Thursday, February 20, 2025

Morrisons Shows Stronger Sales in Q4 and Full Year 23/24

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Morrisons has announced its trading update for the period ending October 29, 2023, which includes improvements in revenue and customer satisfaction along with growth in the convenience division.

Financial Highlights Recently Released

  1. Excluding fuel, total revenue increased by 2.7% resulting in a revenue of £14.9 billion for the year.
  2. Q4 saw a 3.3% rise in sales and an annual increase of 1.8% in sales stated LFL (like-for-like) sales with fuel excluded.
  3. EBITDA for Q4 saw a rise of 8.5% leading to an annual increase of 6.5% which now puts the EBITDA at £970 million.
  4. Revenue for Q4 stated 3.2% increase in sales resulting in a total of £3.6 billion.
  5. For the year, free cash flow was reported at £542 million, with 30 million generated during Q4.

Recent Developments in Strategy and Operations

Improvements in revenue from supermarket and online operations, and convenience stores have led Morrisons to grow LFL for six quarters continually.

  1. The company has now surpassed the 800 Morrisons Daily stores mark, with a sale increase of 20% LFL after changing store banners. In Q4, they switched 190 McColl’s stores to Morrisons Daily, and in Q1 of this year, 131* stores transitioned.
  2. Online sales grew by 1.6%, but the convenience segment that includes McColl’s grew even more by an astounding 9%.
  3. The wholesale distribution sector experienced growth above 10% in annual revenue for the entire year.

New openings in Bath Southgate, Chelmsford, and Newcastle Great Park along with a replacement store in Brentford partly offset the impact of store closures on net new space.

Expansion Opportunities as CEO’s Strategy Focuses on New Markets

Rami Baitiéh, Morrisons’ new CEO in November 2023, underlined the opportunities that arise from Morrisons existing strengths and how they may be further capitalized upon.

As Baitiéh pleasantly noted when giving his statement, “I have been at Morrisons only for a few months, but it’s already evident to me that we have far too many talented colleagues, ample food making shops, high grade food manufacturing facilities, and great value division with our Market Street butchers, fishmongers, bakers, cheesemongers, and deli section counters. We are competitive online, our convenience and wholesale business are rapidly expanding, and I have witnessed the love and affection that customers, supplier partners, and farmers have towards Morrisons.”

He added that as customers have been increasingly satisfied, this would lay the foundation towards the latter phases of the company’s growth.

Financial Moves and Structural Changes

After completing £450 million in newly constructed sale and leaseback agreements, Morrisons was able to ensure that over 80% of the estate is freehold. Additionally, the company enhanced its working capital position with a further £100 million in Q4, total being £300 million, ahead of projections.

CFO Jo Goff has spoken once more about the company’s pledge to remain competitive regarding pricing, customer support, and product quality enhancements. “This has been a year of steady progress as we continued to invest in price, customer service, loyalty, and made further improvement in our own-brand range and in quality,” she said.

Morrisons has exhibited strong financial success and proficiently expanded in convenience and customer satisfaction which serve as catalysts for a favorable forecast. Now, with new management and a desire to grow, the company will work to enhance its position in the grocery industry within the UK.