Shore Capital applauds as Morrison's CEO "imposes his authority"

14th Apr 2015 09:14

Broker Shore Capital has applauded the rapid swishing blade of Morrison's new chief executive David Potts, who on Monday night removed the seventh of the 10 board members in place when he started in March.Analyst Clive Black welcomed the cultural change Potts is driving, including, crucially, better in-store music."He is materially imposing his authority on a company where trading performance simply has not been good enough for some time," Black declared.This comes after Morrison's announcement that trading director Casper Meijer was stepping down.Black acknowledged that Meijer has played an important part in contributing to what is a more appropriate trading strategy at the grocer since last year. However, as his main family home remains in The Netherlands and he refused to move full time to the UK, he clearly fell victim to Potts' belief, as reflected in the company's statement, this is a key role that needs to be undertaken by someone dedicated to "living and working here in Britain".After this seventh boardroom move, the analyst noted that the company has a strong core trio of Potts, chairman Andrew Higginson and finance director Trevor Strain - both ex-Tesco - and a focus to deliver the necessary improvement in the sales and ultimately profit performance."With an appropriate sense of priority, Potts is dealing with matters in the right order to our minds, with stores only moderately impacted by initial decisions, albeit ones that we sense are welcome to his team; such as a spring clean, the removal of a flawed queue management system, more local flexibility but also accountability and responsibility and better music."ShoreCap reiterated its 'buy' stance on Morrison's shares on the belief that the group "can deliver strong free cash generation to shareholder benefit in due course, predicated upon an ongoing improvement in trading, a material cut in capital expenditure and moderate responsibilities to landlords and the pension fund."Speedy cultural change represents a good start for the new CEO."