Sectors > Top Reports > Morrisons Memo 140122

Morrisons Memo 140122

Morrisons. Significantly More Leveraged Trajectory Than ASDA. How Sustainable Is Pro Forma Capital Structure To Revenue Loss To Aldi From Aldi’s Planned New Store Openings? Store-By-Store Analysis
PUBLISHED: 14 January 2022
PAGES: 130
SUBMARKET: Morrisons, Top Reports, Top Reports,


Why Read?

  • Understand how resilient Morrisons’ EV, FCF, leverage and liquidity are to potential revenue loss: (1) to Aldi as Aldi executes on its planned store openings to 2025; and (2) to normalisation of COVID-induced food stock-piling 
  • Understand how well covered Morrisons’ to-be-issued Senior Secured Notes (SSNs) and Senior Notes (SNs) are across our base and bear cases (assuming these are a straight terming out of Morrisons’ Senior Secured and Junior Bridge Facilities) and their risk relative to ASDA’s SSNs

What’s New?

  • Catchment area analysis of extent of competition Morrisons may face from each of Aldi’s planned new store openings to 2025
  • Comparison of Morrisons’ KPIs vs other UK food retailers – sales and EBITDA densities, store estates, rent levels, margins, cash generation
  • Financial projections, DCF valuation and sensitivities, across base and bear cases

Questions Answered

  • Has Morrisons already absorbed, over FY 14- FY 16, most of the competitive impact from Aldi’s rise or is Morrisons still particularly at risk of further market share loss to Aldi from the latter’s plans to open a further c. 300 stores by 2025?
  • How resilient is Morrisons’ pro forma capital structure to revenue loss to Aldi from Aldi’s planned new store openings?

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