Morrisons has an exciting future ahead of it thanks to a credible, new management team, according to a leading city commentator.
Analyst Clive Black at Shore Capital said: “Morrisons has demonstrably started to self-improve in-store. We can see this from our own visits to shops and the last two trading updates.
“Whilst so, the company is on what CEO David Potts calls ‘a long journey’, whilst finance director Trevor Strain sensibly called out the fact that there will be bumps in the road to a better place.
“In this respect not all of the group’s stores are in a physical or operational state that management desires all of the time and such a fact needs to be placed into market expectations.”
He said there are factors that lead to future optimism: de-leveraging should ease financing costs in time and Morrisons has set out to eradicate online losses by 2018, which would represent a £30m swing. It has also disposed of or closed loss-making stores.
“There is a credible new management team at the helm of Morrisons, which we believe that the market is starting to recognise and this augurs well for the delivery of operating self-improvement in 2016,” said Mr Black.
His note coincided with the news that non-executive director Rooney Anand, the chief executive of Greene King, has bought 12,500 shares in Morrisons.