Home Money Morrisons posts £1bn loss as debt payments soar following private equity takeover

Morrisons posts £1bn loss as debt payments soar following private equity takeover

by Elijah
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Debt burden: Morrisons, which was bought by Clayton Dubilier & Rice for £7bn in October 2021 after a fierce bidding war, has found life as a private company difficult.

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Morrisons has posted a fresh £1bn loss as it continues to struggle under private equity ownership.

The supermarket chain, which was bought by Clayton Dubilier & Rice for £7bn in October 2021 after an intense bidding war, has struggled to live as a private company.

The latest results for the 52 weeks to the end of October 2023 reveal the company posted a loss of £1.1bn on revenue of £18bn, according to documents filed with Companies House for the parent company of the chain, Market Topco.

That compares with a loss of £1.5bn in the 65 weeks to the end of October 2022. Much of the loss was the result of having to pay off the group’s huge debt.

The company reported financing costs of £735m, of which £400m was spent paying its annual interest payments on loans of £5.4bn.

Debt burden: Morrisons, which was bought by Clayton Dubilier & Rice for £7bn in October 2021 after a fierce bidding war, has found life as a private company difficult.

Debt burden: Morrisons, which was bought by Clayton Dubilier & Rice for £7bn in October 2021 after a fierce bidding war, has found life as a private company difficult.

Excluding exceptional items, operating profit was £70m, against a loss of £63m in the previous period, while underlying profits rose to £970m from £911m.

A Morrisons spokesperson said: “The underlying performance of the business is strong.”

Since going private, Morrisons has lost its place as the UK’s fourth largest supermarket to German discounter Aldi.

The chain has had to deal with fierce competition and rising costs, as well as high interest rates.

But the network has been trying to turn its fortunes around under CEO Rami Baitieh, who took over last year.

Earlier this year, Baitieh promised to win back shoppers and set out a bold vision to transform the Bradford-based retailer.

He told this newspaper: ‘I have to be very direct. Since the pandemic, Morrisons has not been in top form.

‘Our market share has fallen slowly but consistently and our like-for-like sales have been lagging behind for some time.

“I’m sure they will come back, but there is work to do.”

In January, Morrisons struck a £2.5bn deal to sell its petrol station business to sister company Motor Fuel Group.

The “vast majority” of the proceeds – almost £2bn – will be used to reduce debt, Morrisons said in January.

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