Morrisons hit by £1bn loss as debts take toll

MORRISONS has clocked up a fresh £1bn loss as it continues to struggle under private equity ownership.

The supermarket chain, which was bought by Clayton Dubilier & Rice for £7bn in October 2021 after an intense bidding war, has found life as a private company hard.

Latest results for the 52 weeks to the end of October 2023 reveal the company posted a £1.1bn loss on revenue of £18bn, according to filings at Companies House for the chain’s parent company Market Topco.

That compares with a loss of £1.5bn in the 65 weeks to the end of October 2022. Much of the loss was a result of having to service the group’s massive debt pile.

The company reported finance costs of £735m, with £400m spent servicing its annual interest payments on borrowings of £5.4bn.

Stripping out exceptional items operating profit was £70m, versus a loss of £63m in the previous period, while underlying profits rose to £970m from £911m. A Morrisons spokesman said: ‘The underlying performance of the business is strong.’

Since being taken private Morrisons has lost its place as the UK’s fourth biggest grocer to the German discounter Aldi.

The chain has had to contend with fierce competition and rising costs as well as high interest rates.

But the chain has been trying to turn around its fortunes under chief executive Rami Baitieh, who took over last year.

Earlier this year, Baitieh vowed to win back shoppers and set out a bold vision to transform the Bradford-based retailer.

He told this newspaper: ‘I must be very direct. Since the pandemic, Morrisons has not been on peak form.

‘Our market share has slipped slowly but consistently and our like for like sales have been below the pack for a while.

‘I am sure they will come back but there is work to do’.

In January, Morrisons agreed a £2.5bn deal to sell its petrol forecourt business to sister company Motor Fuel Group.

The ‘ vast majority’ of the proceeds – almost £2bn – will be used to reduce debt, Morrisons said in January.