13th May 2005 15:07
Morrison(Wm.)Supermarkets PLC13 May 2005 The Board of Morrisons announced, at the time of its preliminary results, thatit expected operating margins to show some improvement in the current year,albeit modest and not apparent until the second half of the year. Whilst the sales performance of the Group in aggregate has made good progresssince the preliminary results announcement, the performance of the Group overallremains heavily impacted by the temporary dual running costs of distribution,administration and IT functions necessary to the conversion process. The Boardnow considers that these duplicate costs will remain higher and take longer toeliminate than the market is currently anticipating. No significant reduction isexpected until the completion of the programme to convert the acquired Safewayunits to the Morrisons format in November 2005. The conversion process isproceeding well and sales from converted stores are very encouraging, providingthe framework for a significant improvement in performance in 2006/7. However,it is clear that these costs will cause operating margins to run significantlyshort of last year's level for much of 2005. The Company will provide a further update at the time of its AGM on 26 May 2005and will also comment on its progress in recruiting both a new finance directorand additional non-executive directors. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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