Former big-four supermarket Morrisons has had its credit rating lowered on the back of lower profits seen in 2022.
Rating agency Moody’s lowered Wm Morrison Supermarkets from a ‘B1’ to ‘B2,’ following its “underperformance” in the 2022 financial year.
Morrison’s, now the UK’s fifth largest supermarket behind discounter Aldi, reported that underlying profits had fallen 15% to £828mln in the year to October 30, while debt reached £7.5bn.
Moody’s new rating suggests Morrison’s now poses more risk of defaulting on debt payments.
Moody’s had anticipated the retailer’s debt to sit be 6.5 times greater than its underlying profit, rather than the 9.1 times indicated in Morrison’s late-January update.
Analysts from the rating firm said Morrison’s had an “aggressive financial strategy,” while concerns were also raised about its new owners, Clayton Dubilier & Rice, which completed a £7bn takeover in 2021.
Morrison’s, meanwhile, reported sales had increased over the Christmas period and that it had “greater stability” heading into 2023.