Morrisons back in the black after £1bn improvement

MORRISONS’ turnaround plan has demonstrated significant progress with a £1bn improvement in its profitability.

It has announced pre-tax profits of £217m for the year to January, compared with a £792m loss a year earlier.

The dire performance in its 2015 financial year ended the tenure of former chief executive Dalton Philips, who was defenestrated by incoming chairman Andy Higginson at the start of 2015.

Mr Philips was replaced by David Potts, who began in post last March and embarked on a major overhaul of the supermarket’s operations.

Over the year, 720 jobs were cut at the company’s Bradford head office, which it said was the create a “leaner, more focussed management team,” enabling them to “speed up the decision-making process.”

The business also cut 900 jobs with the closure of 11 supermarkets in September and it sold sold 140 convenience stores to entrepreneur Mike Greene for around £25m. These decisions, and the sustained competition from Aldi and Lidl, resulted in turnover falling 4.1% to £16.1bn.

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Morrisons also briefly lost its FTSE100 status, but will officially return to the index later this month.

Mr Potts said: “By improving the shopping trip for customers, we have started the journey to turnaround the business and make our supermarkets strong. Our listening programme is informing and shaping the six priorities that are now driving the improvements that customers are noticing.

“Our strong balance sheet and cash flow provide the platform for turnaround and growth, but what makes us truly unique as food maker and shopkeeper is the personality and dedication of our thousands of colleagues. I am confident these strengths will help us fix, rebuild and grow Morrisons.”

Andrew Higginson, chairman, said: “I am delighted that the reshaping of the Board and Executive Committee is now complete. The Morrisons team now comprises a wealth of internal and external talent with the experience to deliver the turnaround.

“The team made good progress during the year, with lower debt once again a highlight. We are on track to deliver improved future profits and returns for shareholders.”