Morrison bows out on record £612m

Published on Thursday 13 March 2008 20:13

Sir Ken Morrison steps down as chairman with a dividend payment of £19.2m

SIR Ken Morrison bowed out of Morrisons on a high note yesterday, taking a 19.2 million dividend payment with him into retirement.

Unveiling its final set of results before Morrison retired as chairman, Britain's fourth biggest supermarket group reported a record profit of 612m. That was up a thumping 66 per cent on the 369m made in 2006, with turnover jumping 6 per cent to 13 billion.

Scotland and the south of England, the two areas Bradford-based Morrison moved into with its acquisition of Safeway in 2004, performed best in the second trading half.

Although the group does not break down regional like-for-like sales, which were up 4.6 per cent nationally, it said the number of customers visiting the Scottish shops jumped 9.7 per cent, while "footfall" in southern England lifted 7.7 per cent.

Morrison has benefited from a strong advertising campaign featuring Scottish celebrities Alan Hansen and Lulu.

The final dividend is lifted 20 per cent to 4.8p, meaning that Sir Ken's family, which holds 15 per cent of the stock, is due for a bumper divi. Morrison also said it was to return 1bn to shareholders via a share buyback over the next two years. Share buybacks increasing the earnings and dividends accruing due to fewer shares being left in circulation.

Sir Ken, 76, said yesterday that it gave him "particular pleasure to be reporting record earnings". Richard Pennycook, Morrison's finance director, said the retiring chairman "leaves a very significant legacy". Pennycook said customers "like the things that are different about us – we are not just a retailer that sells food; we make it and care for it".

Sir Ken, who is now life president of the firm, said: "I have been with the business now for some 55 years and must say that the experience has been both demanding and fulfilling but, nonetheless, it has always been enjoyable."

He said he intended to "develop new interests in a number of fields" following his retirement.

Sir Ken's successor as chairman, Sir Ian Gibson, paid tribute to a man he said was an "inspirational and dedicated" leader. Gibson said Sir Ken had taken Morrisons "from modest beginnings to a national household name". But despite the strong results, Morrison's shares closed down 5.5p at 289.75p on a tougher outlook for the food retailing sector in 2008.

Exane BNP Paribas analyst Tim Attenborough said it was "an excellent set of results" but with the buyback widely expected by investors, the focus was stronger on the "definitely tougher environment going into 2008". Marc Bolland, group chief executive, said that although Morrison had made a promising start to the financial year, it would be "particularly challenging".

END OF A FAMILY ERA

HIS father founded the business as three egg-and-butter market stalls in Bradford.

Yesterday Sir Ken Morrison stepped down as easily the longest-serving boss of a major listed company.

Morrison joined the business when his father fell ill, but he has transformed the group into Britain's fourth-biggest supermarket chain.

The pivotal deal for the retiring chairman was the 3.35 billion acquisition of Safeway in 2004.

However, the integration of Safeway over two years was widely regarded as botched, followed as it was by a string of profits warnings and a 374m loss. It led to more open corporate governance at the previously autocratic company, with Marc Bolland joining as chief executive in 2006.