Sir Ken unhappy over Morrisons share price

Sir Ken Morrison
Sir Ken Morrison
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SIR Ken Morrison has raised the pressure on the board of Morrisons by voicing his unhappiness over the group’s share price.

The Bradford-based retailer has seen its shares fall 19 per cent over the past six months and is expected to report its lowest annual profit in five years on Thursday.

Morrisons is a late entrant to online shopping and local convenience stores – the two fastest-growing retail market segments – and has faced intense competition from the rise of discounters Aldi and Lidl.

Asked what he would do to get the business back on track, Sir Ken told The Yorkshire Post: “I have no views on it because I have no influence on it. There is really no point on my commenting.”

Asked if he was happy with the way the company was going, he said: “I would be happier with a higher share price of course, but I don’t think there’s much I’d want to say.”

A media report last month claimed that Morrisons’ founding family, which owns about 9.5 per cent of the group, had contacted buyout firms to gauge their interest in taking the business private. However, Sir Ken, the son of the founder, was reported to have said he knew nothing about a potential buyout.

Analysts are forecasting a pre-tax profit of between £734m and £805m for the year to February 2. An outcome in line with the consensus forecast of £783m would represent a 13 per cent decline on the £901m it made in 2012/13.

That would serve to heighten investor expectations of some tangible reward from the review of the company’s £9bn property portfolio announced in September.

Morrisons has emphasised that the bulk of its core estate – more than 90 per cent of which is freehold – would remain under freehold ownership.

But it has also indicated that the review and reduced capital expenditure as it cuts superstore expansion could lead to the release of surplus capital to shareholders through a special dividend or share buyback.

Analysts are expecting the group to announce property sales worth between £500m and £1bn with Thursday’s annual results.

Morrisons is also expected to announce aggressive new price cuts in a bid to win back customers from discounters Aldi and Lidl.

The group slashed the price of milk to the equivalent of 24p a pint on Friday, claiming the price drop makes it the cheapest supermarket milk in the UK.

Morrisons was by far the worst performer among Britain’s so-called Big Four over Christmas, and monthly industry data has shown that it has continued to struggle.

To address its structural shortcomings Morrisons agreed in May to invest more than £200m in a 25-year deal with online grocer Ocado, which enabled it to start home deliveries in January.

It is also conducting an aggressive expansion of its chain of M Local convenience stores, with a target of 200 by the end of the year, while investing heavily in technology and systems and upgrading its 500-plus supermarkets.

Shares closed at 237p on Friday, giving Morrisons a market capitalisation of £5.55bn.