McColl's Retail Group plc Q4 and Full Year Trading Update (1463J)
December 03 2018 - 1:01AM
UK Regulatory
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RNS Number : 1463J
McColl's Retail Group plc
03 December 2018
McColl's Retail Group
Q4 and Full Year Trading Update
McColl's Retail Group plc, the convenience retailer, ("McColl's"
or "the Group") today announces its trading update for the 13 and
52 week periods ended 25 November 2018.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
Financial and operational highlights:
-- Total revenue down (0.5)% in Q4; up 8.3% for the full-year reflecting the annualisation of the 2017 acquisition
-- Total like-for-like (LFL)1 sales flat at 0.0% in Q4, an improvement on Q3 supported by a strong performance in
tobacco; with full-year LFL sales down (1.4)%
-- 59 convenience store refreshes completed in the year, delivering average sales uplifts above 5%
-- 11 new convenience stores acquired in 2018
-- Continuation of estate optimisation programme with 66 under-performing newsagents and smaller convenience stores
removed in the year
-- Further sale and leaseback transactions completed in Q4 generating full-year cash proceeds of GBP25m and
significant profits on disposal
-- Year-end net debt materially lower than expected at around GBP100m
-- In light of transitional challenges and continued difficult trading conditions, adjusted EBITDA for FY18 now
expected to be around GBP35m
Outlook
It the last 12 months, following the collapse of Palmer &
Harvey, we have experienced significant supply chain disruption and
have needed to accelerate the rollout of Morrisons supply to 1,300
of our stores. The speed of this transition has created significant
challenges and severely disrupted our plans for the launch of
Safeway. We are extremely grateful for Morrisons' support during
this period, and whilst the transition is now complete, we are
continuing to experience a number of challenges. We are working
together to address these issues and to develop an optimal range
and promotional offer for the future.
In addition, a stronger performance in tobacco, relative to
other categories, has resulted in a lower conversion of sales to
profit than anticipated. As a result, we now expect adjusted EBITDA
for FY18 to be around GBP35m.
We are pleased, however, to confirm that we have significantly
reduced net debt, to a level lower than previously expected. We
have also entered into revised banking arrangements. Whilst our
existing financing is in place until mid-2021, a number of changes
have been made to the terms to give us additional flexibility to
execute our strategy.
The Board remains committed to the long-term strategy for the
Group and the opportunities this will bring. We will continue to
develop our convenience offer, supported by our store refresh
programme; focus on customer service; and increase our
neighbourhood presence.
In the short term, managing cost pressures will continue to be
critical, the most significant being an increase in the National
Living Wage. To improve efficiency we are investing in systems and
processes, alongside our programme of estate optimisation. We also
expect continued uncertainty for consumers which will require us to
demonstrate further competitive retail pricing. As a result we now
expect adjusted EBITDA for FY19 to be no more than a modest
improvement on FY18.
Preliminary Results for the 52-week period ended 25 November
2018 will be released on 18 February 2019.
Jonathan Miller, Chief Executive, said:
"2018 has been a very difficult year for the business, marked by
unprecedented supply chain disruption and ongoing challenges. I am,
however, extremely grateful for the continued hard work of all my
colleagues and the ongoing support of Morrisons.
"Looking ahead, we expect competition in the grocery retail
sector to remain intense and we face into significant cost
pressures. Important to our future success will be continuing to
develop our partnership with Morrisons, alongside our plans to
enhance our neighbourhood convenience offer by improving the
quality of our estate and our overall customer experience."
[1] Like-for-like sales reflect sales from stores that have
traded throughout the current and prior financial periods, and
sales include VAT but exclude sales of fuel, lottery, mobile phone
top up and travel tickets.
Enquiries
Please visit www.mccollsplc.co.uk or for further information,
please contact:
McColl's Retail Group plc Media enquiries:
Jonathan Miller, Chief Executive Headland
Simon Fuller, Chief Financial Lucy Legh, Rob Walker, Charlie
Officer Twigg
Naomi Kissman, Head of Investor +44 (0)20 3805 4822
Relations
+44 (0)1277 372916
Notes to editors
McColl's is a leading neighbourhood retailer, with an estate of
1,556 managed convenience stores and newsagents. We operate
McColl's branded convenience stores as well as newsagents branded
Martin's across the UK, except in Scotland where we operate under
our heritage brand, RS McColl. Our dedicated colleagues serve five
million customers every week, and we are the largest operator of
Post Offices in the UK, with c.600 in-store counters/branches.
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END
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