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Morrisons expected to post strong figures but Rock results come first
SUPERMARKET chain Morrisons will be in the spotlight during another busy week for corporate results.
Nationalised Northern Rock is set to report another year of losses on Wednesday, but there have been encouraging signs of recovery at the North-East lender.
The Rock, which completed its restructuring into "good" and "bad" banks at the turn of the year, said it had seen "significant improvement" in trading during the second half of 2009.
Growth in mortgage arrears has slowed, helped by record low interest rates and improved debt management.
Financial conditions have stabilised enough for the Treasury to be able to remove the 100 per cent guarantee on savings deposits at the end of May.
The Rock has been in public ownership since February 2008 after being bailed out by the taxpayer in the early stages of the credit crunch.
Results from the bank will inevitably spark a fresh round of speculation over who will buy the "good" bank – with 19bn in retail savings and a 10bn mortgages book – when it returns to the private sector.
National Australia Bank was said to be sounding out advisers over a possible bid earlier this year, while Virgin Money – which almost succeeded in buying the business before it was nationalised – is also a likely contender.
Its more toxic loans have been retained in the existing bank, renamed Northern Rock Asset Management, which will remain in public ownership.
The Asset Management arm, which has about 50bn in mortgages and a 4.5bn portfolio of unsecured loan accounts, will not be taking on new business.
The UK's fourth biggest supermarket chain, Morrisons, should take the loss of chief executive Marc Bolland in its stride on Thursday with annual results expected to show strong sales and profits growth.
Consensus forecasts for the Bradford-based grocer put underlying pre-tax profits for the year to February at 759m, well ahead of last year's 636m.
Morrisons outperformed the wider market for the fourth year in a row during the festive season, after revealing sales for the Christmas trading period up 6.5 per cent on a year earlier, putting its larger rivals in the shade.
This should settle the nerves of investors facing life after Mr Bolland, who has left to join Marks & Spencer on a 15m package after masterminding the revival of the supermarket, which has 422 stores.
His successor Dalton Philips joins later this month. He is a relative unknown in the UK retail world but boasts an impressive CV as a former executive of US giant Wal-Mart and chief operating officer of Canadian food group Loblaw.
Mr Philips is though to be likely to map out a new direction for the supermarket company later in the year.
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Saturday 11 February 2012
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