Moody’s has upgraded its rating of Morrisons from stable to positive in wake of its “sustained period of improving operational performance”.
The ratings agency has improved its assessment of Morrisons to Baa2 from Baa3 as well as its rating of the senior unsecured ratings of Morrisons and its subsidiary Safeway by the same margin.
A statement read: “concurrently, Moody’s has upgraded Morrisons short term ratings to Prime-2/(P)Prime-2”.
“Our decision to upgrade the ratings of Morrisons reflects a sustained period of improving operational performance by the company and a stronger credit profile” says David Beadle, a Moody’s vice president - senior credit officer and lead analyst for Morrisons.
“Morrisons cash generation and reduced debt, coupled with increasing profitability has resulted in credit metrics which support a Baa2 rating”, he added.
Morrisons post-Christmas trading update published last week saw a continuation of the positive trends in both like-for-like sales and transaction volumes.
The Bradford-base supermarket giant’s credit profile has also benefited from the company’s working capital and property disposal programmes which have helped the significant reduction in debt.
Moody’s also had praise for Morrisons price investment and online sale progress, and added that its liquidity profile remains strong backed up by healthy cash balances.