Morrisons hails 21% profits surge for 2009

Last updated at 9:26 AM on 11th March 2010

Morrisons today hailed ‘another good year’ as profits climbed 21 per cent and sales hit record levels.The UK’s fourth biggest supermarket chain reported pre-tax profits of £767million for the 12 months to January 31, from £636million in the previous year.Morrisons, which said it expects economic conditions to remain challenging this year, saw like-for-like sales growth slow across the period to 6 per cent, compared with 8 per cent the year before.The Bradford-based grocer saw turnover rise 6 per cent to £15.4billion.

 Marc Bolland, the former CEO, has left to join M&S
It is engaged in a growth strategy put in place by former boss Marc Bolland, who has left to join Marks & Spencer.
Morrisons opened 43 new outlets in the year, taking its total to
425, and it plans to keep expanding its store base to reach more
customers.
Last year presented a challenge for UK supermarkets as the recession squeezed consumers’ wallets.

Morrisons said it put in place 30,000 price cuts during the year and
‘delivered a promotional programme that enabled our customers to save
money whilst eating good fresh food’.
Sales of its own label value range rose 34 per cent in the year, while sales of premium organic and fairtrade products declined.
Christmas trading saw a surge for the firm as it outperformed the
market for the fourth year in a row during the festive season, putting
larger rivals in the shade.
Morrisons chairman Sir Ian Gibson welcomed the firm’s new chief
executive Dalton Philips, who takes up his post later this month.
Mr Philips is a relative unknown in UK retail but has plenty of
grocery experience as a former executive of US giant Wal-Mart and chief
operating officer of Canadian food group Loblaw.
Sir Ian said the supermarket would continue with its long-term
strategy of investing in growth, with new selling space and
manufacturing capability in the year ahead.
‘We expect the economic environment to remain challenging,
disposable incomes to be under pressure and value to remain a high
priority for consumers,’ he said.
‘The board believes that Morrisons’ unique offer of high quality,
fresh food at great value prices will continue to attract customers
from our competitors and drive market share growth in the year ahead.’
The firm said that based on research from Kantar it believes it has
grown its share of the market to 12.6 per cent from 12.3 per cent.
Nick Bubb, of Arden Partners, said the results comfortably beat analyst expectations and were ‘pretty impressive’.
Growth exceeded rival Sainsbury’s as like-for-like growth was driven through promotions without sacrificing margins.
Meanwhile, food price inflation also buoyed the industry for much of the year.
Mr Bubb said the new chief executive is inheriting a business in good
shape, with growth potential in online and overseas markets.
‘It’s an ideal place to be coming in at because you have fantastic momentum and lots more to do in the long term,’ he said.

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Bank voted unanimously to halt money scheme

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The Bank of England’s rate-setting Monetary Policy Committee voted unanimously
earlier this month against expanding the Bank’s quantitative easing (QE)
programme, it was revealed this morning.

Minutes published by the Bank revealed that all nine members of the the
committee felt that leaving the size of the asset purchase programme
unchanged — at £200 billion — “were more persuasive”.

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Which shares for dividends?

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Published: 7:36AM GMT 08 Feb 2010

Dividend payouts have had something of a lean patch of late. The financial
crisis and the subsequent bank bail-out left many banks unable to pay their
yearly payout, an income stream many investors had come to rely on. But it
is not just banks that have been forced to scrap or cut dividends. The
woeful economic conditions forced companies from a range of sectors to
preserve what, if anything, was left on their balance sheets - dividends
were the first to fall for many.

Yet dividends are often the most important consideration for investors. Many
pensioners rely on dividends to supplement their income, while they also
boost total returns when they are reinvested.

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Bank of America sees $194m loss

Wall Street giant Bank of America has reported a net loss of $194m (£120m) in the last three months of 2009.That compared with a loss of $1.8bn in the same period a year earlier. It added that it had repaid the $45bn government bail-out money it had received, but taking the impact of this into account, it made a loss of $5.2bn. Earlier this week, fellow US bank JP Morgan Chase reported a profit of $3.3bn, while Citigroup said it made a $7.6bn loss in the final quarter. For the whole of 2009, Bank of America made a net profit of $6.3bn, an increase on the $4bn profit it made in 2008. ‘Disappointing’ loss”While it’s disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting,” said chief executive Brian Moynihan. “First, we repaid the American taxpayer, with interest, for the Tarp [Troubled Asset Relief Program] investment. “Second, we have taken steps to strengthen our balance sheet through successful securities offerings. And third, all of our non-credit businesses recorded positive contributions to our results.” Bank of America received the Tarp money after agreeing to buy Merrill Lynch in September 2008 in a deal worth $50bn. The chief executive at the time, Ken Lewis, was widely criticised for going ahead with the purchase of Merrill, and he left the bank at the end of 2009. His successor, Mr Moynihan, was upbeat looking at the year ahead. “As we look at 2010, we are encouraged by signs the economy is improving, as we have seen in the stabilisation of our credit costs, particularly in the consumer businesses,” he said. “That said, economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth.”

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Chancellor Alistair Darling is ‘confident’ Britain has pulled out of worst recession in a century

By
Tim Shipman
Last updated at 6:12 PM on 15th January 2010

Upbeat: Chancellor Alistair Darling said there were ‘encouraging signs’ in retail sales
The worst recession in nearly a century is over, the Chancellor claimed today.Alistair Darling said he is ‘confident’ that official figures to be released later this month will show that the economy returned to growth in the last quarter of 2009.But the Chancellor also warned that ‘the recovery will be very moderate’ in 2010.The final figures will not be published until January 26, but National Institute of Economic and Social Research has already predicted 0.3 per cent growth between September and December.That will be a relief to Mr Darling, who has long staked his reputation on the economy pulling out of the 18-month slump at the turn of the year.But it still means that Britain is the last major economy to come out of recession – a fact the Tories will exploit to dent any rise in Gordon Brown’s popularity as economic conditions improve.In an interview with the Scottish Daily Record, Mr Darling said: ‘I’m always cautious about these things. But in December there were encouraging signs for the retail sales figures and car registrations are up.‘Everybody should be very cautious. You’ve had one of the biggest shocks to the system for a long, long time. It’s not something that you can just pick yourself up from and walk away as if nothing has happened. But I am confident.’

Turning the fragility of the economy into a stick with which to beat the Tories, Mr Darling warned that the Conservative plans to cut the deficit quicker could wreck the recovery.‘The recovery this year will be very moderate,’ he said. ‘It will need a lot of support. ‘When people go into a polling booth, they will be electing a government that will set the course for this country, not just for the next five but the next 10 or 15 years.‘That’s a huge decision to take. People will think long and hard before handing the Tories an opportunity they took in the 1980s and which set us back 20 years.’Shadow Chief Secretary to the Treasury Philip Hammond hit back: ‘If the Chancellor’s comments – coming before the official GDP figures are published – are right, then the end of the recession is very good news. ‘But it will bring little comfort to the millions who have already lost their jobs.‘Because Gordon Brown failed to prepare for the downturn, we were the first major economy to enter recession and will be the last out.‘Labour simply doesn’t have the credible economic plans to reduce the deficit, keep mortgage rates low and protect people’s jobs. ‘We need to get Britain back on her feet in a sustainable way. We can’t go on like this.’ 

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Guardian ready to throw cash at Emap

THE Guardian Media Group and private-equity investor Apax have pledged to pump
more money into Emap, their jointly-owned business publisher, whose assets
include the Nursing Times and the Cannes Lions International Advertising
festival.

The pair are gearing up to support an acquisition drive with fresh funds after
rejecting proposals to relax covenants on Emap’s £700m of debt because it
would be too expensive.

Emap, which was acquired for £1 billion in 2007, warned in its last set of
accounts of “significant doubt” that it could carry on as a going concern if
economic conditions deteriorate or renegotiations with lenders failed.

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Credit card rates set to rise

Published: 7:00AM GMT 09 Nov 2009

Lenders‘ current business models are ”unsustainable” due to increasing bad
debts, funding constraints and the toughest economic conditions for a
generation, PricewaterhouseCoopers said.

It said large scale change within the sector was inevitable during the coming
few years, with credit cards likely to be transformed from borrowing tools
into payment ones.

It added that the interest rates cards charged were likely to be increased,
while annual fees charged for just having a card were likely to become a
common feature.

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GM chief says he can run carmaker as global group

General Motors (GM), the US carmaker, is confident that it can raise sufficient finance to restructure its European Opel unit, which owns the two Vauxhall plants in the UK.
Fritz Henderson, the chief executive, said yesterday that the company would unveil restructuring plans for Opel soon.
“We feel confident that the plan will be financeable,” he said.
The US Government initially placed restrictions on GM’s ability to shift funds to its overseas units in return for $50 billion of bailout money.

But the financing provided by the US Treasury to launch the new GM in July, as the company came out of bankruptcy, has different restrictions and would allow GM to send funding directly to Opel if needed, Mr Henderson said.
The company could provide liquidity to Opel by reducing royalties payable by the European unit to headquarters.
Because of improved economic conditions, GM is also generating revenue on its own, as is Opel.
Mr Henderson said: “We need to be careful about it but we can run a global business.”
The company said this week that it would need an estimated $3 billion (£1.8 billion) to complete the restructuring of Opel, which is likely to involve the loss of 10,000 jobs across Europe.
It hopes to raise much of this from European governments. Lord Mandelson, the Business Secretary, has given assurances that Britain would be prepared to back GM to preserve jobs at Vauxhall.
In addition to the $3 billion, the company faces repaying a €1.1 billion (£985 million) bridging loan made available to it this year by the German Government.
Opel has repaid €900 million and Mr Henderson said that it had the liquidity to pay back the rest.
He declined to say how many jobs would have to be cut at Opel or which plants would be closed.
GM’s decision to keep Opel rather than selling a majority stake to a group that includes Magna International, of Canada, and Sberbank, of Russia, has touched off controversy in Europe, straining diplomatic relations.
President Obama assured Angela Merkel, the German Chancellor, in a telephone call on Wednesday night that he was not involved in the decision by GM’s board.
Meanwhile, tens of thousands of angry Opel workers poured on to the streets of Germany yesterday to vent their anger against GM’s U-turn on its sale of the carmaker.
Even greater ire was felt in government offices in Berlin, where politicians, bitter at what they perceive as a transatlantic stab in the back, are awaiting the aftershocks of the failed sale, which was to underwrite jobs for German workers.
The mood at the company head office at Rüsselheim and in other cities where Opel has plants, including Bochum, Eisenach and Kaiserslautern, was grim.
Workers fear GM will now dismiss many more of them than might have gone in the Magna deal.
But the atmosphere was perhaps sourest of all in Berlin before a weekend of celebrations aimed at commemorating the 20th anniversary of the toppling of the Berlin Wall.
One ministerial aide said: “No one in government wants to be pictured swigging champagne as the fireworks go off, for fear of what the next news about Opel will be.”
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Michael Page faces surprise £40m tax bill

Michael Page International, the FTSE 250 recruitment consultancy, is facing an
unexpected £40 million tax bill, it emerged today, as it unveiled a sharp
drop in quarterly profits.

The group, Britain’s second-biggest recruiter, was warned by the Inland
Revenue last month that it was “considering taking steps” to
recover £37.4 million which it had handed over as a part settlement of an
alleged overpaid VAT bill.

Details of the case emerged as the group unveiled a third-quarter trading
update which showed a 41.8 per cent drop in profits to £82.2 million for the
three months to the end of September with income falling in every region.

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Commerzbank vows to fight bankers’ claims for £30m in unpaid bonuses

By Peter Taylor

Published: 9:17PM BST 08 Sep 2009

The 72 past and present staff at Dresdner Kleinwort, which was taken over by
Commerzbank at the start of the year, claim they received only a fraction of
their bonus entitlements for 2008.

Commerzbank cut the bonuses which had been promised to bankers last December
by 90pc, citing a “material adverse change” in economic conditions
late last year.

Eight of the bankers, who are suing for the unpaid portion of their bonuses
along with daily interest payments and were all based at Dresdner’s London
base in Gresham Street, have filed claims for more than £1m.

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