Morrison (wm) Supermarkets Share Discussion Threads

[loganair] 14/10/2020 11:29

The billionaire brothers who bought Asda for £7billion are facing questions over their decision to transfer ownership of the British supermarket to the tax haven of Jersey.

Under the deal struck by Mohsin and Zuber Issa, who were made CBEs in the Queen's Birthday Honours list, the grocer will be legally controlled by a parent company based in Jersey.

Experts said there were several benefits to operating from the Crown dependency, which charges a corporate tax rate of zero.

It would also mean the parent company does not have to disclose its accounts publicly, and the Issas would pay no capital gains tax if they decided to sell Asda at any time.

[cwa1] 13/10/2020 08:27

Interesting(IMO!) little snippet on supermarket growth over here:-



UK grocery sales growth accelerates as Eat Out scheme ends

Over the 12 week period to Oct. 3, Morrisons was the best performer of Britain's so called "big four" grocers, with sales up 8.7%. Market leader Tesco saw growth of 6.5%, ahead of Sainsbury's on 5.1% and Asda on 3.4%.

Satisfactory

[philanderer] 09/10/2020 00:18

Morrisons announces changes to every store in country from this weekend as second lockdown fears grow

[ygor705] 07/10/2020 09:17

The market appears to like the Tesco numbers published today. Would expect some of the joy to feed through to the rest of the sector and help stop the rot here.

[essentialinvestor] 06/10/2020 18:01

Not too far away from the March plunge low now.

[dondee] 06/10/2020 16:17

The big food supermarket share prices are now well below where they should be and probably will be by the year end.

[scotches] 05/10/2020 09:59

"This would leave Morrison with just the 30 Daily's they have with McColl's and the 19 in the Channel Islands with Sandpiper."

Assuming Rontec haven't yet been bought out by EG that forecourt firm has over 50 M Daily stores and a ten year agreement according to this 2019 report and the Rontec accounts.



MPK has announced intention to convert to M Daily

Harvest also have at least one Daily



Edit: September report lists convenience partners.

"Local convenience shopping is proving more popular with customers during COVID-19.
Sales to our convenience store operator partners – including McColl’s, Rontec, MPK,
Harvest Energy, and Sandpiper CI in the Channel Islands – were strong throughout the
first half. Together with 55 of our own Morrisons Daily forecourt shops, we now supply over 1,300 convenience stores, all of which are serving customers in their local catchments.
Overall for wholesale supply, we are almost at our target of £1bn of annualised sales."

[essentialinvestor] 04/10/2020 14:59

Large institutional holders here should be pushing for a strategic review
of the business to realise value, which needs to include putting the company
up for sale.

[loganair] 04/10/2020 14:55

Aldi - In a statement, the company said its annual sales increased by 8.3% to £12.3bn at year end of its most recent reporting period.

[loganair] 04/10/2020 12:16

I can see EG group replacing all the Morrison Daily's on their forecourts with Asda convenience stores. This would leave Morrison with just the 30 Daily's they have with McColl's and the 19 in the Channel Islands with Sandpiper.

[loganair] 04/10/2020 12:02

How the brothers buying Asda for £6.8bn ring up a minuscule tax bill as their company has links to tax havens.

Moshin and Zuber Issa's EG Group has huge debts and a paper trail to tax havens.

The brothers' stake in EG Group is held in the tax-friendly jurisdiction of Jersey.

The brothers and TDR will borrow against the value of their stake in the Asda business to pay for the deal.

EG Group's huge £7.7billion debt pile also meant that interest payments and finance costs last year completely wiped out its £373million operating profit. New rules capping the level of tax relief written off against interest rates mean companies such as EG Group are obliged to pay some corporation tax, despite losses.

By contrast, Asda paid £94.5million tax.

City sources said they believed the Issa brothers and TDR would borrow against the value of their stake in the Asda business to pay for the deal.

Until now, the Issa brothers' meteoric rise has gone almost unnoticed outside the world of high finance. But in the past five years the Issas have quietly overseen tenfold growth at their EG Group business, which is headquartered in Blackburn but now spans the UK, Europe and America, with €20billion (£18.1billion) annual turnover last year.

That growth has been fuelled by a flurry of audacious acquisitions in an era of ultra-low interest rates using cheap debt from global financial markets.

New York-based credit ratings agency Standard & Poor's earlier this year described its debt pile as 'substantial'

It is understood the Issas and TDR plan to introduce more Asda convenience outlets to forecourts as a path to growth for the supermarket chain, which one source last night said has become 'unloved' by Walmart.

Tax experts said there is growing concern about companies whose financial arrangements dilute or wipe out profits and corporation tax.

It is understood that Barclays is lead lender on a debt package of as much as £4billion to fund the Asda acquisition.

[scotches] 03/10/2020 11:54

"Walmart sells majority stake in Asda"

FT article on Asda purchase and some interesting below the line comments.

"EG made a loss of some £500m last year .. trying to pay off some of the £8b of debt on its books. And most of that debt is junk rated. This Asda deal is the same... Financed by junk rated bonds.. as no genuine lender would touch this with even a disinfected bargepole. To bring it home.. EG has £9 of debt for every £1 of cashflow.. the norm is £5 to £6.. so they have to continuously run to just stand still. Its a house of flimsy cards. Sainsbury's should have been given the goahead as it's way more financially secure than EG will ever be.By the way ft had a great article some months ago doing some pretty good in depth analysis on EGs financing.. it was pretty damning."

A link is provided to a 2019 article on the brother's business empire.

"Hot debt markets fuel growth of Blackburn's petrol pump empire"



"But the Issa brothers are not reshaping just the property market in their home town: their company EG Group has also quietly grown into a behemoth in Europe’s leveraged loan and junk bond markets.

The operator of petrol pumps and convenience stores is now the fourth biggest borrower in Europe’s €100bn market of collateralised loan obligations — investment vehicles that package riskier corporate debt into safer securities — according to data from rating agency Moody’s.

The brothers’ business, built up from a company called Euro Garages, is not a household name, and is not a widely known stalwart of wider European markets, in contrast to the CLO market’s two largest exposures, telecom giants Altice and Liberty Global. But as demand for these complex securities from investors, including yield-starved Japanese banks, has charged leveraged loan issuance, booming debt markets have in turn fuelled the rapid growth of the brothers’ business."

[loganair] 02/10/2020 12:22

The deal with TDR Capital and the Issa brothers would put raw entrepreneurship and ambition in the driving seat at Asda.

The new owners said they plan to invest more than £1 billion into the business over the next three years, and said they will ensure Asda remains a price leader in the supermarket fuel sector.

[nick rubens] 02/10/2020 11:45

cheers scotches on the LIDL and ALDI accounts filings, good find!! Hadn't thought of the Uk stores having to file accounts in the uk.

[philanderer] 02/10/2020 11:22

Telegraph Business @telebusiness

LIVE: Asda sold to Issa brothers and TDR Capital for £6.8bn

[essentialinvestor] 30/9/2020 00:38

Perhaps Potts will prioritised profitability this time?
because MRW will get SFA thanks from the stock market for anything else-
as is abundantly clesr from the share price.

[heo] 29/9/2020 15:25

They are subsidised by EU for market development. How about that?

[albert3591] 29/9/2020 13:47

You won’t they are privately owned

[nick rubens] 29/9/2020 13:45

We hear alot about Aldi sales growing, but do they make continually growing profits? I've never heard any profit figures in the news headlines.

We all know too well how the big four are struggling for profitable growth and are seemingly shrinking away profitability wise.

All these new store openings I think are likely to be debt funded.

[johnwise] 29/9/2020 07:34

Aldi UK Says No Current Need For Product Rationing

British supermarket Aldi has seen increased demand for key items since the government imposed more curbs to stem the spread of COVID-19 but does not currently see the need for limits on shopper purchases, its boss said on Monday.

Last week rivals Morrisons and market leader Tesco both imposed restrictions.

[loganair] 28/9/2020 14:28

Acquiring Asda would represent a major coup for the brothers, who have built EG from a single petrol station in Bury in 2001 to over 5,900 sites in the UK, Europe and the US.

TDR Capital, best known for the acquisition of we-buy-any-car owner BCA Marketplace in November last year, bought into EG in 2016 when it merged its European Forecourt Retail Group with the Issa’s Euro Garages.

Walmart is said to be keen to retain a minority stake in Asda once a deal completes and according to the reports is looking for an option that can grow the business again and fend off competition for the likes of no-frills group Aldi and Lidl and online competitors such as Ocado.

[philanderer] 28/9/2020 14:23

albert, thanks for the reply.


'Billionaire brothers in pole position to buy Asda in £6.5bn swoop'

The Issa brothers and TDR Capital have been chosen as the preferred bidder for Asda, Sky News can reveal.