Morrisons: ‘Strain could use results to trim dividend’

NEW Morrisons finance director Trevor Strain could use Thursday’s half-year results to trim the supermarket chain’s “generous” dividend, analysts have warned.

Britain’s fourth-largest grocer had promised to increase its payout to shareholders by 10 per cent each year in the three years to 2013-14.

But analysts at JP Morgan warned: “The new finance 
director might use his first results public presentation to change the guidance.”

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Chief executive Dalton Philips is expected to use 
the announcement to try to reassure the market that his roll-out of convenience stores and a deal to move into online retailing with Ocado can revive the firm’s fortunes.

Like-for-like sales fell by 1.8 per cent in the three months to 5 May, as discount chains such as Aldi and Lidl squeezed Morrisons.

Santander analyst Tim 
Attenborough said: “It has not been an easy 18 months for Morrisons. The company has suffered from a loss of market share, slipped into negative like-for-like sales, and earnings momentum has been very negative.”

Shore Capital analysts think the like-for-like sales decline may have eased to 
1.3 per cent for the first half of the year, but warned the real decrease could be up to 4 per cent once inflation is stripped out.