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RNS Number : 1295J McColl's Retail Group plc 25 April 2022
25 April 2022
McColl's Retail Group plc
Update on trading and discussions with key stakeholders
McColl's Retail Group ("McColl's" or "the Group") today issues an update on
current trading, outlook and discussions with its lenders and key commercial
partner.
Current trading
The Group has experienced mixed trading since the last update on 28 February
2022. While a recovery in trading performance had continued during the first
half of March, the business has since experienced softer trading through the
Easter period, impacted by reduced consumer spending and continued supply
chain disruption across the industry. The Group is working closely with its
wholesale supplier to mitigate product availability issues.
Despite this, the Group's Morrisons Daily stores continue to perform strongly,
delivering like-for-like sales growth that is at least 20% better than
non-converted, comparable stores, and ahead of the total convenience market.
All Morrisons Daily conversions in 2022 have benefited from the introduction
of a Morrisons food-to-go (FTG) proposition, offering customers a broadened
range at a compelling price point.
The Morrisons Daily store conversion programme continues at pace with 69
stores opened in FY22 so far, and the Group continues to work on the
previously communicated programme of Morrisons Daily store conversions. The
move to convert stores to the Morrisons Daily format is fundamentally
reshaping the business into a more profitable and sustainable model in the
medium term.
Outlook
As a result of the challenges outlined above, including a weaker than expected
Easter performance and the widely reported impact of cost inflation pressures,
the Board now expects adjusted EBITDA for the current financial year (FY22) to
be no higher than the level achieved in FY21 (£20m on a pre IFRS 16 basis).
The Group continues to review costs across all parts of the business in order
to help mitigate the challenging trading conditions, as well as being even
more targeted in its capital deployment.
Update on key stakeholder engagement
The Group acknowledges and appreciates short term credit support received from
its commercial partners and senior lenders. A potential financing solution is
under active discussion with its key commercial partner and lenders which
would resolve the short term funding issues and create a stable platform for
the business going forward. It should be noted that even if such a
successful outcome is achieved it is increasingly likely to result in little
or no value being attributed to the Group's ordinary shares.
The Group expects to delay the publication of full year results until the
resolution of the financing discussions. This may mean that the publication of
the full year results is delayed beyond the end of May 2022, which is the
current deadline for filing under the Listing Rules. A further update will be
made as and when appropriate.
Enquiries
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
About McColl's Retail Group
McColl's is a leading neighbourhood retailer, with an estate of over 1,100
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.
LEI: 213800R1TLR536P8YJ67
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