Morrison (wm) Supermarkets Share Discussion Threads

[essentialinvestor] 12/3/2021 11:22

scotches, it does Not add up. It's the logic of Alice in Wonderland,
in other words la la land. Ken Morrison was more than aware of this.

Margins in mass market food retail are not high enough to make money
from online ordering/home delivery.

In store sales are subsidising online.
As more sales migrate online that is a large longer term problem. Unless you are Amazon,
who's gigantic scale allows the business to be highly profitable on paper thin margins.

[philanderer] 12/3/2021 11:07

BERENBERG CUTS MORRISON SUPERMARKETS PRICE TARGET TO 202 (207) PENCE - 'BUY'

[sparty1] 12/3/2021 10:35

lots of overthinking.. MRW 's shareprice will do better than any others in the sector in the next 12 months.
A careful read of the results will reveal why.
I`m not a longtermer. Bought circa 170 ..looking for a quick 10% but I reckon the insti`s will get behind it. More potential here than anywhere else barring takeover rumours. Like the perpetual "arab" takeover theory at Sainsbury.

[scotches] 12/3/2021 09:23

Daily Mail put a figure on online profits.

"The Bradford-based supermarket saw online sales triple, and even though it incurred costs of £66million from expanding its online operations, it made a profit of £10million from its digital channel."



Despite the claims of online profit how does the arithmetic stack up. MRW will allow a minimum order size of £40. You can get a 6 month midweek delivery pass for £20. If gross grocery margin is between 3-4% then you are only making about £1.60 on these small orders plus a contribution from the delivery pass - before all the costs kick in. (...and worse if delivering to an NHS worker).

[loganair] 12/3/2021 08:57

Morrisons model showing resilience, says Third Bridge:

The farm-to-fork business model operated by Morrisons – which is listed under the name WM Morrison Supermarkets (MRW) – has helped stave off supply chain issues, while it is benefiting from a preference for UK-grown produce, says Third Bridge.

The supermarket delivered a strong set of preliminary full year results, with group like-for-like sales up 8.6% and fourth quarter sales up 9%. However, profit before tax and exceptional items was down 51% year-on-year to £201m as the company incurred £290m in Covid-19 related costs.

Analyst Ross Hindle said the ‘farm-to-fork business has helped [Morrison] avoid the supply constraints other retailers have had to grapple with’.

‘Its integrated operation model should help the group navigate the complexities of Brexit, which has placed stress on supply chains across the UK market,’ he said.

‘Morrison is benefiting from a growing customer preference for British-made produce… Morrison is taking local supermarket produce to the next level – and customers are buying into this.’

Hindle is expecting the supermarket to develop its wholesale business and grow ‘margin accretive non-food homeware and clothing’, which will offer margin protection.

[muffinhead] 11/3/2021 23:50

Why the continued 10% off for NHS staff, all whom are well paid with pensions and can't be fired.? Why not those who have lost their jobs or been furloughed on 80% wages?


62% drop in profits, the cost of virtue signalling
Go woke, go broke.

[essentialinvestor] 11/3/2021 23:45

I will resist the temptation to compare the BOD to pigs at a trough.


Very well paid for the size of the business though.

[muffinhead] 11/3/2021 22:58

CFO sounded nervous on the results webcast today

Two takeaways for me:

For forward guidance on profit excluding exceptionals, he declined to give guidance to analysts on exceptionals for 2021/22

He also replied online was profitable but could not give a figure because presented results looks at the big picture of the whole business. So apparently a customer ordering something online does not subtract from sales instore.

Pigs flying over Morrisons HQ

[muffinhead] 11/3/2021 22:54

The 4p special dividend decision was unaffordable

I think it was just willy waving and would not have been paid out but for Tescos special dividend

Lots of mentions todays webcast that Morrisons has a strong balance sheet. The reality is that it has weakened compared to the prior year.... more debt and negative free cash flow

Maybe I am asking too much

[muffinhead] 11/3/2021 22:34

Pets at Home share has doubled in last 12 months
No shortage of responsible owners

Someone should tells Potts that animal rescue centres have to put down most of the animals fed by his generousity after a fixed duration. If he wants to do it properly he needs to build more pet rescue centres and train staff for the centres. On second thoughts don't tell him that....

Can't believe Potts is turning into another Dalton

[justiceforthemany] 11/3/2021 21:43

Totally agree with you on this EI.
Ridiculous from Potts and he needs his head examined. Is he going to wear the shameful FTSE 100 demotion as a badge of honour also? That is solely his doing of course.

[essentialinvestor] 11/3/2021 20:11

Unilever is accused of virtue signalling, however they do that in the
context of delivering record profits and dividends.

Potts takes that to a completely different level.

Then it's easy to be generous when you are paid as well as the MRW CEO and CFO.

Have their FY 2020 bonuses halved ?.


At least animal charities have benefited, agree with that one.

[philanderer] 11/3/2021 19:21

Morrisons donates 500,000 meals to pet rescue centres as demand for pet food soars

[kingalf] 11/3/2021 17:38

Totally agree with all the posts, a solid company, reasonable debt, looking out for the community, pays a half decent dividend and actually makes a profit. You would feel that this should be booming and in a parallel universe it probably is, but in this one I get the feeling that the leeches are about short this.

[justiceforthemany] 11/3/2021 14:56

Still holding here but is this guy Potts running a charity or PLC? He needs the sack IMO. Shareholders and creating shareholder value should be his priority.

[philanderer] 11/3/2021 14:40

Freetrade’s senior analyst, Dan Lane, said investors had got ahead of themselves when they anticipated supermarkets would profit from last year’s panic-buying.

“The cost of servicing the loo-roll hoarders has been eye-watering,” he said. “Covid-related impairments have really weighed Morrisons down but that’s hopefully a one-off. Looking ahead, there’s a lot for investors to mull over, not least the closer tie-ups with Amazon.”

Guardian

[wiganer] 11/3/2021 11:21

AJ Bell commentary

Morrisons

“It’s become very clear that supermarkets haven’t been able to translate a surge in business into higher profits during the pandemic.

“That’s not a criticism of how they operate, but merely a reflection of the pressures they’ve been under to keep the nation fed.

“They’ve had to take on significant extra costs related to Covid, all while remaining calm as shoppers expect everything they want to be on the shelves or online grocery slots to be regularly available.

“MorrisonsR17; results are indicative of this situation. Big sales growth, higher costs, lower profits, and a cash outflow rather than inflow due to paying suppliers promptly, lower fuel sales and having to carry higher stock levels.

“If ever there was a time to judge a company on actions taken to be a responsible business, rather than simply doing anything to drive profit, it is now.

“Strategically there are some big achievements, including the fact that its partnership with Amazon is certainly going places.

“Morrisons has scored another point by being a supplier to the retail giant’s new physical grocery store in London.

“This achievement will no doubt fuel speculation that Amazon may one day decide to acquire Morrisons, although Tesco would equally be an obvious bid target if the US giant wanted to quickly gain scale in the country.

“If anything, it feels as if the pandemic has made Morrisons sharpen its focus, with a keen eye on making sure customers are satisfied and the business is run more efficiently. Those actions will pay off in the long run.”

[philanderer] 11/3/2021 11:05

Happy to hold after those results.


COVID-19: Morrisons extends 10% discount for NHS staff amid pay row for nurses

The retailer expresses its "continuing gratitude" towards NHS workers as the first anniversary of pandemic restrictions looms.

[scotches] 11/3/2021 10:44

Can somebody nominate David Potts for the birthday honours before he costs shareholders any more cash...




“I wear the halving of profits as a badge of honour,” Potts said.

“The British people have had access to food because supermarket workers – and not just those at Morrisons – were required to become key workers.

“We were asking everyday ordinary people to go to work every day against a virus nobody understood. Frankly we could have made no profit and it would have been a result.”

[m12rtn] 11/3/2021 10:32

If you can afford to stay in this for 12months then the divi will be 5% ish.The company is near the bottom of its lower point and nowhere near the highest point over the last 3 years.COVID costs like all companies will be over stated to have wriggle room for this years results ( don't tell me auditors would have spotted it!)So assuming you are not trading and can afford to leave your money here? It will be a very neutral (ish) risk on your capital.BUT I HAVE BEEN WRONG BEFORE!

[scotches] 11/3/2021 10:06

"Subject to shareholder approval at our 2021 AGM, the final ordinary dividend of 5.11p per share will be payable on 28 June 2021 to shareholders on the share register at the close of business on 21 May 2021." (Ex-Div May 20)."
That costs about 123m which is a large chunk of the 165m profit before tax.

If covid is soon to be over then the massive extra costs should not recur - is it over? "We expect 2021/22 profit before tax and exceptionals including rates paid to be higher than the GBP431m profit achieved for 2020/21 excluding the GBP230m waived rates relief.This target assumes a gradual return to more normal trading conditions, no significant increases in expected direct COVID-19 costs such as elevated colleague absence, and no further restrictions such as another period of prolonged café closures."

[unastubbs] 11/3/2021 09:16

sparty - doing "ok" in an environment where every other shop in town is closed is probably not going to cut it. that hardly matters. will they do ok in the future, in a normal retail environment?

[sparty1] 11/3/2021 09:11

Not bad at all! Anyone looking for long term investment could do a lot worse.

With the set up costs for mcCalls and amazon ,covid costs, (they really went to town!) the 6% bonus for frontliner staff, The 10% discount for NHS staff, the waived relief (£230Million FFS!)
Look beyond that and they are really doing ok and next year looks like being an excellent one with much reduced debt.
The wholesale business will rapidly improve. All good for an investor looking for a decent divi AND capital growth.
Not sure I'm that sort of investor but I`m up a bit so have a choice.

[johnwise] 11/3/2021 08:56

Hardly surprising, The virus enforcer on the entrance of the stores is way over the top .A real customer turn off

[ygor705] 11/3/2021 08:09

I'm not finding it easy to evaluate the latest numbers which were perhaps not expected to be anything special. On the face of it, the results don't look good but the message coming from the Board is that there will be a full recovery this year and a good dividend is being paid. Probably not the time to be taking any extreme decisions.