Morrisons has been racking up losses since its buyout by US firm Clayton, Dubilier & Rice (CD&R), according to new documents filed on Companies House.
The retailer, which was bought by CD&R in October 2021 for £7bn, swung to a loss of £1.5bn in the year after its buyout.
In the year prior to the takeover, Morrisons was one of Britain’s ‘big four’ supermarkets and reported a £201m annual profit, but in the year to last October it sank to a dramatic loss.
Morrisons lost its place in the ‘big four’ last September when it was overtaken by Aldi.
As a result of the buyout, Morrisons took on a £6.1bn debt pile and has been hammered by huge interest repayments, accounting for £400m of the drop.
Last month, the retailer had its credit rating downgraded by Moody’s following poor sales and profits.
According to a report in The Guardian, the credit rating agency downgraded Morrisons amid fears over its ability to repay its debts, switching it from a B1 to a B2 rating in response to factors such as an “aggressive financial strategy, high leverage and private-equity ownership”.
Moody’s also noted that the supermarket had been hit by a fall in sales alongside increased costs, such as energy and wages, and its debts were 9.1 times underlying profits, compared with the agency’s expectation of 6.5 times.
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