Morrisons reports loss of £792m
Supermarket Morrisons has slumped to a loss of £792 million after it wrote down the value of its store estate in the face of tough market conditions.
The struggling chain also highlighted another year of falling sales as underlying profits - excluding the £1.3 billion one-off property hit - fell 52% to £345 million in the year to February 1.
It announced that it will close 23 under-performing M Local stores during the current financial year, having recently disclosed plans to shut 10 smaller supermarket this year.
The results come days before new chief executive David Potts, who has more than 40 years retailing experience at Tesco, takes his post.
Mr Potts replaces former boss Dalton Philips, who was ousted a year after the announcement of a three-year £1 billion programme to cut prices to fight the supermarket price war. Mr Phillips had led the retailer since 2010.
Chairman Andrew Higginson said: "Last year's trading environment was tough and we don't expect any change this year. However, Morrisons is a strong, distinctive business."
Like-for-like sales were down 5.9% across the year but the trend in the final quarter showed signs of improvement with a decline of 2.6%.
Morrisons said consumer confidence has started to recover but with real disposable incomes still short of pre-2008 levels the chain said customers are unlikely to return to old shopping habits in the near term.
It said: "Shopping around for the best value and shopping more frequently are trends that look set to continue."
The property write-down stems from the company's assessment of every store's recoverable amount compared to its book value. Stripping out the one-off item, the profits performance was broadly in line with City expectations.
It increased its total dividend payment by 5% to 13.65p a share but warned that its commitment for this year was to pay "not less than 5p a share".
However retail analysts at Jefferies said: " Morrisons remains our favoured UK grocer given clearly improving trading momentum and pricing position, a more attractive valuation and a superior balance sheet."