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Morrisons has signed a £331m deal to release value from its portfolio of stores as the supermarket continues with a turnaround attempt under new CEO Rami Baitieh.
The group confirmed this morning the signing of a ground rent financing transaction, which is expected to complete on 2 October, subject to certain conditions.
Morrisons did not announce who it had struck the deal with, but a media report by Sky News last night listed the buyer as real estate investor Song Capital.
Upon the completion of the transaction, 76 properties will be transferred outside of the group and leased back to the Morrisons.
Morrisons said in a statement that “the entities acquiring (and leasing back) the properties will fund the acquisition of the properties using third party financing”.
The 76 supermarkets will remain under the control of Morrisons.
Morrisons did not confirm if it would use the £331m to further reduce its £4bn debt pile and added the use of the proceeds was “under consideration”.
The supermarket is expected to report its third-quarter results later this morning.
Morning update
Asda has today launched a new sustainability-linked enhancement to its supply chain finance scheme in partnership with HSBC UK, which will see the retailer use financial incentives to encourage better sustainability practices within its supply chain.
Launching in January 2025, the voluntary scheme will offer more than 250 Asda suppliers that currently use the existing scheme access to three tiers of enhanced rates of financing. Access to each tier will be based on suppliers disclosing their ESG performance data, setting targets and taking action on shared sustainability goals.
Poundland owner Pepco is set to report record revenues for 2024 of more than €6bn as it expanded its store base.
However, like-for-like sales in the 51 weeks to 22 September declined 3.1% as the group continued to be hit by supply chain issues affecting the availability of stock.
Pepco did not provide trading details on Poundland in the pre-close trading update.
It added that EBITDA for the year was expected to be at least €900m as it improved gross margins, which would be about 20% higher than in 2023.
Executive chairman Andy Bond said he was pleased with the positive progress made this year.
“While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition and improving our supply chain capabilities,” he added.
Diageo CEO Debra Crew said this morning that the global environment for the group and the industry remained “challenging” but added that trading expectations were unchanged.
“While consumers continue to be cautious in this environment, we are focused on strengthening the resilience of our business through operational excellence, productivity and strategic investments to win quality market share,” Crew said ahead of the AGM later today.
She added that the fundamentals for the spirits industry remained strong and Diageo was well positioned to outperform the market when conditions improve.
Shares in the group increased 4.8% to 2,618.5p this morning.
Losses have reduced at brewer Adnams as it boosted revenues by 6% to £32m in the six month to 30 June.
However, the topline came in below expectations at the underpressure company.
Adnams said the off-trade had experienced significant growth in the half, delivering growth of 2.7% in a declining market.
Ghost Ship drove the majority of its gains in the channel.
Interim chairman Simon Townsend said the funding review at the group to bring in a new investor continued to be progressed.
He added proposals for additional funding had been made but were not “ufficiently attractive to merit further consideration”.
Adnams would focus on divesting non-core assets in the short term in an attempt to rebalance debt levels, he said.
“Looking ahead, with consumer confidence and general economic conditions appearing more positive, our asset disposal programme is now underway, and the funds realised will be used to reduce our debt,” he added.
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