From the large number of burly security men at Morrisons’ agm in Bradford, you would have been forgiven for thinking chairman Sir Ken Morrison expected trouble.
But despite mounting hostility from City institutional investors, their services were not required. This was very much a day for the small investors who had come to support their chief in his hour of need.
Sir Ken was re-elected chairman with a majority of 80%. Just over 10% voted against, with 9% abstaining. Only one hand was raised in objection and a string of private investors among the 400 or so shareholders in attendance stood up to praise Sir Ken.
Alan Wisner said he was sure Morrisons was on the right path with Sir Ken in charge and urged it not to change course. Ann Shelton was another who had little time for the City institutions that have sought to loosen Sir Ken’s grip on the company.
Speaking after the meeting, she said: “Sir Ken is doing a fantastic job. City institutions seem to have completely forgotten the 37 years of consistent growth he has delivered.”
Sir Ken was clearly moved. He stressed how much the many letters of support he had received meant to him. There were even a few crowd-pleasing glimpses of his famously down to earth manner - when David Hutchinson had been comfortably re-elected as a director, he reassured him saying: “See, I told you you’d be OK.” But as
the announcement he had agreed to step back from the day-to-day running of the company and hand control of the operating board to Bob Stott was relayed, he appeared emotional and withdrawn.
And during the press briefing he was verging on taciturn, betraying his uneasy relationship with the media when asked whether he intended to take the company private. If he did that at least he “wouldn’t have to deal with you lot”, he quipped.
Despite the support he enjoys, Sir Ken is widely expected by the City to announce his retirement at next year’s agm.
Many City investors see him as overly synonymous with Morrisons and its struggle to convince former Safeway shoppers that it is a national brand.
The City has also been openly critical of his old-school corporate governance and the failure to appoint more independent non-executive directors. It was assuaged, however, by non-executive chairman David Jones’s announcement at the agm of plans to appoint four new non-execs within the next four to six weeks.
And David Somerlinck from investor PIRC said the signs were more positive and communication between the company and investors was improving. He added: “At this stage we are prepared to wait and see what happens over the next few weeks.”
John Saunders, of the Local Authority Pension Fund Forum, said: “It is good Morrisons is making strides in this area.” But he added: “We still have concerns over the urgency with which it is taking place.”
However, while the big institutional guns are holding fire, their patience is running out. The next few months will be critical, as Morrisons oversees the final push to digest Safeway and deal with what Stott euphemistically called “lumpy finances”.
He said Morrisons was looking to increase the speed of store conversions from three to two days and that, although new finance director Richard Pennycook does not officially join until October, work was under way with accountants KPMG to sort out the finances.
A clearer prognosis will emerge in October when Morrisons puts out its interims. Meanwhile, Sir Ken is determined to see the integration through. In his parting shot, he echoed the catchphrase of Magnus Magnusson: “We’ve started, so we’ll finish.”