Morrisons losses mushroom after property write-off, plans 23 store closures

12th Mar 2015 06:58

Like-for-like sales improved in the fourth quarter at Morrisons but the grocer reported a £792m loss before tax for 2014 as it wrote down the value of its stores by £1.3bn and announced 23 closures.The supermarket group said it was hiking the total dividend by 5% to 13.65p after a final dividend of 9.62p, but said the payment for the new financial year was likely to be more than halved, to "not less than 5p per share". A dividend cut had been feared by analysts.Underlying profits, excluding property disposals, impairments and onerous lease provisions, were down 52% to £345m, in line with reduced market expectations but the worst in eight years, on turnover down 4.9% to £16.8bn.Morrison's made profits of £131m from property disposal proceeds of £448m, as guided. It cut net debt by £477m to £2.34bn.Like-for-like (LFL) sales excluding-fuel and VAT were down 5.9% over the year, after the decline was slightly arrested in the fourth quarter by a round of heavy price cuts which resulted in a lesser 2.6% LFL fall, including a contribution of 1.0% from online.Painting a grim picture ahead of the arrival of new chief executive David Potts next Monday, chairman Andrew Higginson said: "Last year's trading environment was tough, and we don't expect any change this year."Despite opening 57 M Local stores, management plan to close 23 other convenience stores during the current financial year, with the loss of 300 jobs and slow the roll-out of the convenience store format "significantly".In line with Tesco, Morrisons is reducing the number of products it sells, to 21,950, from 24,500, and the number of items on promotion.Management was pleased with the first year of online sales, thanks to a partnership with Ocado put in place by axed CEO Dalton Philips, where the group exited 2014/15 with around £200m of annualised sales and near-50% coverage of all UK households.The plan this year for online is to open "at least one" more area and focus on increasing delivery density within the existingcoverage area. "We will also trial other methods of customer delivery."? (2013/14: £2,817m