Morrisons accused of stealth warning

Mr Monteyne said a closer look at the Bradford-based group’s annual results revealed that profit margin targets have been cut.

He said in a note: “I know we criticised Morrisons’ management for not being more up-front about cost of further repositioning and not resetting margin consensus. Seems like we got it all wrong ... working through all the guidance we got, we spotted a stealth profit warning.

“When a company guides on net debt, capex, disposals, working capital and interest ... the operating profit can be backsolved. Company implicitly guided margins down to 1.2 per cent to 2.8 per cent for the year just started, well below consensus 2.9 per cent.

“We may be 50 per cent below consensus 2015 EPS, but our margin is sweetly in the middle of that implied margin guidance.

“Are we a bear or simply agreeing with management? In the meantime, Morrisons’ problems aren’t going away. It’s still an underperform.”

Morrisons declined to comment.

Earlier this month the grocer reported a £792m loss, after market conditions led to £1.3m in property write-downs and a 52 per cent drop in underlying profit.