Retailer McColl's sinks 60% amid funding quest, profit warning (updated)

MccollS Retail

28/02/2022 09:28

(Adds background, details and share move)
    Feb 28 (Reuters) - Shares of McColl's  MCLSM.L  slumped
nearly 60% to a record low on Monday as the British retailer
gave a profit warning and said it was looking at new funding
options after an unnamed party withdrew its takeover approach to
buy the company.
    The convenience store chain said it was not in talks with
any party regarding a complete takeover, but was reviewing
indications of interest for parts of its business.
    McColl's said its fiscal 2022 adjusted core profit would now
fall "slightly" behind current market expectations after a weak
first quarter in which a surge of Omicron cases hurt store
footfall in Britain.
    Shares of McColl's were last down about 58% at 3 pence on
the London Stock Exchange by 0855 GMT. The company's market
value at current prices stood at 8.3 million pounds. 
    The company, which has been negotiating with lenders since
last year, said it was in talks with banks for a longer-term
agreement to secure more funding.
    The Brentwood, UK-based retailer said it expects net debt in
the region of 100 million pounds at fiscal 2022-end, up from 97
million pounds at end of the previous financial year.
    "The Group continues to believe that a financing solution
will be found that involves its existing partners and
stakeholders," McColl's said in a statement.
    The company, which operates more than 1,100 convenience
stores, did not name the party that made the takeover approach. 
    Sky News had reported on Saturday that McColl's is working
with advisers to find a buyer or parties to inject fresh capital
into the business.
    The company said on Monday product availability in its
stores, hurt by supply chain issues affecting many British
companies, had improved since the start of the new fiscal year. 
 
    
    

 (Reporting by Aby Jose Koilparambil and Sachin Ravikumar in
Bengaluru; Editing by Sherry Jacob-Phillips)
 ((abyjose.koilparambil@thomsonreuters.com; +919986528692))