REG - McColl's Retail Grp - Trading Statement

Mccoll'S RetailAnnouncement

17/11/2021 07:05

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RNS Number : 6075S  McColl's Retail Group plc  17 November 2021

17 November 2021

 

McColl's Retail Group plc

 

TRADING UPDATE

 

·      Continued supply chain disruption impacts revenues in Q4

·      Strong performance from Morrisons Daily format leads to
accelerated roll out with over 150 stores expected by end of November 2021

 

McColl's Retail Group ("McColl's" or "the Group") today issues an update on
trading.

 

Current trading

At the Group's Interim Results on 12 August 2021, we announced that supply
chain disruption had impacted product availability in stores with a
consequential effect on revenues, and that if these issues did not materially
improve in the second half, our full-year performance may fall short of Board
expectations.

 

As has been well publicised, external factors, including the ongoing
nationwide shortage of delivery drivers, labour shortages at distribution
centres and insufficient supply of key products, including high margin branded
impulse lines, continue to impact the supply chain nationwide and have
intensified in the fourth quarter.

 

While we continue to work collaboratively with our wholesale partner,
Morrisons, to lessen the effect of the disruption, we have been unable to
fully mitigate the impact to stores, leading to significantly lower revenues
than initially anticipated. FY21 adjusted EBITDA pre IFRS 16 is now expected
to be in the range of £20m to £22m. The Group continues to monitor the
situation with its key stakeholders, including its lending banks, who remain
supportive.

 

Morrisons Daily conversions ahead of schedule

Our Morrisons Daily stores continue to deliver strong performance, with
revenue growth significantly ahead of the rest of the estate, driven by a high
grocery mix and wider product choice for customers. The format allows us to
grow customer spend, frequency and loyalty by growing the basket size,
offering customers access to great value fresh food, under the Morrisons
fascia, in their local community.

 

At our capital raise we indicated a 2-3 year payback on investment. Early
indications point to a return towards the shorter end of this range. This
factor, combined with an increase in operational capability, is leading to an
acceleration of Morrisons Daily deployment.

 

On 12 October 2021, we announced the opening of our 100(th) Morrisons Daily,
implementing six store conversions per week. The pace has since accelerated,
and we now expect to reach over 150 Morrisons Daily stores in operation by the
end of November 2021. At this pace, we anticipate reaching our targeted number
of 350 conversions well ahead of our original date of November 2022.

 

Jonathan Miller, Chief Executive of McColl's, said: "It is disappointing to
see supply chain issues worsen through the second half, but external factors
have not eased, and continue to impact much of the UK economy. We are working
collaboratively with our wholesale partner Morrisons to restore in-store
product availability as quickly as possible.

 

"Despite these supply chain issues, I am delighted by the step change we are
witnessing in store performance from our Morrisons Daily conversions. This new
format is showing strong sales growth and is delivering better ROI than we
expected. Our conversion programme is moving at pace, ahead of time and on
budget, and we anticipate reaching 350 Morrisons Daily stores well in advance
of our original target.

 

"I would like to thank our 16,000 colleagues who are working tirelessly to
restore product availability to normal levels across our estate so that we can
continue to serve our local communities to the very best of our abilities
every single day."

 

Forthcoming announcement date

McColl's expects to publish a full-year trading update for the 52 weeks to 28
November 2021 on 8 December 2021.

 

Enquiries

Please visit www.mccollsplc.co.uk (http://www.mccollsplc.co.uk) or for further
information, please contact:

 

   Analyst & Investors:       Tej Randhawa, McColl's    +44 (0)1277 372916

   Media:                     Ed Young, Headland        +44 (0)203 805 4822

                              Rob Walker, Headland      mccolls@headlandconsultancy.com

                              Charlie Twigg, Headland

 

 

Notes to editors

McColl's is a leading community retailer, with an estate of over 1,200 managed
convenience stores and newsagents. We operate McColl's and Morrisons Daily
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.

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014

LEI: 213800R1TLR536P8YJ67

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