The warning, the fifth since the acquisition, was issued as a "clarification" forecasting the company would make a profit anywhere from £50m (€75m) to £150m (€225m) in the financial year to 30 January 2006. Thefigure is before tax, exceptionals and goodwill are calculated. Morrisons reported an annual profit of £380m (€569m) in the financial year ended 30 January 2005.
The company's board of directors said it was working with KPMG to get a better idea of the company's finances. A statement would be issued with an update on sales at the end of July 2005, the companysaid .
"The board reiterates that in 2006/7 there remains every indication that financial performance will improve significantly following completion of the conversion process and as the benefits of the actions taken to normalise the cost structure of the business arereflected in improving margins," a press release stated.
Meanwhile the Observer newspaper reported on the weekend that the company has hired headhunters to look for a replacement forits current chief executive, Bob Stott. The newspaper did not name a source for the information.
A survey report by research group TNS found that Morrison had its market share fall to 11.8 per cent from 14.2 per cent over the year to April 2005 and remains in fourth place among UK's "BigFour" chains. The survey found Tescos' share jumped to 29.8 per cent from 27.6 per cent during the same period. Asda market share fell to 16.5 per cent from 16.7 per cent while Sainsbury's market share rose to 15.8 per cent compared to 15.4 per cent.
Marks & Spencer to launch home delivery service
In a bid to boost its market share in the UK food sector Marks & Spencer plans to launch a grocery home delivery service.
The retailer currently offers a limited food home delivery, mostly for special holiday or gift items. Marks & Spencer noted in its annualreport that it sold about £3,509.7m worth of food items in the previous financial year, a 2.4 per cent increase compared to the previous year. The company said its share of the food market is3.1 per cent.
Food accounts for 45.2 per cent of the company's retail turnover in the UK. The company sell food across its chain of stores, including its 129 Simply Food branded stores. Within its stores, thechain also has 260 bakeries and 189 Café Revive coffee shops.
Overall the company reported on 10 June its profits fell by by 19 per cent to £618.5m (€900.7m) in the financial year ended 2 April. The company said the downturn in profits was due to itsstrategy of lowering retail prices so as to sell excess stock. The retailer said £1.3 billion (€1.89 billion) of stock and purchase commitments had now been cleared.