Morrison finance chief under pressure

THE finance director at the Morrison supermarkets group is under pressure to resign following last week's shock profits warning, the second in less than a year.

Martin Ackroyd faces calls from two of the company's non-executive directors to step down after telling the City last week that it will miss full-year profit targets by as much as 15%.

David Jones, the former Next boss, and Duncan Davidson of housebuilder Persimmon, have indicated that boardroom changes at Morrison, which took over rival Safeway for £3.2bn last March, are necessary to shake up management thinking.

The integration of Safeway has proved challenging for the smaller Morrison business as it tackles supply issues and a store conversion programme. It now has more than 400 outlets and 150,000 staff.

Leading shareholders are understood to be demanding action following the profits warning, which came after auditors discovered a potential £40m hole in the accounts that Ackroyd missed.

Richard Singleton, a fund manager at F&C Asset Management, said: 'Before the merger Morrisons was a tightly controlled business. But it seems that the controls that worked then are not adequate for the larger business.'

Morrison shares have lost more than 20% of their value over the past year, underperforming the retail sector by 32%. City investors also want to see a succession plan put in place for 73-year old chairman Sir Ken Morrison.

Morrison warned that its full-year pre-tax profits before charges and disposals would come in between £320m-£330m, some £30m-£40m less than analysts had expected. Morrison said the shortfall reflected a change in the way it accounts for supplier income at Safeway.

But the warning went down badly in the City. Directors are due to present full-year results on Wednesday and a decision on any boardroom changes could be presented with the figures.