Morrison (wm) Supermarkets Share Discussion Threads

[essentialinvestor] 12/3/2019 17:51

Tempted to buy a few before results but held off, will have a look tomorrow.

[connorcampbell] 12/3/2019 13:40

Can Morrisons pick up a trolley full of new investors following Wednesday’s full year results?

January’s post-Christmas update did little for the stock. While for the 9 weeks to 6th January group like-for-like sales rose 3.6%, the Retail contribution was just 0.6%, the rest coming from Amazon-supplying Wholesale division.This as number of transactions actually fell 0.9% due to what Morrisons dubbed a ‘change in consumer behaviour’, i.e. the continued rise of Aldi and Lidl and some Brexit-inspired cautiousness from shoppers.

Investors are going to want to know whether that ‘change in consumer behaviour’ continued throughout the rest of the fourth quarter, and whether it has carried over into Morrisons’ financial 2019/20...

Read what Spreadex analysts have to say, or watch a 60 second earnings preview video, here:

[connorcampbell] 12/3/2019 13:39

Can Morrisons pick up a trolley full of new investors following Wednesday’s full year results?

January’s post-Christmas update did little for the stock. While for the 9 weeks to 6th January group like-for-like sales rose 3.6%, the Retail contribution was just 0.6%, the rest coming from Amazon-supplying Wholesale division.This as number of transactions actually fell 0.9% due to what Morrisons dubbed a ‘change in consumer behaviour’, i.e. the continued rise of Aldi and Lidl and some Brexit-inspired cautiousness from shoppers.

Investors are going to want to know whether that ‘change in consumer behaviour’ continued throughout the rest of the fourth quarter, and whether it has carried over into Morrisons’ financial 2019/20...

Read what Spreadex analysts have to say, or watch a 60 second earnings preview video, here: hxxps://spreadex.com/?tid=388213

[connorcampbell] 12/3/2019 13:39

Can Morrisons pick up a trolley full of new investors following Wednesday’s full year results?

January’s post-Christmas update did little for the stock. While for the 9 weeks to 6th January group like-for-like sales rose 3.6%, the Retail contribution was just 0.6%, the rest coming from Amazon-supplying Wholesale division.This as number of transactions actually fell 0.9% due to what Morrisons dubbed a ‘change in consumer behaviour’, i.e. the continued rise of Aldi and Lidl and some Brexit-inspired cautiousness from shoppers.

Investors are going to want to know whether that ‘change in consumer behaviour’ continued throughout the rest of the fourth quarter, and whether it has carried over into Morrisons’ financial 2019/20...

Read what Spreadex analysts have to say, or watch a 60 second earnings preview video, here: hxxps://spreadex.com/?tid=388213

[loganair] 01/3/2019 09:40

The national convenience retailer McColl's will convert 10 of its stores to the Morrisons Daily fascia. The first of these stores, located in Bolton, will re-open in late April after a 10-day refit.

In line with other stores now being franchised under the Morrisons Daily fascia by the likes of Rontec, these 10 McColl's stores will be supplied with Morrisons private label lines rather than the Safeway products that feature in the McColl's badged stores.

With Morrisons now acting as the wholesale supplier to 1,300 stores in McColl's wider estate, the opportunity for McColl's draw on the Morrisons brand credibility is clearly one way to further enhance its progress towards repositioning its stores with a fully-fledged grocery convenience offer. For Morrisons the opportunity is to further extend its brand in a market sector where currently it has a limited presence.

[loganair] 24/2/2019 20:04

If I was in Sainburys CEO Coupes shoes I would be having a long chat with Morrison seeing if Morrison would like half of Asda stores while Sainburys have the other half with both supermarkets giving Walmart a 30% stake in their own companies in return.

As I posted before this would only increase Sainsburys market share to around 23% while for Morrison to somewhere around 18%.

Over the next 5 years both Sainsbury's and Morrison will each lose around 1% of this market share with Aldi gaining around 2 1/2% giving them a market share of a little over 10%.

If this was to happen, then in 5 years time I could see the market shares being around the follwing:

Tesco - 27%
Sains - 22%
Morri - 17%
Aldi - 10%
Lidl - 06.5%
Coop - 05.5%

[loganair] 24/2/2019 11:14

Asda would be an affordable to a private equity firm, if large, bite for a financial sponsor. In the absence of another bidder, the valuation might fall to, say, 6 billion pounds. Then assume that half the deal could be funded in debt. If Walmart kept a minority stake, the equity the buyout firm would need to put up could be as little as 1.5 billion pounds.

This could prove tempting – if a buyout firm could satisfy itself that getting out of the investment would be as easy as getting in. With antitrust regulators likely to block a sale to another grocer, the exit would have to be through an initial public offering.

To generate an internal rate of return of roughly 15 percent over five years would require the buyout firm to grow the equity value to 6 billion pounds. Assume debt stayed steady as spare cash was reinvested in the business (it needs it). Asda would then have to attain an enterprise value of 9 billion pounds to deliver the desired gains.

Asda's margins are already wide. So the strategy would have to focus on getting sales up. CEO Roger Burnley has delivered the beginnings of a turnaround, growing sales by 2.6 percent in 2017. That would need to be sustained over the lifetime of the investment. The company would need to poach customers from big grocers Sainsbury and Tesco Plc, most likely by undercutting them on price, and from discounters Aldi and Lidl by convincing them to pay a little more for the convenience of a full range.

Sure, it would still be tough to get an Asda deal past any private equity firm’s investment committee. But a buyout wouldn’t be Walmart’s only option. It could combine Asda with another retailer, such as B&M European Value Retail SA – both serve the same price-conscious shoppers.

So at least Walmart has options. That isn’t the case with Sainsbury. CEO Mike Coupe could try to strike a deal with Wm Morrison Supermarkets Plc instead of Asda – but that could face similar regulatory constraints. Or he could stick with a standalone strategy. But that won't generate anything like the value promised by the Asda tie-up. What’s more, the company’s performance has recently deteriorated. A private equity bid for the supermarket might be possible, but it would be less than straightforward.

With the Asda deal falling apart at the checkout, Sainsbury will be left with the advice of one of its own marketing slogans: love your leftovers.



Personal note - If Sainsburys tried to join with Morrison I do not think they would have the same difficulty as with the Asda deal as any tie up with Morrison would give the combined group around 1.5% less market share then Tesco currently have.

It seems to me Morrison really needs to do something as in 5 years Aldi will have a greater market share then Morrison will have.

[loganair] 24/2/2019 10:25

If Walmart really wish to get the best price for Asda I think their best option would be to sell 50% of the Asda stores to Sainsburys giving them 23% market share and the other 50% to Morrison increasing Morrisons market share to around 17% in return for a 25% stake in both Sainburys and Morrisons.

I'm unable to see how the CMA could turn this down and let it go through as is.

[chinese investor] 24/2/2019 08:18

Good news !

[loganair] 23/2/2019 22:49

American private equity giant KKR is plotting a bid for Walmart’s Asda as talks for its merger with British rival Sainsbury falter on competition concerns, The Sunday Times reported.

KKR is thought to be working with former Asda boss Tony De Nunzio, now a senior adviser to the buyout firm, the report said.

The newspaper, which did not cite its sources, said Asda would have a lower valuation than the 7.3 billion pounds in the Sainsbury’s deal because there would not be the same economies of scale.

The report cited a source close to Walmart. A spokesperson for Asda could not immediately be reached for comment.

[essentialinvestor] 21/2/2019 14:17

They would not be allowed TSCO, their firepower plus the market leader, no way.

[albert3591] 20/2/2019 14:09

Essentialinvestor.......why not buyout tesco,go for the biggest.

[essentialinvestor] 20/2/2019 13:31

That would be interesting.

I'm in no doubt that Amazon will make a big move in UK food retail,
it's the form that takes is the unknown.

[loganair] 20/2/2019 12:44

I understand if the merger doesn't go through Walmart's prefered option is to list Asda on the LSE.

[essentialinvestor] 20/2/2019 12:19

Could ASDA be sold to Amazon? - if the case it might be a huge blow to MRW.

[chinese investor] 20/2/2019 08:11

Illogical !

[loganair] 05/2/2019 22:02

Morrisons could benefit from the merger of Sainsbury's and Asda, Citi analysts believe, leading them to upgrade their rating on the Bradford-based supermarket group.

Citi's "base case" forecasts the Sasda merger to drive almost 60% pro-forma earnings per share accretion for Sainsbury's, but synergies are expected to be "tempered" by a predicted remedy process from the competition regulator of the store disposals.

This provides a potential opportunity for both Morrisons and Tesco to acquire stores, Morrisons "benefiting from more opportunity and from a lower base".

A "mid-case" remedy scenario sees Morrisons potentially buy between 48 and 108 remedy stores, with a mid-case of 78 stores representing 20% of existing selling space.

Assuming Morrisons takes on additional costs and achieves up to 1% synergies, this mid-case scenario drives circa 30% pro forma EPS accretion, before any reinvestment into the offer.

"While we view Sainsbury’s shares as offering the best risk/reward from the potential merger, we recognize the benefit which might also accrue to Morrison’s," the analysts said, accordingly upgrading their rating to 'neutral' with a 255p target price.

[noirua] 05/2/2019 10:32

WM Morrison Supermarkets, up 1.5%. Berenberg raised the supermarket chain to Buy from Hold.

[noirua] 01/2/2019 17:25

The Company announces that on 31 January 2019, Andrew Higginson, Non-Executive Chairman, purchased 63,560 ordinary shares of 10 pence each ("Shares") in the Company on the London Stock Exchange at a purchase price per Share of 236p.
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If there are to be takeover rumours of some substance later on, it would be a good idea for directors to add stock now.

[scotches] 28/1/2019 20:45

"Tesco is the biggest supermarket chain in the land and has the greatest buying power. A portion of customers expect its stores – at least the big ones – to offer more than a version of Aldi and Lidl’s no-frills approach. Morrisons, which tries to make a virtue of its meat and fish counters, will be delighted by Tesco’s semi-retreat, one suspects. It’s got another point of differentiation."

edit jan 29: MRW email to customers:

As well as good quality, great value fruit and veg, at Market Street in Morrisons you’ll find delicious fresh food prepared by our in-store specialists. Our skilled Butchers, Bakers, Fishmongers and Counter colleagues work hard to bring you the best cakes, pizzas, pies and so much more.

So next time you stop by, be sure to ask for their expert advice – as well as something delicious for dinner.

[chinese investor] 22/1/2019 09:16

240p Soon !

[noirua] 19/1/2019 15:16

Morrisons look set to bid for close together stores in the ASDA/Sainsburys mega merger. This would work well for Amazon with the extra stores and stores space. A move by Amazon on Morrisons looks to be just a matter of timing. To move just before Morrisons expansion or just after. Time is being squeezed a fair bit here and a move may well be imminent.

[noirua] 18/1/2019 15:37

Is Amazon ($AMZN) In Secret Talks To Buy Morrison (MRW)?

May slip from highs but worth looking at near 230p.