13 March 2024 , 12:34
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Morrisons, the supermarket chain, has reported a loss of over £1 billion last year due to high debt financing costs.
The Bradford-based retailer was bought by US private equity firm Clayton, Dubilier & Rice (CD&R) in 2021 for £7 billion. The company's accounts show a pre-tax loss of £1.09 billion, following a £1.52 billion loss the previous year.
This loss is largely due to £735 million of financing costs related to the company's large debts and increased interest rates. Before the takeover, Morrisons had net debt obligations of around £3.2 billion.
After the takeover, the parent company, called Market Topco, had net debts of £8.5 billion at the end of October last year. However, Morrisons plans to reduce its debt using money from a £2.5 billion deal to sell its 337 petrol stations to Motor Fuel Group (MFG), also owned by CD&R.
In the last financial year, Morrisons reported revenues of £18.35 billion, down from £18.72 billion the previous year. The company also reduced its staff by nearly 9,000 to just under 105,000 employees. Morrisons has faced significant competition from discount rivals, with Aldi overtaking it as the UK's fourth largest supermarket chain in 2022.
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This January, the company's new boss revealed plans to "reinvigorate, refresh and strengthen" Morrisons. Rami Baitieh, who became Morrisons' chief executive in November, acknowledged that the company has "work to do" in enhancing its product selection, pricing, and customer service.