Three years of flat profits at Morrisons will test Dalton Philips' need for Ant and Dec

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Nobody does consolation quite like Ant (Taiwan OTC: 3646.TWO - news) and Dec. The identikit Geordies are masters of the arm round the shoulder just as the blubbing contestant gets booted off Britain’s Got Talent beaten by Pudsey, the demented dancing dog.

So you have to say it was a pretty smart move by Wm Morrison’s chief executive Dalton Philips to hire the pair on the eve of the supermarket chain’s Christmas trading statement just in case he might need a shoulder to cry on.

As things turned out, Philips (Amsterdam: PHIA.AS - news) just about got away with it. A 2.5pc dive in like-for-like sales was indeed “disappointing”, as Morrisons admitted. But at least there was no profits warning thanks, in part, to some careful expectations management that had already seen the City’s baked-bean counters chop their forecasts. Hence the mere 0.8 drop in the shares to 256.1p

That said, it’s tough to see where the profits growth is coming from any time soon. For starters, the market is every bit as “difficult” as Philips says it is, with cash-strapped shoppers more alive than ever to the joys of Aldi or Lidl. Not least up north, where Morrisons has its roots, despite 2003’s purchase of Safeway (NYSE: SWY - news) .

And that’s exacerbated by what Philips sees as problems in articulating Morrison’s “key points of difference”, such as also being Britain’s second biggest food supplier with its own butchers, bakers and fishmongers. Apparently, Ant and Dec will be driving this message home, helped by their grasp of the bush tucker market from I’m A Celebrity... Get Me Out Of Here!

But the biggest explanation for the sales fall and the hardest to fix is that Morrisons is so far off the pace in two big growth markets: convenience stores and online. Whether it is as big a failing as currently appears is not clear. But both markets need addressing pronto.

Philips is loath to blame his predecessor Marks & Spencer (Other OTC: MAKSY - news) chief executive Marc Bolland but Morrisons has completely missed the convenience store boat. The upshot is that whereas Tesco (Other OTC: TSCDY - news) has more than a thousand such stores, Morrisons has 12. Philips is now targeting another 50 by the end of 2013 but ruefully admits there are no big deals left to build market share quickly, such as Tesco’s acquisition of the One Stop chain. Bolland had his hands full integrating Safeway but Morrisons really needed a similar big deal.

Online is trickier because maybe there really is what Philips calls “last-mover advantage”. Nobody is making money in online food, as Ocado regularly shows, which is no surprise when a retailer runs up extra costs of around £15 per £70-£80 shop but charges about £3.50 for the hassle of delivering it. But the trouble is that online food is growing at around 20pc a year and, if you’re not in it, rivals just nick your shop sales.

Philips is convinced Morrison’s can find a cleverer way to enter the market. To learn the ropes it bought a £30m stake in America’s Fresh Direct a rare profitable internet food retailer. It’s also got into non-food online by buying Kiddicare. And, sure, with just 6pc market share within the M25, there’s less risk of cannibalising shop sales from its new Feltham distribution base.

Even so, investment in convenience stores and online must eat into Morrison’s market-leading margins. How long shareholders will stomach that with analysts forecasting flat profits of around £880m for the next three years should prove a decent test for Philips. But, at least if things get tricky, Ant and Dec will be on hand.

= Ladbrokes (LSE: LAD.L - news) ' Richard Glynn is just one fence away from his first acquisition =

Luckily, Richard Glynn isn’t a steeplechaser. The Ladbrokes chief executive has made an infuriating habit of coasting round the acquisition circuit, only to refuse at the last.

He balked at 888 and Sportingbet (LSE: SBT.L - news) , pulled out of the race for Australia’s Centrebet and made an abortive run at Playtech. So it is a bit of a turn-up for the form book that he has plugged away like a dour stayer in his pursuit of Irish betting exchange Betdaq.

When we first revealed Ladbrokes’ interest in Betdaq almost exactly a year ago, Glynn got a stable hand to deny all plans to buy the business, claiming instead that: “It’s only a discussion about technology supply.” Well, things must have moved on because now the bookie is admitting to “discussions regarding a potential acquisition” of Betdaq, which just happens to belong to Irish billionaire Dermot Desmond, himself a 2pc Ladbrokes shareholder.

The logic for a deal mooted at around £30m is that Betdaq will offer a ready-made exchange for at least a third of Ladbrokes’ customers who now also wager with Betfair.

Indeed, Betfair, which is 20 times the size of Betdaq, has demonstrated the logic in reverse by building a fixed-odds business an acknowledgement that while exchanges offer better odds they are less attractive for such things as multiple bets or betting in running.

Strategically, there’s some logic. But Ladbrokes will have to put some serious liquidity into Betdaq if it’s going to rival Betfair. That means hefty marketing spend and channelling funds currently laid off on course or elsewhere into its in-house exchange. Neither is Betdaq a fix for the bookmaker’s digital business, which is still some way off the pace.

Still, after almost three years in charge, it’s nice to see Glynn at last having a punt always assuming he doesn’t balk at the last.

= An EGM could yet be in the interests of Bumi (Other OTC: VLLRF - news) 's long-suffering shareholders =

IT’S rum for Bumi’s shareholders that Nat Rothschild only started doing proper due diligence on the group’s Indonesian operations after he’d persuaded them to pay £10 a share to invest.

But his analysis of the current mess should not be glibly dismissed. The board is riven with conflicts of interest not least given chairman Samin Tan’s membership of an investor concert party. And, given how long it has known about some financial “irregularities”, it’s taking an age to clean them up.

Bringing everything to a head via an EGM to vote on 12 of 14 directors might yet be in shareholders’ interests as the 7pc rise in the shares suggested. Interestingly, non-exec Sir Graham Hearne is one that Rothschild plans to spare. Is that by any chance because he sits with him on the board of Genel Energy?

alistair.osborne@telegraph.co.uk

twitter: @aliosborne20