TIDMMCLS
RNS Number : 1408I
McColl's Retail Group plc
10 December 2020
10 December 2020
McColl's Retail Group plc
FULL YEAR 2020 TRADING UPDATE
Trading update for the 53-week period ended 29 November
2020(1)
Financial highlights
-- Total FY20 revenue up 2.3% to GBP1.25bn (FY19: GBP1.22bn),
reflecting strong demand since the onset of the COVID-19 pandemic,
partly offset by store closures as we make good progress with our
store optimisation programme.
-- Like-for-like (LFL)(2) sales growth for the year of 12.0%
(FY19: 0.0%) driven by a strong performance in BWS, fresh food and
tobacco. LFL sales growth in Q4 of 11.4%.
-- Despite strong demand, a change in shopping behaviour during
the pandemic has resulted in margin pressures due to a change in
product mix. In addition, we have experienced lower services
revenues as well as ongoing COVID-19 related costs. Adjusted EBITDA
pre IFRS 16 is expected to be between GBP29m to GBP30m (FY19:
GBP32.1m). Post IFRS 16, adjusted EBITDA is expected to be
c.GBP58m.
-- Continued progress with debt reduction programme with
year-end net debt position (pre IFRS 16) improved to GBP91.4m
(2019: GBP94.1m), despite delay in head office sale.
Operational highlights
-- Kept all stores trading safely and implemented numerous
initiatives to serve our communities and support key workers.
-- Extended customer offer to meet change in demand and
selectively invested in price of chilled foods, fruit and
vegetables, and milk.
-- Strongest performance delivered through Morrisons Daily
format, with significant LFL sales growth. Reviewing opportunity to
convert further sites in the first half of next year, adding to the
31 trial stores in current operation.
-- Currently migrating the remaining part of our estate to
Morrisons supply, in order to simplify our operations, which is
expected to complete by March 2021.
-- Accelerated store optimisation plans during H2, with 179
stores closed in FY20, in line with our strategy to increase focus
on larger, more profitable, convenience stores.
Jonathan Miller, Chief Executive, said: "As we look towards the
festive period, the safety and well-being of our colleagues and
customers continues to be our number one priority. I am extremely
proud of all of our colleagues who have been working incredibly
hard to keep supplying our neighbourhood communities with the food,
goods and services they need.
"Since the onset of the pandemic, we have seen strong demand
driven by our customer offer and the positioning of our stores in
key neighbourhood locations. At the same time, we have faced
significant COVID-19 related costs and our operating margins have
been reduced by a change in customer behaviour and product mix.
"Despite the challenges of 2020, the pandemic has reinforced our
confidence in our o ngoing strategic change programme. The
importance of neighbourhood stores has never been greater, and we
are well positioned to continue enhancing our convenience offer by
further developing our partnership with Morrisons, and further
improving the quality of our estate and our overall customer
experience."
Update on sale of head office premises
The previously announced sale of our head office premises was
expected to finalise by the end of FY20, but is now expected to
finalise by the end of January 2021. An initial cash payment has
been received, equating to a third of the agreed GBP7.3m sales
price, with the balance due at the end of January 2021. Given the
change in timing we pre-emptively and constructively engaged with
our banking syndicate to ensure that all headroom requirements were
met at the appropriate testing dates.
Outlook
As we enter FY21, we expect LFL revenue growth to moderate and
our sales mix to normalise over the course of the year. We expect
our strategic focus on the larger convenience store format, such as
Morrisons Daily, to drive incremental sales in grocery, fresh food
and BWS in particular, providing opportunities for sales mix
improvement.
To further improve efficiency, we are investing in systems,
processes and space optimisation, alongside the rationalisation of
our store estate. The Board remains confident in our strategy as we
position ourselves for sustained profitable growth in the coming
years.
Preliminary Results for the 53-week period ended 29 November
2020 will be released in March 2021. The reporting date will be
communicated in due course.
1. Throughout this announcement, FY19 figures are for the
52-week period ended 24 November 2019.
2. 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
Please visit www.mccollsplc.co.uk or for further information,
please contact:
Analyst & 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
Notes to editors
McColl's is a leading neighbourhood retailer, with an estate of
around 1,300 managed convenience stores and newsagents. We operate
McColl's 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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December 10, 2020 02:00 ET (07:00 GMT)
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