News
Morrisons raises £331m via property financing agreement
The deal, which remains subject to the satisfaction of certain closing conditions, will net the retailer approximately £331m in funds.
As a result, 76 properties owned by Morrisons and its subsidiaries will be “transferred outside of the group” and then leased back. However, Morrisons will retain ownership of the property’s freehold.
The entities acquiring and leasing back the properties will fund the acquisition using third party financing.
In a statement published on 26 September, Morrisons said that the use of the proceeds of the deal are still under consideration.
No details of the other firm involved have been shared, but a Sky News report from 25 September said the deal was set to be agreed with real estate investor Song Capital over a 45-year period.
Signs of recovery
In its Q2 results, published on 25 June 2024, Morrisons reported 4.1% like-for-like sales growth excluding fuel, signs that its recovering is continuing under CEO Rami Baitiéh.
This is after the supermarket chain suffered pre-tax losses of £1.1bn in the year up to 29 October 2023 and cut nearly 9,000 jobs as a result.
Speaking in June, Baitiéh said: “Over the last eight months we have listened carefully to over 340,000 customers, colleagues and suppliers and the insights from this exercise are helping to refine and shape the activity in all three pillars of our strategy: commercial excellence, operations optimisation and new value creation.
“It’s clear that availability and our loyalty scheme are the two areas our customers talk about the most and so we are focusing intensively on these areas.”
The retailer has also invested in its operations with the opening of a £1.4m manufacturing innovation centre in April and a £12.8m fish freezing centre in August.
It has also agreed to trial raising its freezer temperatures to -15C after research found that the change did not impact product quality.
In other news, the owner of Quorn Foods has suffered a £63m pre-tax loss.
