Morrisons has successfully reduced its debt by a significant £2.4 billion after a comprehensive restructuring effort since its acquisition by Clayton, Dubilier & Rice.
- The supermarket’s debt has decreased by nearly 40%, with total liabilities falling from £6.2 billion to £3.8 billion.
- This financial restructuring involved extending its loan facilities to 2030 and lowering both the cost of the debt and the overall level of debt.
- The company’s credit rating received a boost from Moody’s, upgrading from B2 to B1, improving the outlook from ‘negative’ to ‘stable’.
- Morrisons is focusing on operational improvements, investing in its workforce and services to strengthen its market position.
Morrisons, under the ownership of Clayton, Dubilier & Rice, has implemented a strategic debt-reduction programme, successfully diminishing its total debt by £2.4 billion. The restructuring has seen a 40% decrease in debt, dropping from £6.2 billion to £3.8 billion. The effort included extending the Term Loan Facilities from 2027 to 2030, thereby not only reducing the cost of debt but also its overall level.
The initiative also saw the extension of the company’s Revolving Credit Facility to 2030. This restructuring has been pivotal in improving the supermarket’s financial standing, reflected in the recent upgrade of its credit rating. Moody’s has enhanced the rating of Morrisons’ parent company, Market Holdco 3 Limited, from B2 to B1, while also revising its outlook from ‘negative’ to ‘stable’. This development highlights the grocer’s achievement in reducing its debt burdens and extending debt maturities.
According to Morrisons’ Chief Financial Officer Jo Goff, the company’s progress in deleveraging is noteworthy, with debt levels now significantly less than those recorded in October 2021. Goff stated, ‘I’m very pleased with the rapid progress of our deleveraging programme and our debt levels are now around 40% lower than in October 2021.’ She further emphasized the importance of investing in colleagues, pricing, logistics, and manufacturing to bolster Morrisons’ operational strength and market presence.
The supermarket’s latest financial data revealed a 2% increase in sales during its third quarter, running from 29 April to 28 July. This growth to nearly £4 billion underscores the progress Morrisons has made as it continues to focus on three strategic areas: commercial excellence, operations optimisation, and new value creation. By prioritising these pillars, the company is striving to build a more robust and competitive position in the retail market.
Morrisons’ strategic debt reduction and investment in operations signify a strong move towards solidifying its market stance and financial health.
