The beleaguered supermarket chain announced a loss before tax of £73.7m for the 25 weeks to July 24, compared with a profit of £121.6m for the same period last year. Morrisons claimed that its profits guidance for the full year of between £50m-£150m was still relevant, but that it now expected its pre-tax profits to be on the low side of this prediction.
Richard Pennycook, who joined Morrisons as finance director on October 1, admitted the company would be facing a loss after tax and exceptional costs were accounted for.
The retailer also revealed that chief executive Bob Stott would step down once a suitable replacement had been identified. Stott said this was likely to be next year rather than during the remaining months of 2005. He confirmed that headhunters Hanson Green had been taken on to conduct the search.
One large investor welcomed the news on Stott’s succession but was angered by chairman Sir Ken Morrison’s decision to remain as chairman of the nominations committee. He said: “The task of this committee is to put in place succession plans for senior executives. It should be run by non-executive directors to avoid being captured by those very executives.”
Meanwhile, Morrisons is looking to make four senior financial appointments. Pennycook said he was creating the roles as the job of sorting out Morrisons’ finances was too big a task for one person and he needed a strong team.
>>p14 Morrisons finalises structure
NFU president Tim Bennett reassured Tony Blair on Thursday that UK farmers understood the precautions necessary to minimise the impact of an outbreak of avian flu. He said producers would protect the 50,000 workers in the sector. But he warned that it was important guidance also reached people who kept chickens domestically.
>>p54 Farmers ready for bird flu
Speculation is mounting that Tesco is eyeing up-for-sale Italian supermarket group Esselunga. Esselunga operates 127 stores in Italy and is set to sell for 12bn. US retail giant Wal-Mart and Belgian retailer Delhaize Group have also been linked as interested parties.
Drinks group Diageo has pulled out of a £320m deal to buy Montana wine from Pernod Ricard because it does not fit investment criteria. Pernod Ricard gave Diageo the option to purchase it earlier this year following Pernod’s acquisition of Allied Domecq.
The Office of Fair Trading has referred Robert Wiseman Dairies’ £900,000 acquisition of Scottish Milk Dairies to the Competition Commission.
The winners of the True Taste Wales Food & Drink Awards 2005-2006 are set to be unveiled at the Wales Millennium Centre on November 24. Sponsors include Spar UK, The Farmers’ Union of Wales and The Grocer. Tickets cost £35 each.
Waitrose, Marks & Spencer Food, and the Co-operative Group were the top three supermarkets rewarded for leading the way on good animal welfare practice at the inaugural RSPCA Alternative Awards ceremony at London’s Natural History museum.
avian flu pledge
eye on esselunga