25th May 2006 07:02
Morrison(Wm.)Supermarkets PLC25 May 2006 AGM Statement In conjunction with the annual general meeting the Directors release salesfigures for the 16 weeks ended 21 May 2006 and provide further information onthe Board and progress in the business. Sales Like for like sales in the 16 weeks ended 21 May increased by 6% (3.7%excluding fuel), continuing the trend reported with our Preliminary Results on23 March. Sales generated through new stores opened in 2005/06 contributed anadditional 1.8% (1.8% excluding fuel), taking the sales uplift to 7.8% (5.5%excluding fuel) after adjusting for the effect of store disposals. At this early stage of the year, the Board remains comfortable with the profitguidance given in March. Board changes As you know the Company has been conducting a search for a new Chief Executive.This is now approaching the final stage, and I expect to make a firmannouncement within the next two to three weeks. I have been Chairman of the company since it floated in 1967 but have todayinformed the Board of my current intention to retire as Chairman and a Directorof Morrisons by the end of the next financial year in January 2008. The Boardhas invited me to become Life President following my retirement. The past year Whilst 2005/06 produced disappointing financial results, we now have a solidbase for the future. The store estate has been taken to the size and shape whichwas envisaged and only a handful of disposals remain to be made. The investmentsin additional central packhouses and meat processing facilities have been fullyjustified as they are currently working to capacity. Work has continued ondistribution and a new composite Regional Distribution Centre has been opened atKettering which, together with a new frozen food store at Corby, will ensuregood service to our retail outlets. These developments have enabled us tofurther rationalise our distribution network and start the disposal of surplusproperty. It is intended to acquire or build a Southern Regional DistributionCentre to enable our stores in the south east and south west to enjoy the levelof service which is provided in the rest of the U.K. Administration We are currently beginning to occupy our newly finished head office andanticipate completion of the process by early June. I am confident that theeconomies and extra efficiencies of having all our central staff in one locationwill be swiftly realised. New store development Partly as a consequence of planning delays, our new store programme for thecurrent financial year will see just four store openings. The first of thesestores at Leyland is due to be handed over next week, with the store openingscheduled for 26 June, and this will be followed by Swadlincote in Derbyshire,in October, Cardiff in November, and the re-built Crowborough store in Sussexjust before the end of the current financial year in January. We remain committed to an active new store expansion programme, and in the nextfinancial year I am looking forward to opening stores where sites are acquiredand planning consent is granted at Speke in Liverpool; Wednesbury, WestMidlands; Whitefield near Bury; Hartcliffe, Bristol and York. Additionally, wehave a number of other sites where contracts have been exchanged, for which weare awaiting the grant of planning consent, and these too will be capable ofbeing opened during 2007. I fully expect that we shall open eight new storesnext year and thereafter we shall be looking to accelerate the programme -although the planning regime, which seems tipped to be a large part of theupcoming Competition Commission investigation into our industry, continues topose difficulties. Further improvements to the estate The completion of the conversion programme in 220 Safeway stores at the end oflast year was a major achievement, but we are now into a second phase of thatexercise, looking at ways which we can improve productivity and reduce costs bygreater efficiency. In many instances this will result in the construction ofimproved warehousing facilities at stores, better back-up storage facilities forchilled and frozen product, and store extensions to incorporate the full MarketStreet concept. At the present time we have projects on site, under construction or about tostart for completion later this year at Diss in Norfolk; Inverness; Glenrothes;Castle Bromwich; Chesterfield; Penrith; Peterborough; Bideford and Horndean. Anew petrol filling station is under construction at the existing Wellingboroughstore and this will come on stream in August. Our business In the two years since our acquisition of Safeway we have had to sacrifice ourindustry leading, best in class status in terms of the retail execution of ourstrong and unique offer; our concentration during this time being applied to theintegration and conversion process. Now back on the day job, every category and product has and is being overhauledand polished to ensure that our customers' needs are fully met, that ourhardworking space works even harder and that our retail presentation reflectschanging demands and optimises the offer. Our market share has stabilised and welook forward to a period of resumed growth. By the late autumn, 157 stores will benefit from new health and beautydepartments and 50 larger stores will benefit from an improved non food offer.By the end of the current financial year we envisage operating up to 100Morrisons brand pharmacies, 102 Morrisons dry cleaning units, 315 customer cafesand 277 petrol filling stations. These additional services, along with ourunique emphasis on fresh foods via our compelling Market Street offer, ensurethat we have a strong and differentiated brand which is well placed to make itsmark in a highly competitive market place. Our own brand products continue to be benchmarked and improved on an on-goingbasis, with many new products being launched or enhanced in the last 12 months.Our premium range, 'The Best', is growing in size, popularity and contributionto our sales. Customers continue to benefit from 1,000 weekly offers, including 150 buy one,get one frees and on-going low prices. Healthy eating We recognise our role in the frequently confusing debate on healthy eating andbelieve it is important to play our part. After much careful consideration anddeliberation, we are moving forward with front of pack "Guideline Daily Amount"signposting, which provides clear information to help people make informedchoices about the foods they are eating. This will be introduced in the courseof scheduled packaging redesigns, starting in June with Morrisons brand 'FreeFrom' products and new 'The Best' and 'Eat Smart' lines. Our 'Eat Smart' range of calorie, fat, sugar and salt controlled foods,specifically designed to help maintain a controlled diet without compromising ontaste, is being refreshed and continues to develop. Suppliers and British agriculture We have always recognised the need for loyal customers and understood theimportance of good suppliers with whom we share a long term relationship. Duringthe difficult 18 months of the Safeway conversion our suppliers have excelledthemselves in the support and encouragement they have shown to us. As always wehave maintained our close links with British agriculture. Competition Commission Strong and fair competition is good for the consumer and our industry isextremely competitive. Whilst we share some of the OFT's concerns about thecompetitive landscape, we have made it clear that we do not hold a land bank,nor do we flex prices through our store network. Whilst we might have preferredthe OFT to take a different, more targeted route to addressing the issues,naturally we will fully cooperate with the investigation. Sunday Trading Our clear view is that the six hours trading allowed on a Sunday for largerstores should not be changed. However, should longer hours become permissible asa result of the review, we would naturally need to consider our position. Charity of the Year In spite of the hectic pace of life, our staff found time for fundraising forour charity of the year, Breast Cancer Campaign. All previous records were broken with over £1.4 million being donated; a truly remarkableachievement recognised by Breast Cancer Campaign to be their most successfulCharity of the Year partnership ever. Tribute to Bob Stott As Bob will be departing in the near future this is my final opportunity tothank him on behalf of the shareholders. His work for the company has beengreatly appreciated. Bob and I have enjoyed a long association and seen much ofthe growth which the company has achieved from modest beginnings. I give him mybest wishes for a long, happy and healthy retirement and, may I add, an activeone. I will now close by expressing my personal thanks to other fellow directors andeveryone throughout the company for their energy and enthusiasm and particularlyfor their loyalty. Thank you for attending the A.G.M. ENDS Enquiries Wm Morrison SupermarketsBob Stott 020 7638 9571Richard Pennycook Investor RelationsNiall Addison 07764 624 701 Media RelationsWm Morrison Supermarkets Gillian Hall 01274 356804 Citigate Dewe Rogerson Jonathan Clare 020 7638 9571 Simon Rigby Sarah Gestetner This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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