Troubled grocer Morrisons set for FTSE 100 demotion

Morrisons is facing relegation from the FTSE 100 this month, having been earmarked for demotion by the stock market's committee. 

 

The troubled supermarket, whose share price has fallen more than 15.5 per cent in a year, is the company “nearest to the 111th threshold” to enter the FTSE 250, the London Stock Exchange said today.  

 

Satellite network operator Inmarsat is in line to enter the FTSE 100. The FTSE EMEA committee meets on Wednesday (June 3) to discuss the risers and fallers for this period.

 

Morrisons certainly has had what could be described as an annus horribilis:  the northern grocer has consistently lost market share with the likes of Aldi and Lidl taking a chunk out of the budget supermarket sector.

 

It revealed a 4.9 per cent drop in turnover to £16.8bn earlier this year, resulting in a pre-tax loss of £792m. 

 

Chief executive Dalton Philips was ousted by the company, replaced by David Potts who instantly set about making hundreds of redundancies in head office in order to increase the head count on the shop floor. 

 

Philips is in line for a £3m pay package, but Morrisons is expected to clash with shareholders over the matter this week. 

 

If Morrisons were demoted it would be the only one of the “big four” supermarkets listed in the UK not to be in the FTSE 100. 

 

The FTSE committee said the final decision would be made based on close-of-play data from Tuesday (June 2) and will be made effective after market close on Friday 19 June. 

 

Meanwhile banknote printer De La Rue, renewable energy provider Infinis and consultancy RPS Group are facing demotion from the FTSE 250.

 

De Le Rue's share price collapsed last week after slashing its dividend as pre-tax profits fell 35 per cent to £38.9m for the year to the end of March. 

 

The 202-year-old company cut its final dividend to 16.7p per share, taking the annual payout to 25p – down from 42.3p a year before – amid increase competition and cost pressures. Its share price is down 10 per cent on last week.

 

Conversely Infinis has upped its dividend to 122p per share after transforming from a £29m loss in the year to end-March 2014 to a profit of £28.1m in the most recent financial year. It also has the backing of plenty of analysts out there, including Investec, but over the year-to-date its share price has fallen 15 per cent.

 

RPS' share price meanwhile has fallen over the last three months, dropping more sharply after it acquired Norwegian Metier Holding for £22.3m. 

 

If these three companies drop out of the FTSE 250, there are seven potential companies vying to replace them. 

 

Challenger bank Aldermore; recently listed Auto Trader Group; B&M European Value Retail; John Laing Group; Onesavings Bank; Shawbook Group; and Neil Woodford's fund the Woodford Patient Capital Trust.