UK supermarket Wm Morrison today (Thursday) issued a profit warning having uncovered problems with the Safeway chain it took over last year.
The company is making a £40m (US$77m) provision following a review of “Safeway supplier balances,” it said.
Morrison’s results for the year ended 30 January 2005 are due to be announced on 23 March. “The results will show an operating profit in the range of £380m to £390m after depreciation of £265m but before approximately £100m of exceptional costs, relating to costs associated with store conversion and redundancy payments,” the company said. With interest payable at around £60m it said profit before tax, exceptional items and property disposal profits was expected to be in the range of £320m to £330m. “This outcome is below that indicated in our Christmas trading update issued on 11 January 2005,” Morrison’s said. .
“This shortfall arises from our review, as part of the annual audit process, of Safeway supplier balances and follows issues encountered with the Safeway accounting systems during 2004,” it said.