McColl’s Retail Group plc, one of the UK’s leading convenience retailers, has today announced its Interim Results for the 26 week period ended 28 May 2017.
Total revenue up 7.6% to £504.8m (2016: £469.2m) benefitting from the on-boarding of stores acquired from the Co-op, around two thirds of which were trading at the half year and all by the end of July.
Like-for-like (LFL) sales were up 0.2% in H1; LFL sales up 1.4% in Q2, in part supported by favourable weather and our evolving mix of growth products. LFL performance in recently acquired and converted stores3 up 2.8% in H1; 3.8% in Q2.
The gross margin improvement trend continued, up 90 basis points to 25.4% (2016: 24.5%). Adjusted EBITDA increased to £16.5m (2016: £16.0m), despite being impacted by £1.3m pre-opening costs relating to the acquisition.
Profit before tax, impacted by £2.3m exceptional costs and £1.3m pre-opening costs, was £4.5m (2016: £8.2m).
The firm successfully integrated 298 quality convenience stores acquired from the Co-op, on time and on budget.
The current store base comprises 1,292 convenience stores and 358 newsagents – an 80% increase in convenience stores since the IPO in 2014, with around 10 single convenience store acquisitions planned for H2.
A wholesale retender is in progress, providing an opportunity to grow and develop McColl's customer offer, and leverage itsincreased scale
Progress on Subway continues with one further outlet opened in H1, four planned in H2 and a broader plan developed for 2018 and beyond.
Jonathan Miller, Chief Executive, said, “I am encouraged by the performance we have delivered over the first half of the year as our business has continued to gain momentum. We have traded well in a challenging environment and also benefited from the recent hot weather, which has helped to drive sales in key growth categories including grocery and alcohol.
“We are delighted to have completed the integration of the acquired stores, on time and on budget. We have welcomed over 3,500 new colleagues who have done a great job in supporting customers through the transition, and early trading is in line with our expectations. With all 298 stores now on board, they are expected to make a material contribution to sales and profit in the second half of the year and beyond.
“Our focus remains on enhancing our convenience proposition through growing market share, developing our product ranges and delivering excellent customer service.
“As the wider convenience and wholesale sector evolves and continues to grow, McColl’s is in a strong position to benefit. We remain confident that our standing as a leading neighbourhood retailer will allow us to continue to achieve further progress against our strategy and deliver sustainable returns for shareholders.”
