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March 13, 2014

UK: Morrisons books GBP176m annual loss

Morrisons this morning (13 March) reported an annual loss of GBP176m (US$293.6m), rounding off a challenging year for the UK's fourth-largest grocer.

By Dean Best

Morrisons this morning (13 March) reported an annual loss of GBP176m (US$293.6m), rounding off a challenging year for the UK’s fourth-largest grocer.

The retailer reported a 2.8% fall in like-for-like sales, excluding fuel and VAT, for the 12 months to 2 February.

Morrisons has seen its sales hit by a range of factors, including its smaller presence in the UK’s online and convenience channels but also the rise of more price-focused discounters like Aldi and Lidl.

The company booked GBP903m in “non-recurring exceptional costs”, which led to the pre-tax loss.

It incurred a GBP163m charge linked to child products retailer Kiddicare, which the retailer plans to sell. Morrisons also filed charges of GBP319m relating to “elements of our store pipeline” and GBP379m “in respect of trading stores”.

Morrisons said it planned to “exit from non-core activities”, including Kiddicare and its stake in US online grocer FreshDirect. It also plans to spend GBP300m on its “proposition” this year.

The retailer forecast underlying profits for the new financial year 2014/15 would be GBP325-375m – less than half the GBP785 it filed for the past fiscal year, which itself was down 13% on the previous 12 months.

Shares in Morrisons were down 7.77% at 214.9p.

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