Morrisons’ boss ‘has moved mountains’ in a year

By Michael Stones contact

- Last updated on GMT

Morrisons’ boss David Potts had ‘moved ’ during his year at the helm
Morrisons’ boss David Potts had ‘moved ’ during his year at the helm
Morrisons’ boss David Potts “has moved mountains” in the year he has served as ceo of the Bradford based retailer, says City analyst Shore Capital.

Analysts Clive Black and Darren Shirley praised Potts’s wholesale changes to the group executive team, the new culture he has injected into the business, leading to the construction of a platform to build a £16bn revenue retail business.

Started in the right direction

“The journey has begun: David Potts has moved mountains in just one year to us,”​ they said. And that journey, backed by the new board, executive and non-executive directors, had started in the right direction.

Despite disappointing shareholders in recent years, Morrisons was likely to become “progressively shareholder friendly”, ​said Black and Shirley. The retailer’s management firmly understands that disappointment and the need for “sustainable improvement”.

The retailer – which was also the UK’s second largest producer of fresh food – had “strong foundations”, ​owning more than 80% of its store base and having a strong position from a pension responsibility perspective.

In addition to growing its core retail business, Morrisons was also evolving its finance strategy, further details of which will be presented by chief financial officer Trevor Strain in the retailer’s preliminary results next month.

‘Regain substantial investor interest’

‘Mountain mover’

“The journey has begun: David Potts has moved mountains in just one year to us.”​ 

  • Clive Black and Darren Shirley, Shore Capital

“We believe that operational improvement alongside several levers in the finance strategy create a growing capability for the group to regain substantial investor interest, with any improvements in operating cash flows likely to support ongoing shareholder friendly initiatives,” ​said Black and Shirley.

The analysts agreed with Potts’s assessment that the journey would be long and possibly frustrated by, as they termed it, “bumps in the road”.

However, with reduced borrowing continuing apace, Morrisons’ solvency ratios were already ahead of its peers. “Further deleverage creates a basis to explore distributions well ahead of its peers,”​ concluded Black and Shirley.               

Shore Capital advises the retailer and withholds a recommendation on ‘house stock’.

Morrisons’ next financial update will be delivered on March 10.

Meanwhile, the current ceo’s predecessor, Dalton Philips, resigned on Tuesday January 13 2015​ as the beleaguered retailer’s sales continued to slide.

Potts was appointed to the helm – on a salary of £850,000 a year, plus incentives​ – in February last year.

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