TIDMMCLS
RNS Number : 9001U
McColl's Retail Group plc
08 December 2021
8 December 2021
McColl's Retail Group plc
FULL YEAR 2021 TRADING UPDATE
for the 52-week period ended 28 November 2021 ("FY21")
Significant strategic progress achieved with Morrisons Daily
roll-out
despite impact of COVID-19 and UK supply chain disruption
Jonathan Miller, Chief Executive, said: "FY21 has undoubtedly
been a tough year for the business, starting with the impact of
COVID-19 restrictions and ending with the widely reported and
ongoing supply chain challenges. Although we have been able to
partly mitigate these external factors, they have still had a
significant impact on underlying trading.
"Despite this, we have made excellent progress on the strategic
initiatives which are firmly within our control, including the
accelerated roll-out of Morrisons Daily conversions within our
estate, which is ahead of our expectations. These Morrisons Daily
stores are generating strong sales growth and enhanced return on
investment. In less than a year's time we expect over half our
revenues to be delivered by this fascia, bringing branded,
supermarket-quality convenience to our customers, with material
scope to deploy further into our estate.
"None of this could be achieved without our brilliant
colleagues, who have been working incredibly hard to keep supplying
our community stores with the food, goods and services they need,
as well as the support from existing and new shareholders through
the capital raise last August."
Financial highlights
-- Total FY21 revenue declined by 11.2% to GBP1.11bn (FY20:
GBP1.25bn), principally reflecting supply chain disruption in the
second half and the conclusion of our store optimisation
programme
-- Two-year like-for-like (LFL)(1) sales growth of 9.1%, with
sales retained at a higher level than pre-COVID. On a one-year
basis, LFL sales declined by 3.3% (FY20: 12.0%)
-- Top-line growth moderated in the fourth quarter due to
industry-wide availability issues across the estate, with one-year
LFL revenues in the period down by 5.0%
-- Adjusted EBITDA pre IFRS 16 is expected to be between GBP20m
to GBP22m (FY20: GBP29.1m). Post IFRS 16, adjusted EBITDA is
expected to be between GBP46m to GBP48m (FY20: GBP57.9m)
-- Net debt impacted by availability and timing of working
capital outflows. Year-end position (pre IFRS 16) expected to be c.
GBP97.0m (FY20: GBP89.6m)
-- Lending banks remain supportive with ongoing discussions
towards an agreement for FY22 and the balance of the facility.
Discussions are expected to conclude by the publication of FY21
results in March 2022
Morrisons Daily store conversion programme
-- Total of 185 Morrisons Daily stores trading at year-end,
ahead of schedule, with 154 conversions completed during FY21
-- Increased target of Morrisons Daily conversions from 350 to
450 stores by the end of FY22, with significant potential to
further increase stores being explored across all store sizes
-- Proven capability of 12 conversions per week, materially ahead of original forecasts
-- H2 conversions delivering 24.8% 2-year LFL sales growth
despite availability issues and 2-year cash payback, with
significant upside opportunity
Operational highlights
-- Format, space and range changes launched across 30% of
McColl's estate, to meet local customer needs whilst delivering
stronger sales and a more profitable mix
-- Uber Eats partnership progressing well across 400 stores,
with trials in Morrisons Daily stores driving an even higher online
basket spend
-- Store rationalisation programme now largely complete with 100
stores divested during the year, leaving 1,165 stores at end of
year (FY20: 1,265)
Outlook
Working with our wholesale partner Morrisons, we have taken
steps to improve availability in our stores. This includes a full
review of product substitutions to address manufacturer led product
shortages, which remains the major constraint. With these measures
we are seeing early signs of recovery, but we expect revenues to
continue to be affected as we start the new financial year.
The accelerated expansion of Morrisons Daily format stores
across the estate remains on track and is delivering strong
improvements in performance versus pre-conversion trading. Our
target of 450 stores in a year's time will fundamentally re-shape
the business, representing 40% of stores and over half our sales.
These stores are delivering a step change in performance with
higher sales growth and strong investment returns, whilst
attracting new customers to the higher grocery mix, wider breadth
of product choice and own label value proposition. The Board
remains confident in our strategy as we position ourselves for
sustained profitable growth in the coming years.
Preliminary Results for the 52-week period ended 28 November
2021 are expected to be announced in late March 2022. The reporting
date will be communicated in due course.
Analyst and Investor Presentation
A presentation will be held for analysts and investors today at
8.30am (GMT) to provide greater insight into the performance of the
Morrisons Daily format and to give more detail on the supply chain
disruption experienced during the year. All presentation materials
will be available on our website. A webcast of the presentation
will be available via the following link:
www.incommuk.com/customers/online
Access Code: 374565
1. Like-for-like sales are on a 52-week vs 52-week basis. LFLs
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.
Enquiries
For further information please contact:
Analysts & 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 community 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.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
LEI: 213800R1TLR536P8YJ67
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END
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