Convenience retailer McColls profits before tax dropped from £18.4m to £7.9m in the 52 weeks to 25 November 2018, impacted by the administration of wholesaler Palmer and Harvey.
The wholesaler worked with 90,000 retailers in the UK before it collapsed in November 2017 with debts of £65m.
McColls’ total revenue was up 8.1% to £1.24bn compared with the previous year’s figure of £1.15bn, reflecting its 2017 acquisition of 298 Co-op stores. Like-for-like sales were down 1.4%, but the company said it was seeing an improvement with Q4 FY18 sales remaining flat while Q1 FY19 is up 1.2% to date.
The group reduced its net debt to £98.6m compared with £142.2m dues in 2017.
In August, McColls completed a contract to supply 1,300 Morrisons stores and it added 11 outlets to its portfolio.
Jonathan Miller, chief executive, said: “2018 was undoubtedly a challenging year, marked by supply chain disruption following Palmer and Harvey’s entry into administration and the accelerated transition to our new supply partner Morrisons.
“Despite this disruption, we continued to make progress against a number of our key strategic plans. We completed the rollout of 1,300 stores to Morrisons supply in less than nine months, which represents a considerable achievement and provides us with a more secure supply chain and a higher quality chilled and fresh offer. We also continued to invest in our estate, with 59 convenience store refreshes completed in the year and 11 new stores acquired.”
He added: “We are a profitable and cash generative business, and our priority for the year ahead is to rebuild operational momentum and we remain confident in delivering our strategic plans.”