McColl’s reports sixth consecutive year of growth

McColl’s Retail Group plc, one of the UK’s leading convenience retailers, has announced its preliminary results for the 52 week period ended 27 November 2016, and a Q1 trading update for the 13 week period to 26 February 2017.

The group saw the total revenue rise by 1.9% to £950.4m (2015; £932.2m), the sixth consecutive year of growth. Like-for-like sales were down 1.9%, but rose by 0.8% in recently acquired and converted stores. LFL sales were also down by 1% in premium convenience and food and wine stores, and down 3.3% in newsagents and standard convenience stores.

Gross margin was up by 25.1% (2015: 24.4%), and operating profit before exceptional items of £9.6m (2015: £9.6m), Profit before tax stood at £17.7m, including £3.1m of exceptional costs (2015: £21.1m with £0.6m exceptional costs).

Jonathan Miller, chief executive, said, “2016 has been a pivotal year for McColl’s during which we were firmly established as a leading convenience retailer, delivered good financial performance in line with expectations and laid the foundations to deliver significant growth in the years ahead. With new appointments to our management team and a refreshed strategy in place, we are ready to begin the next stage of our journey to become your neighbourhood’s favourite shop.”

With a clear target of getting the group to achieve over 1,000 convenience stores by the end of 2016, the opening of the Erdington store in November meant the target was reached and by the end of the year the number of convenience stores had risen to 1,001 and the total estate to 1,375. Of course a big helping hand to achieve those numbers came from the acquisition of the 298 stores from the Co-op for a cash consideration of £117m.

The group continues to enhance the offer for their convenience shoppers. In the last year a further 59 food and wine conversions – reformatting traditional newsagents by introducing a focused range of grocery and alcohol products have been carried out. The food-to-go offer has seen total sales rise 19%.

The group has also introduced over 30 new food to go units and following a successful trial with Subway they now have 13 outlets, with plans for more in the year ahead. There was also the introduction of a ‘free from’ range to a number of stores and a ‘focus on fresh’ trial, introducing a new fresh offer in over 20 stores.

Within the estate there are 547 Post offices meaning customers can use the services at a time convenient to them. With that and Collect+ being added to the existing 91 stores with Amazon lockers, with a further 32 planned by the end of the year, the stores are taking an ever more convenient position within the channel for its customers.

With a new management team in place last year was a pivotal year for McColl's in their journey to become the neighbourhood's favourite shop.

This was Jonathan Miller's first year in charge following James Lancaster stepping down as Chief Executive to become Non-Executive Chairman. Lancaster, who was a founder of the company in 1973 will be succeeded in April 2017 when Angus Porter, who joined the board in 2016 as a Non-Executive Director, will become Chairman. There will still be a place for Lancaster as he accepts the invitation to remain on the board as a Non-Executive Director. Simon Fuller who came into the McColl's business from Tesco as Deputy Financial Officer in 2015 moved into the Chief Finance Officer role vacated by Miller.

McColl's also released results for the 13 week period ended 26 February 2017 where total LFL sales were down by 1.3% in, representing a fourth consecutive quarter of improvement. Total revenue for the quarter was up 2.1%.Integrating the 298 Co-op stores is a key priority and the first store opened in Canvey Island on 31 January, and over 20 stores are now trading as McColl’s.