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

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

@£2 the final 9.2p dividend alone may be worth considering.

Prime Wealth Sell 210.30 233.00 200.00 200.00 Reiterates

Bank of America Merrill Lynch Buy 210.30 233.00 270.00 245.00 Retains

Ex-divi wed 7th May (9.2p)

Sharecast - Morrisons is expected to announce an unprecedented fall in sales and Sainsbury’s will warn of slower growth ahead when the supermarket groups explain how they will take on the growing power of European value chains, the Sunday Telegraph said. Analysts expect Morrisons to say on May 8th that sales at stores open a year or more fell 7% in the last three months. Sainsbury’s reports annual profits the day before

Interim Management Statement

As anticipated the market has continued to be competitive throughout the period. In the 13 weeks to the 4 May 2014, total sales* excluding fuel were down by 4.2% (down 5.6% including fuel) and like for like sales* were down 7.1% (8.2% including fuel).

In March we announced plans to realise savings of £1bn over the coming three years to strengthen our business and reinforce our core customer proposition. Since then we have been making significant improvements to the layout of our stores and on 1 May cut prices permanently on over 1,200 of the products that matter most to our customers, firmly re-establishing our credentials as a value-led grocer with a focus on fresh food.

We continue to make good progress in all our strategic initiatives. The investment we have been making in our IT infrastructure and systems is on track, providing us with the platform we need to drive cost out of our business and deliver planned savings of £1bn over the next three years.

During the quarter we opened two core stores from our remaining pipeline as well as a further 11 M local convenience stores. We are on schedule to meet our target of having up to 200 convenience stores open by the end of the year.

Morrisons.com is performing ahead of our expectations with industry leading metrics on the key points of on time deliveries and replacement items. Following a successful launch phase in Warwickshire and Yorkshire, momentum is building rapidly and on Monday 12 May we will make our first deliveries in London. By the year end our online business will reach up to 50% of UK households and, together with convenience, is expected to account for over £500 million of annualised sales.

A detailed update on all these initiatives will be provided at our Interim Results in September.

The financial position of the Group remains strong with net debt of £2.8bn, in line with our expectations.

Dalton Philips, Chief Executive, said:

"The plans we set out at our results in March are on track. The reaction of our customers to the 1,200 "I'm Cheaper" price cuts we announced last week has been very positive. Although it will take time for their full impact to be felt, we are confident that these meaningful and permanent reductions in our prices will enable our clear points of difference to resonate strongly with consumers."

Outlook

Whilst the trading environment remains challenging, our financial outlook for the full year of underlying profit before tax in the range of £325m - £375m, remains unchanged.


*exc. VAT and reported in accordance with IFRIC 13

Deutsche Bank Sell 209.50 209.50 200.00 190.00 Downgrades

Chairman's Announcement

Wm Morrison Supermarkets PLC today announces that Sir Ian Gibson has informed the Board that he will not be seeking re-election at next year's Annual General Meeting.

The Board will conduct an orderly process to appoint a successor. The Board welcomes Sir Ian's continuing support as it implements its strategy. Further announcements will be made as appropriate.

Sir Ian said:

"This term will take me into my eighth year on Wm Morrisons Board, and this announcement gives the Board time to conduct an orderly search for a new Chairman and ensure a smooth transition."

Our nearest Morrisons has an under cover outside area just outside the entrance door and attached to the main building.

This time of year means 'Gardening Products'. ie. Outdoor plants, etc. It opens at 10am and they close it down at 5pm.

The store itself closes at 8pm and so from 5pm to 8pm this gardening area is unstaffed and just sits there unable to be selling anything.

We visited yesterday at about 4:30pm. They were already getting ready to close and found ourselves 5th in line to the temporary outdoor till. Prices were very attractive and plant quality was high and so we bought quite a lot of stuff to plant into patio tubs and similar.

Whilst there, I asked 'We came last week but couldn't buy anything from here. Why on earth does this section closes down at 5pm?'

The answer was, "That 's when we go home and the store doesn't have the staff to keep it open for any later. There is a ban on hiring extra people at the moment. This ban came down from Head Office and the manager is powerless to do anything. So we just have to close. It does seem silly but that's how it is."

Weak management, making daft decisions just has to be the problem with Morrisons, IMHO. The decisions being taken on just this department are not brave and are just lacking common sense.

You're talking bulls**t: Former Morrisons chairman Sir Ken launches astonishing public attack on chief executive at AGM

Sir Ken Morrison, son of founder William, fuming at grocer's performance
Launches broadside at chief executive Dalton Philips at annual meeting

He labels supermarket's recent results as 'disastrous'
Morrisons has fallen behind Sainsbury's, Tesco and Asda in recent years





http://www.dailymail.co.uk/money/news/article-2649765/Sir-Ken-Morrisons-public-attack-Morrisons-chief-executive-Dalton-Philips-meeting.html

Rise of the Lidl classes: Once they were deemed oh so tacky. As Aldi and Lidl are set to overtake Morrisons, ROSE PRINCE explains how they have won over the middle class
Shoppers deserting Sainsbury's, Waitrose and Tesco for Aldi and Lidl
Lidl now has more than 600 shops in the UK, and Aldi more than 500
Both expect to enjoy a turnover of around £7billion this year
Key to success has been winning over middle class shoppers


By Rose Prince

Published: 00:30, 12 July 2014 | Updated: 00:44, 12 July 2014




http://www.dailymail.co.uk/news/article-2689405/Rise-Lidl-classes-Once-deemed-oh-tacky-As-Aldi-Lidl-set-overtake-Morrisons-ROSE-PRINCE-explains-won-middle-class.html

div 7.3 sp down 45% what a great share to buy . could be a bid but the stores are fighting back I now along with all my family shop at mrw . great stores good value
very happy with my holding and will keep adding at this very good sp
have also bought VOD 5.7%

even if they cut it by 50% is still very good .but they will not

Why are they performing so bad then? You're having a laugh.

dream. just buy and trust me . been in STONE . STOKE . WOLVERHAMPTON .
DERBY TODAY WENT IN ALL THOSE MRW IN THESE TOWNS . STONE WAS EXCELLENT AND BUSY . SO I ADDED MOR TODAY FROM IN WEATHERSPONS IN STONE THE POSTIE NICE . HAD LUCH IN THE MRW STORE ALL 6 OF US

I would never dream of shopping in Morrisons, they would be my last preference. Time will tell but to me they are the store under most pressure from the discounters.
Also well behind in developments ie internet shopping.

Why wouldn't you shop in Morrisons dc? Tidy and well presented stores imo, especially the fresh produce. Norwich store is no worse than any of the other majors and is in the centre of the city with car parking and good bus links. I can certainly think of worse places to shop.

Ken Morrison at the most recent agm called the Chief exec's strategy 'Bull shit' and the most recent results 'disastrous'.

Where do I start? They are a store stuck in the 80's with store format and forward management thinking. Full of yellow balloons and yellow stickers and price cuts on items not no1 on the shopping list. (Forced into major price cuts now with Germany calling).Always going to be playing catch up with Tesco and Sainsbury ie Slow on small store purchases and internet shopping and a food delivery service. Again the same as Tesco, the management just sat and watched Lidl and Aldi. They were criticised that what they put in their Northern stores and tried to copy South did not work. Northerners tastes are not the same all round as Southerners and visa versa.


In my opinion - On purchasing Somerfield stores ruined them.

I went to a so called butcher not so long ago in our nearest Morrisons and he did not know the difference between silver side beef and topside. Bucher my arse. lol

And at the end of the day, why are they losing ground the fastest to any rival ?, may just be some of the points above.

ps - toiletries are VERY EXPENSIVE.

With a chart looking very sick like this my thinking must be of the majority of shoppers . Not a lot going for them sadly . Otherwise why has the share price crashed South ?


The German stores will rip (R.I.P Morrisons)them to shreds on price cuts as their overheads are so much lower ie store space in sq mtrs , staff overheads, less staff per store and store suppliers and far less management. They are going down the wrong road, watch for the next figures.




Why do stores just stagnate in the past and not prepared to change or update until they come under question from shareholders etc. Same as Marks just watching next creep up on them and leave them for dust.

dream I have always had good meat from mrw the only down side is some f the scum immigrants that work their lazy people and ignorant people the sooner Dalton goes the better and it is coming he will be gone by sept .
morrisons warehouse is full of lazy immigrants . and the manager flirts with them so can not do is job . I did send a e mail to the company in may about this issue
they have not replied . I no several workers their they have given up .