q4 sales being LFL positive. The main issue was falling customer traffic despite more frequent shopping with smaller baskets. This has meant falling sales densities in the main supermarket estate. LFL exc. fuel sales growth (excluding the two extra trading days) at -6.1% (consensus/CFE -4%) was against easier Christmas sales comparatives from last year (Xmas-12/13 LFL was -2.5%), so 2 year LFL’s are down -8.6%. As we had anticipated, the same ‘Big Christmas Bonus’ scheme (7th Oct to 15th Dec) has become less effective against instant vouchering, discounters or in attracting new shoppers. Moreover, we believe voucher schemes like this often lead to loyal high spend shoppers splitting their baskets rather than spending more. We believe Morrisons should slow down the opening of M Local stores and concentrate on finding better high sales densities sites with better returns. We believe many of the 85 opened to date have sales per week below £50k and have been bought at premiums to the market. We believe that the -6.1% LFL could imply a -8.1% volume and +2% inflation, and if we assume own brand sales has performed better then brand volumes could be down -10%. Despite this Morrisons now faces very soft comparatives from last year (Q4 -4.1%) so we should expect this to be the low point for Morrisons in 2014.


Morrisons still has plenty to fix or concern us but the shares at these levels factor in the following all these issues in our view
1) Asda is reducing share and lower pricing this year which would impact the whole sector if Tesco followed.
2) Morrisons ROCE is expected to fall 1.6% to 8.1% this year, one of the lowest in the sector, as capital invested rises by 13% due to average net debt rising even faster, by 50%, Y/Y. In addition with 600k of new sq ft being added this year, we expect sales densities to fall by -1% as budget shoppers leave for discount formats and average basket size drops by -2%.
3) We also see structural issues with Morrisons, as lower own brand sales volumes will impact Morrisons higher 10%-13% margin manufacturing assets.
4) We are not convinced by Morrisons multi-channel strategy, Kiddicare is not performing and the £216m investment in 50% of Ocado’s second CFC Birmingham site may not produce accretive margins for 5 years given the diverse geography of customers.
5) The attractions of the full year dividend, 13p, up 10%, as guided by management in FY14E, gives a 5.6% yield but dividend growth.

Final Results

PRELIMINARY RESULTS FOR THE YEAR ENDED 2 FEBRUARY 2014 AND STRATEGIC UPDATE


Financial summary

· Turnover down 2% to £17.7bn (2012/13: £18.1bn)
· Like-for-like sales (ex-fuel, ex-VAT) down 2.8% (2012/13: down 2.1%)(1)
· Underlying profit before tax down 13% to £785m (2012/13: £901m)(2)
· Non-recurring exceptional costs of £903m
· Loss before tax £176m (2012/13: profit of £879m)
· Earnings per share (10.2)p (2012/13: 26.7p)
· Underlying earnings per share down 8% to 25.2p (2012/13: 27.3p)
· Final dividend of 9.2p. Total dividend for the year up 10% to 13.0p (2012/13: 11.8p) in line with guidance
· Net debt £2,817m (2012/13: £2,181m) after capital investment of £1,086m (2012/13: £1,016m)

Operating highlights

· Morrisons.com launched in January 2014 - performing ahead of plan
· Over 100 M local convenience stores now trading; second convenience distribution centre now operational
· IT systems programme development progressing well - providing platform for significant future cost savings
· 18 new supermarkets opened(3)
· Fresh Formats - tailored fresh food proposition now in over 200 stores
· 6,500 Own Brand products successfully launched in year; own label conversion programme complete
· Vertical integration - good progress in expanding manufacturing capability
· £300m, three year cost saving targets delivered


Strategic update

Comprehensive strategic review completed

· Enhanced focus on core supermarket business
· major investment in proposition; £300m in 2014/15
· £1bn of self help over three years identified - implementation underway
· Acceleration of new channel development - online and convenience
· Planned exit from non-core activities, including Kiddicare and Fresh Direct
· Property review completed
· New space pipeline reassessed
· Total non-recurring costs of £0.9bn

Resulting in:

· Stronger value leadership and a customer winning proposition
· Rebased profit outlook
· Strong balance sheet
· strong investment grade credit rating
· predominantly freehold property estate maintained
· Substantial cash flow generation
· £1bn over three years from operating improvements, working capital and reduced capex
· £1bn of property disposals over three years
· Generation of meaningful shareholder value over the medium term
· commitment to 5% minimum increase in dividend for 2014/15 and a progressive and sustainable dividend thereafter
· return of surplus capital as appropriate