// McColl’s has said it could struggle to meet management expectations for the full year
// The retailer intends to launch capital to accelerate growth plans – including the rollout of the Morrisons Daily format
// McColl’s recorded a half-year loss of £6.3m – a 530% plunge on the same period last year
McColl’s shares took a hit after the convenience retailer warned that its full-year performance could fall short of expectations due to availability issues.
The retailer also used its trading update yesterday afternoon to confirm plans for a £35 million equity raise.
McColl’s recorded a loss after tax of £6.3 million in the 26 weeks to May 30, down 530 per cent year-on-year.
Meanwhile, total revenue was down 5.3 per cent to £572.7 million, mainly due to store closures, but like-for-like sales inched up one per cent for the period as more customers shopped locally during lockdown.
The retailer also reported an adjusted EBITDA decline of 13.2 per cent to £24.3 million, attributed to ongoing Covid-19 related costs and lower gross profit.
Throughout the six-month period, it converted 25 of its stores to the Morrisons Daily format, with a total of 56 stores now in operation.
McColl’s also confirmed plans for a capital raising comprised of a firm placing to raise £30 million and an open offer to raise up to £5 million as it looks to accelerate its partnership with Morrisons.
The proceeds will be then used to increase the number and accelerate the pace of rollout of Morrisons Daily stores from 56 to 350 and to further improve the grocery infrastructure in the Morrisons Daily sites.
They will also be used to strengthen the balance sheet.
“We have continued to play an important role serving local neighbourhoods through the challenges of Covid-19, sustaining like-for-like sales growth despite the strong prior-year comparator in Q2 following the first national lockdown,” McColl’s chief executive Jonathan Miller said.
“Many of the changes in consumer behaviour we have seen since the onset of the pandemic have continued in 2021 with customers spending less on impulse goods, but buying more take-home and multipack products, impacting overall margins.
“Alongside the impact that the industry-wide shortage of delivery drivers has had on our product availability, we are confident that these temporary trading effects will reverse as restrictions ease and distribution returns to normal.
“During the period we made good progress against our strategic initiatives. We are delighted with the performance of our Morrisons Daily conversions and we now have a blueprint for this model that offers a strong return on investment.
“Looking ahead, whilst the wider economic outlook remains uncertain, we have clear demand for our grocery-led convenience offer, and our focus in the second half will firmly be on the continued roll-out of the Morrisons Daily stores, to help drive sustainable, profitable growth over the medium term.”