Q4 and Full Year Trading Update

RNS Number : 2179Y

McColl's Retail Group plc

04 December 2017

 

Q4 and Full Year Trading Update

McColl's Retail Group plc, the convenience retailer, ("McColl's" or "the Group") today announces its trading update for the 13 and 52 week periods ended 26 November 2017.

CONTINUED STRONG REVENUE GROWTH

STRATEGICALLY WELL POSITIONED FOR THE FUTURE

Financial and operational highlights:

• Total revenue up 28.9% in Q4 and 19.1% for the full year following successful integration of 298 acquired convenience stores (completed in mid-July)
• Full-year like-for-like (LFL) sales¹ up 0.1%, with significant mix improvements as a result of growth in key grocery categories alongside declining traditional categories, split as follows:
  • LFL sales in convenience stores up 0.1%
  • LFL sales in newsagents down 0.2%
• Total LFL sales down 1.1% in Q4 impacted by declining traditional categories and unfavourable weather
• LFL sales in recently acquired and converted stores² up 1.3% in Q4 and 2.4% for the full year
• 25 convenience store refreshes successfully completed in H2, bringing the total to 27, with a further 100 planned in FY18
• McColl's is one of Subway's fastest growing UK franchisees with 18 franchises now in operation
• The Group remains on track to achieve results for the full year in line with management's expectations

Jonathan Miller, Chief Executive, said:

"I am delighted to report another strong quarter of revenue growth. For the first time the business has achieved annual revenues of more than £1bn, boosted by our transformational acquisition of 298 high quality convenience stores last year, demonstrating that this is now a business of real scale.

"McColl's is well positioned to continue to take advantage of the growing convenience market, with clear opportunities to enhance organic growth across our estate, as well as continued expansion through our acquisition programme.

"As we look ahead to next year, we will focus on delivering an enhanced customer offer in over 1,300 stores through the groundbreaking wholesale partnership we signed with Morrisons, which will see us launch hundreds of Safeway branded products, exclusively in McColl's from January 2018.

"We will also extend our successful convenience store refresh programme to 100 more stores next year. Customer feedback remains very positive and the early performance of refreshed stores has delivered significant increases in footfall and sales, and increased uptake of higher margin convenience categories, including fresh and chilled food."

Update on wholesale supply arrangements

We were both sad and disappointed to learn that Palmer and Harvey (P&H) was placed into administration on 28 November 2017. P&H has been a long-time partner of the McColl's business and we have been grateful through the years for their continuing support.

Our priority is to minimise any potential impact on customers. We are in ongoing discussions with our supply chain partners, and manufacturers, with a contingency plan already in place to ensure continuity of supply to the around 700 newsagents and smaller convenience stores, previously supplied by P&H, within our estate of 1,611 stores.

[1] Like-for-like sales reflect sales from stores that have traded throughout the current and prior financial periods, and sales include VAT but exclude sales of fuel, lottery, mobile phone top up and travel tickets.

[2] LFL sales in stores acquired or converted between 2015-2016 which have traded for over 12 months.

Enquiries

Please visit www.mccolls.co.uk or for further information, please contact:

McColl's Retail Group plc                                                       Media enquiries:

Jonathan Miller, Chief Executive                                              Headland

Simon Fuller, Chief Financial Officer                                         Lucy Legh, Rob Walker,

Naomi Kissman, Head of Investor Relations                            Ewa Lewszyk       

[phone]                                                               [phone]

The Group's Preliminary Results for the 52 week period ended 26 November 2017 will be released on 19 February 2018.

Notes to editors

McColl's is a leading neighbourhood retailer, with an estate of 1,611 managed convenience stores and newsagents. We operate 1,279 McColl's branded convenience stores as well as 332 newsagents branded Martin's across the UK, except in Scotland where we operate under our heritage brand, RS McColl.  Our 22,000 dedicated colleagues serve 5.5 million customers every week, and we are the largest operator of Post Offices in the UK, with 588 in-store counters/branches.

 

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