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View the article online at http://citywire.co.uk/wealth-manager/article/a245645

More reasons to like Morrisons

by Gavin Lumsden on Jan 30, 2003 at 15:54

Morrisons, the outsider in the scramble for Safeway, has proved again how well it can do on its own with an impressive set of January sales figures.

In the four weeks to 26 January like for like sales, excluding fuel, rose 5.2% on the same period a year ago. Including petrol sales, which surged 14.5%, like for likes were 6.3% higher.

Home and leisure sales were particularly strong, up 10%, proving that the company is diversifying successfully away from food, where sales grew 4.7%.

Shares in the Bradford-based grocer (MRW) jumped over 8p, or 5%, to 167.25p reviving the value of its all paper offer for Safeway which from the beginning has been hampered by its sagging equity value. Last week Safeway dropped its recommendation for the bid, inviting formal offers from Wal-Mart, Sainsbury's, Kohlberg Kravis Roberts, Tesco and Philip Green. So far only Green has confirmed he will make a cash offer although no details are expected for a few weeks.

Citywire Verdict:

Early fears that the bid for Safeway would distract chairman Sir Ken Morrison and his team have proved unfounded. After a strong set of Christmas sales today's figures confirm how well run the company is. Since unveiling its bid for Safeway Morrison shares have dropped from 198p. Perhaps it is time they got closer to that level, as we suggested two weeks ago.

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