- Morrisons drops out of FTSE 100
- The grocer’s share price has slumped 13% this year to 151p
- Relegation could spark share sell-offs by tracker funds
Supermarket giant Morrisons has fallen out of the FTSE 100 for the first time in more than 14 years after its share price plummeted.
The grocer’s market cap has dropped to around £3.51bn following a 13% decline in its share price to 151p this year.
New boss David Potts took the reins in March, weeks before the grocer reported a 52% slump in profits to £345m.
Potts admitted it would be a “long journey” to turn the embattled retailer around and he has already axed 720 head office jobs and sold Morrisons’ M-Local convenience chain to concentrate on rejuvenating sales in its core supermarket business.
But a 2.6% drop in like-for-like sales during its third quarter ending November 1 sparked a further fall in its share price.
That has pushed Morrisons out of the FTSE 100 this afternoon, the London Stock Exchange said, based on Tuesday’s closing price, which left it 111th in the list in value terms.
The share price of a business is used to decide whether it is included in the FTSE 100 index. The top 90 firms gain automatic admittance, but if a company’s value falls outside of the top 110 then they face being relegated.
The grocer’s demotion into the FTSE 250 could trigger share sales by tracker funds which typically only follow the UK’s top 100 companies.