Member Info for Jimbo1122

Although the share price has fallen this morning I think it will start to rise again quite quickly when the City get their head around the fact that the debt is being reduced and the fall in sales is due to the reduction in give away vouchers. The sales that are lost were sales that the company wasn't making any profit on anyway. Profit is king.

I am more confident than ever that MRW really is now on the road to recovery. The company is now much more efficient having reduced core costs and the supermarket price war is noticeably starting to ease. The most significant thing recently was the fact that the discounters profit went down despite a significant sales increase. Anyone who runs a business knows the old adage--sales is vanity, profit is sanity. You can be sure that if the big four increase their prices then the discounters will follow suit because there is very little to gain by increasing the price differential when they don't need to. If i was the CEO i would seriously be looking at giving each store more autonomy on prices and product range as each store has very unique trading conditions ie some have discounters on their doorstep while some practically have a monopoly in their own given area. They all have different customer bases that can also be exploited on an individual basis and i know that this is something that David Potts has already identified. MRW used to spend £5 to gain £1 in extra sales and thankfully this has finally been stopped. I am holding my shares in the strong belief that profits will now start to improve in the medium to long term.

It's either that or a large tin of beans fell of the shelf and walloped him on the head when he was in a Morrisons store as a child.

It's been a great two weeks going from £1.49 to £1.82. You can be sure that many grossly overpaid traders were selling at the price RSID was buying the shares. I'm not tempted to sell yet because I'm holding for the long term and it does look as though MRW (and others) have realised that it's a fools game trying to match the discounters and that making a profit is more sensible than trying to buy sales.

The wage increase seems impressive but all is not what it seems. The staff will lose 30mins paid break per day and will no longer receive overtime payments (1.5x) for working on a Sunday. The wage rise due in October has now been cancelled and replaced with a 2% of 6 months salary that is payable in November and covers October to March and must be paid back if you leave the company before the 6 month period has elapsed. To keep the pay differential there is now a skill supplement which is an additional £1.20 per hour for qualified bakers and butchers. I understand that management terms will be negotiated separately. Still pretty generous though and the way wages are calculated is being tidied up considerably. I reckon that staff numbers will also be reduced by natural wastage and everyone will need to work a bit harder to justify their wage.

Mulder--I agree with you completely about these traders who seem to care about nothing more than making short term profits. I hold 22,500 MRW shares and these are being held for the long term as i believe that MRW will adapt to the changes in the market place. Don't lets forget that despite all the money that has been wasted on opening and closing convenience stores, pulling out of new large store ventures after spending millions on planning approvals etc, misting machines and ill thought out aquisitions (Kiddiecare) etc etc MRW are still making profits and their debt is decreasing. David Potts has used his honeymoon period to clear the decks, albeit at some cost but now he has to start delivering and he will along with the hugely experienced team of Directors now on board. No more costly mistakes will be made and David Potts has already stated that they will look at each store individually and stock more appropriate goods for the type of customer that frequents it. The possibilities are endless all they need to do is use a bit more inventiveness eg why not introduce a lucky dip at each checkout for everybody who spends over £30.00 with a golden ball that if pulled out gives that customer all the goods purchased for free (for every100 balls--1 golden ball) . Naturally, i will be looking for royalties if they go ahead with that scheme.

Actually, it won't cost MRW a penny because they will put up food prices along with all the other Retailers to pay for it. In fact, don't be surprised if all the retailers increase prices by a little bit more than necessary --the utility companies have been doing it for years. It's the general public who will cover the higher wages.

The share price is now less than the value of the assets the company has and don't forget that MRW is still making profits. Most Morrisons stores are in good locations and will always attract custom as long as they keep within reasonable touching distance on price with the discounters--MRW doesn't need to match or beat the discounters because they offer better quality, better range of products, toilet facilities, cafe, wide aisle's, faster checkout , friendlier staff (most of the time) etc etc. Honestly, the last time myself and my wife went in to a discounter (Lidl) we had a look at the queue and walked out without buying anything. If i worked in the City i would be piling into MRW right now and simply wait for MRW to get taken over or at worst for MRW to get things back on track. The shares will not go down much more now because of the asset value of the company--the only way is up. Definetely a strong buy.

I honestly wonder sometimes what on earth is going on at Morrisons as they constantly seem to be throwing money away at every opportunity and for no good reason. The Kiddycare company was a well run business until Morrisons messed it up completely and then sold it for a huge loss. Surely it would have been cheaper to create space in their existing supermarkets to stock and sell the products and also advertise the fact that customers could also order goods online--after all, how many typical Morrisons customers were even aware of the fact that Morrisons could supply this type of product--almost certainly less than 5%. Misting machines was a waste of money but why get rid of them when the damage had already been done --it must have cost money stripping them out and sales would not have increased one iota by doing so. They should have been phased out naturally when they reached the end of their operational life. Convenience stores--Great idea in theory but Dalton Philips did not carry out due diligence and bought a joblot of stores in " inconvenient" locations and at great cost. The management at Morrisons pressed ahead with fitting out and opening over 100 stores depsite at that time being fully aware of the poor performances of the stores already up and running--absolutely dreadful decision which has cost Morrisons a not inconsiderable amount of money. A consortium has now bought these (fully fitted out) stores at a bargain price and unbelievably Morrisons will still have to pick up the tab if any fail to make money. The law of averages state that some of these stores would have been profitable so keep them running and the rest could have been converted to Morrisons Budget stores or turned into a chain of Morrisons cafes, Pharmacies, dry cleaning outlets etc. The biggest cock-up by a mile is something that the media has not cottoned onto as yet and that is the shambolic reduction of a middle management tier. This literally took 6 months to carry out during which time no-one in middle management knew if their jobs were safe or not. They had to go through several interviews and tests including pyschological tests to keep the same job they had done perfectly adequately for many years. What actually happened is the best people all wanted to take the redundancy packages and Morrisons not only lost good people but had to pay thousands of pounds to each of them to take their talents elsewhere. Other Managers were moved to other departments that they did not have a clue about running and others were demoted---total madness and it has totally ruined moral within Morrisons. Cutting prices is fine but don't try and beat the discounters at their own game as you will not win. A good example of this is an article i read about Morrisons spending £100,000 revamping the toilet facilities at one of their stores while trying to match the discounters on price---AAArrrgh. I've now ran out of space to continue but hopefully you will get the jist

I've just bought another £10,000 worth of shares because I have every confidence that the new Management team are really starting to get to grips with transforming the company into a much more proactive and efficient company. Convenience stores, on the whole, were a high cost, low return part of the business. Having said that,I wouldn't be surprised if MRW are able to continue to run the fifty most profitable stores by renting back from the investment company as part of any sale agreement--that would make perfect sense for both parties. I think the share price will slowly start to climb back to around the 1.90 mark and don't forget that they would be a prime takeover target for the likes of Amazon if the rumours are true that they wish to enter the food retailing sector. If that happens then you will be looking at £2.70 a share.

If true, then it suggests that they are not being trained correctly. I bet the wastage is dramatically reduced in that store in future but good luck trying to find any sandwiches, rolls, pasties, vegetables etc in that particular store after 5pm.

So there we have it--UBS reckon that we should be buying into a company that was downgraded to junk status in January and since then have posted quite horrendous year end figures. They then follow this up by advising everyone to sell their holding in a solvent company that has recently appointed a hugely experienced CEO who is slowly but surely starting to turn things around. The worst part of all this is the huge number of idiots who work in the City most of whom seem totally incapable of thinking for themselves and simply follow the flock , baa, meh and bleat.