Morrisons Profits Dip as Company Warns of Supply Chain Crisis | Morrisons

Morrisons reported declining profits as it warned of rising costs in its supply chain due to the disruption of the coronavirus pandemic and a shortage of heavy truck drivers, as the UK chain gears up for auction to decide between two private equity bidders

The supermarket’s pre-tax profit fell by more than a third to £ 105million in the six months to August 1 compared to the same period in 2020, he said on Thursday in a statement to the stock Exchange.

Profits were held back by £ 41million in direct costs of Covid-19 plus £ 80million less from coffee, fuel and take out, he said. Group revenues grew 3.7% to £ 9bn in the half-year

Morrisons is the subject of two separate offers from private US investors who believe the UK’s fourth largest supermarket could be more valuable as a private company.

The grocer said on Wednesday he was in talks with the two suitors – Clayton, Dubilier & Rice and Fortress – as well as the UK Takeover Panel, which regulates acquisition activity, to initiate an auction process to determine who will take over the chain.

Morrisons board last month recommended shareholders back a CD&R bid that would value the supermarket chain at £ 7bn (or £ 9.7bn, including debt).

However, it is believed that rival private equity firm Fortress, owned by Japanese investment bank SoftBank and which has seen its £ 6.5bn and £ 6.7bn offerings supplanted by CD&R, could still present. an improved offer.

Commenting on Morrisons’ first half performance, Chairman Andrew Higginson said: Our supplier partners, and the impact on our supply chain of truck driver shortages.

“As we approach our busiest time of the year, I have no doubts that the team will continue to meet any challenges and keep up the good work to improve the shopping journey for customers. “