Profit at Morrisons bid down 37% on COVID-19 hits

London — UK supermarket group Morrisons is at the center of a bid battle between two US private equity firms, with first-half profits down 37.1% on Thursday and COVID-19 costs and cafe, fuel and food profits. Reported to have been hit by the loss of. Takeaway area.

Below the annual sales of market leaders Tesco, Sainsbury’s and Asda, the group maintained year-round guidance, but sustained commodity price increases and cargo inflation, and a shortage of current HGV drivers.

Morrisons, based in Northern England, is likely to be Bradford’s last publicly traded company, with pre-tax profit and £ 105m (100 million) in the six months to August 1. Exceptional items ($ 44.5 million) were reported. From £ 167m around the same time last year.

Morrisons, which trades from 497 stores and has more than 110,000 staff, costs £ 41m directly for COVID-19 and loses £ 80m in cafes, fuel and takeaway areas due to a pandemic. Said he was.

Gross revenue, including fuel, increased 3.7% to £ 9.50 billion, with similar sales excluding fuel and VAT sales tax down 0.3%.

Similar sales were down 3.7% in the second quarter and up 2.7% in the first quarter.

This slowdown reflects the relaxation of pandemic restrictions on hospitality and the shift in demand from diet in the domestic market.

“The entire Morrisons team shows commendable resilience facing a variety of ongoing challenges in the first half of the year, including an ongoing pandemic, disruption to some partner suppliers, and the impact of a shortage of HGV drivers on the supply chain. “It was,” said Andrew. Higginson.

Morrisons maintains guidance from 2021 to 22 and exempts £ 230m from pre-tax profits and exceptions including pre-tax profits and business rates in excess of £ 431m paid between 2020 and 21. Excluded rate reduction.

Starting last month as an egg and butter merchant, Morrisons agreed to a £ 7bn offer from Clayton Duville and Rice (CD & R) with former Tesco boss Terry Leahy as senior adviser. ..

However, a rival consortium led by SoftBank-owned Fortress Investment Group could still win bids on CD & R groups, and the fight is heading towards an auction process overseen by the Takeover Panel, which oversees UK M & A transactions. There seems to be.

The latest offer from CD & R is worth 285p per Morrisons share. This is a 60% premium on Morrisons’ share price before the takeover interest emerged in mid-June. The last offer of the fortress was priced at 272p per share.

Morrisons shares closed at 292.4p on Wednesday. This shows that investors want higher bids.

($ 1 = 0.7267 lbs)

James Davy