After a dismal trading year, Morrisons’ (LSE: MRW) (NASDAQOTH: MRWSY.US) shareholders had an opportunity to vent their feelings about the company’s performance at the group’s AGM yesterday. And they didn’t hold back.
Indeed, several shareholders rose to attack the directors, accusing the group of changing strategy too many times and wasting time going upmarket. Employees also expressed concern about falling morale, following proposed redundancies and shift changes.
And there was one shareholder in particular who gave full rein to his feelings about the failings of Morrisons’ current management — former chairman, and now Life President of the company, Sir Ken Morrison.
Disastrous
Sir Ken Morrison transformed his father’s small business into the UK’s fourth largest supermarket and guided the company for more than 50 years.
Sir Ken retired as chairman in 2008, but made a vocal return at yesterday’s AGM, blasting current CEO Dalton Philips. The former chairman told the current board that the group’s losses were disastrous and the company had failed to run its core supermarkets properly:
“I personally thought they [the results] were disastrous. I warned in 2009 and 2012 that changes being implemented by directors would seriously damage the business … [my comments] were absolutely right and today we have seen the consequences.“
Sir Ken also made a choice quip about his cattle and the group’s performance:
“… When I left work and started working as a hobby, I chose to raise cattle. I have something like 1000 bullocks and, having listened to your presentation, Dalton, you’ve got a lot more bulls**t than me…“
According to those at the meeting, this statement earned a round of applause from other shareholders.
Rebuff
Morrisons’ chairman, Sir Ian Gibson rebuffed this attack, stating that the company had made significant progress during the years since Sir Ken left the company. Sir Ian claimed that the group had returned billions to shareholders and outperformed its peers.
What’s more, the chairman blamed Morrisons’ woes on the failure to develop online and convenience offerings, the only growing sectors of grocery retailing.
Just before the meeting Sir Ian has announced his intention to resign next year, after eight years at the helm.
Frustrated
Morrisons’ founder was not the only one to express their anger at the company’s current management. Other shareholders attacked management, claiming that, “A reputation is everything in business and I think you’ve lost that to a great extent.”
Investors also sought to impress a sense of urgency on management commenting, “I think we’re in a rescue situation here and it needs urgent action. Things need to be done very quickly.“
Sticking the course
Nevertheless, despite the obvious shareholder dissent, Morrisons’ management has decided to stick with the current strategic plan. Management believe that the company can return to its winning streak with price cuts, IT investment, the expansion of its online delivery service, convenience stores and the introduction of a loyalty card.
However, it’s obvious that investors are demanding a change of course and management’s decision to stick its head in the sand could lead to a rebellion.
This rebellion could come in the form of a buyout. Indeed, it was rumored earlier this year that Sir Ken Morrison could return to take Morrisons private again, with the help of private equity funding.
