Morrisons unveils boardroom shake-up

SUPERMARKETS boss Sir Ken Morrison has bowed to shareholder pressure with a major boardroom shake-up at the chain he has run for almost 50 years. He has announced finance director Martin Ackroyd is to step down at William Morrison in May.

The company, the UK's fourth largest supermarket group, has been attempting to shore up investor confidence following a rare profits warning last week.

Announcing full-year results, Morrison said it made £321.1m operating profit, in line with the revised £320m to £330m it projected last week - the figure was £40m lower than was estimated in January.

Last week's profits warning - the second in the group's history and nine months after the first alert - followed a review of money owed to it by suppliers to Safeway, the chain it acquired for more than £3bn in early 2004.

The integration process has proved challenging for the smaller Morrisons business as it tackles supply issues and a store conversion programme. It now has more than 400 outlets and 150,000 staff.

The company said Ackroyd had stepped down but would stay on until May. It has also moved joint-managing director Bob Stott to chief executive while Marie Melnyk will continue as joint-managing director with responsibility for trading and marketing. Senior non-executive director David Jones will become deputy chairman.

Sales figures appeared to suggest the company's strategy of converting Safeway stores was paying off. Like-for-like sales for the core Morrisons outlets were up 7.1% for the year to the end of January, 4.6% excluding fuel. Converted Safeway stores saw a 10.9% rise in sales while unconverted shops saw a 6.8% fall.

The figures show a further slowdown in sales at Morrisons outlets in recent weeks - excluding petrol underlying sales are down 1.2%. Unconverted Safeway stores have shown some improvement, but are still down by 0.5% in the six weeks to 13 March. The converted stores are ahead by 11.3%.

Chairman Sir Ken Morrison said: 'The task of converting Safeway has been challenging but I believe we have made good progress towards our objective of becoming one of the four major national food retailers and are on track to complete the programme well ahead of the original plan.'

He said that based on the 'encouraging results' from converted stores, he was confident of achieving a 'significant improvement in performance in 2006-2007'.