Analysts Clive Black and Darren Shirley noted: “Andrew Higginson, chairman, has completed the time-consuming rebuild of the non-executive team of the Yorkshire-based supermarket group, William Morrison Supermarkets through the appointment of Mr Rooney Anand as the group's senior independent director from January 1 2016.”
The Greene King boss, having served on the management teams of Sara Lee and United Biscuits, will bring considerable experience of British consumer markets, said Black and Shirley.
‘Its own manufacturing activities’
Anand’s experience of the fast moving consumer goods segments – in which Morrisons is one of “the UK’s leading participants through its own manufacturing activities” – will prove particularly useful, said Shore Capital. Morrisons is the UK’s second largest manufacturer of fresh food.
The Greene King ceo joined “an impressive list of colleagues guiding Morrisons’ executives and looking after shareholders’ interests at the company”, said Black and Shirley.
Joining the retailer’s board at a time of considerable change for the business and challenge for the British grocery industry, Anand’s appointment completed Morrisons’ senior management team – bar the appointment of a senior marketing executive, according to Shore Capital.
‘More needs to be achieved’
While considerable progress had been made under Morrisons’ ceo David Potts, “more needs to be achieved to [make Morrisons] truly fit for purpose”. Top challenges included: responding to tough competition, particularly from the limited assortment discounters, deflation, changing consumer behaviour – resulting in lower waste, lower calorific intakes and more food consumed outside the home – and channel shift within grocery.
While the Morrisons’ trading performance needed to improve “on a sustained basis”, the retailer’s low leasehold participation, falling debt and small pension surplus would enable strong free cash generation and rewards for shareholders, predicted Shore Capital.
“We see the further development of the group board through the appointment of Mr Anand as another welcome step forward in the re-building of this once, but still aspiring to be, great business,” concluded Black and Shirley.
Shore Capital acts as a broker to Morrisons and has a policy of withholding recommendations on house stocks.
Morrisons’ recent board appointments
- Rooney Anand, currently ceo Greene King
- Neil Davidson, currently a non-executive director of Produce Investments
- Irwin Lee, until recently, vice president and md, Procter & Gamble northern Europe with responsibility for the UK, Ireland, Denmark, Finland, Norway and Sweden
- Belinda Richards, serves on the Advisory Group of Audit Committee Chairmen at the Financial Reporting Council and is a member of the Governing Council of the Centre for the Study of Financial Innovation, a not for profit think-tank focused on research in financial services
- Paula Vennells, currently chief executive of the Post Office