Morrison(Wm.)Supermarkets PLC Morrisons to waive business rates relief in full (3492H)
02 Dicembre 2020 - 7:28PM
UK Regulatory
TIDMMRW
RNS Number : 3492H
Morrison(Wm.)Supermarkets PLC
02 December 2020
News Release
Release date: 2 December 2020
Morrisons to waive 2020/21 business rates relief in full
For some time Morrisons has been considering the implications of
the Government's decision not to collect business rates this year,
and we had planned to make our decision once the full cost and
duration of COVID-19 had become more clear. However, we have now
brought forward this decision and are committing to pay business
rates for the coronavirus period in full. The total amount to be
paid will be GBP274m, of which GBP230m relates to 2020/21.
Due to the impact of the second lockdown and other tier
restrictions, we now expect direct COVID-19 costs to be around
GBP270m, c.GBP40m more than our estimate at our 2020/21 interim
results, and significantly higher than the GBP230m in-year business
rates relief.
In addition to the direct COVID-19 costs, profit has been
significantly impacted throughout the year by the extra costs of
doing business during the pandemic, for example the widespread
temporary closure of many of our cafes and market street counters.
These costs have been exacerbated recently by the impacts of the
second lockdown and tier system. However, we have continued to
manage our business well and achieved strong operating leverage. As
a result, before the GBP230m business rates payment and recognising
the busy Christmas and New Year trading period is still ahead of
us, we are expecting 2020/21 underlying profit before tax and
exceptionals to be in line with our expectations.
Morrisons has a very strong balance sheet and underlying cash
flow, supported by our freehold property portfolio and pension
surplus. Reflecting this strong position and continuing to adhere
to the principles of our capital allocation framework, we propose
to pay a special dividend of 4.00p per share to shareholders. This
relates to the previously deferred payment for H2 2019/20 - the
period before COVID-19. The special dividend will be payable on
25th January 2021, to those shareholders on the share register as
at close of business on 18th December 2020.
Our business has weathered the significant financial challenges
of COVID-19 very well, which is testimony to our financial and
operational strength. Today's announcements will clearly impact our
net debt position. In addition, net debt is currently again being
temporarily adversely affected by: the impact on working capital
due to the lower national fuel demand during the second lockdown;
investment in higher levels of stock availability both during
COVID-19 and in our preparations for Brexit; and the extension of
the scheme to pay our smaller suppliers immediately during the
crisis. While many of these factors are temporary and will reverse
when trading conditions return to normal, we expect 2020/21
year-end net debt to be around GBP1.7bn pre-IFRS 16. As a result,
we are unlikely to generate surplus capital, so have no current
plans to pay a special dividend relating to 2020/21. For the
ordinary dividend, we expect to declare a final 2020/21 dividend
based on underlying profit before the payment of business
rates.
David Potts, Chief Executive, said
"We are grateful for the Government's swift action at the start
of the pandemic which enabled the whole sector to face squarely
into the challenges and disruption caused by COVID-19. Throughout
this difficult period Morrisons has done its best work to look
after our colleagues, our customers and key workers, to feed the
nation, to protect both the vulnerable and our smaller suppliers
and to play a full and leading role in meeting the enormous
challenges that the COVID-19 pandemic brought. I'm exceptionally
proud of the way that the whole business has responded."
- ENDS -
Certain statements in this financial report are forward looking.
Where the financial report includes forward-looking statements,
these are made by the Directors in good faith based on the
information available to them at the time of their approval of this
report. Such statements are based on current expectations and are
subject to a number of risks and uncertainties, including both
economic and business risk factors that could cause actual events
or results to differ materially from any expected future events or
results referred to in these forward-looking statements. Unless
otherwise required by applicable law, regulation or accounting
standards, the Group undertakes no obligation to update any
forward-looking statements whether as a result of new information,
future events or otherwise.
Enquiries:
Andrew Kasoulis - Investor Relations 0778 534 3515
Simon Rigby - Media 0777 178 4446
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END
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