McColl’s sales rise despite profit hit from Co-op deal

Morrisons has pitched a last-ditch deal that would avoid McColl’s collapsing into insolvency, preserving the majority of its stores and workforce, Sky News has revealed.
The proposal was lodged with PwC, the adviser to McColl's lenders, with a response expected imminently.

McColl’s has reported a rise in sales amid its interim results, but profits took a hit from the recent acquisition of nearly 300 Co-op stores.

Pre-tax profits for the half year dropped to £4.5 million from £8.2 million in the previous half, while total sales jumped 7.6 per cent to £504.8 million and like-for-like sales edged up 0.2 per cent.

EBITDA also rose from £16 million to £16.5 million, but took a £1.3 million hit from pre-opening costs relating to the Co-op acquisition.

McColl’s chief executive Jonathan Miller says the acquisition has put the convenience store chain in a “strong position” and says early trading is hitting targets.

“We are delighted to have completed the integration of the acquired stores, on time and on budget” he said.

“We have welcomed over 3500 new colleagues who have done a great job in supporting customers through the transition, and early trading is in line with our expectations.

READ MORE:  McColls eyes possible purchase of Tesco‘s One Stop chain

“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.”

Acknowledging the upcoming challenges in the grocery sector due to declining consumer sentiment, Miller said McColl’s “has a good record of trading resiliently through periods of economic instability”.

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