McColl’s profits down amid ‘softer market’ conditions

Convenience retailer McColl’s has reported a 1.8% decrease in revenues to £1.22bn, attributing store closures and “softer” market conditions to its loss.

In its preliminary audited results and trading update for the year ended 24 November 2019 and its trading update for the 11 weeks to 9 February 2020, the retailer reported flat total like-for-like sales at 0.0% compared with 1.4% in 2018, whilst adjusted pre-tax profit decreased from £10.5m to £7.3m.

Meanwhile, the retailer reported £2.9m loss in EBITDA to £21.1m, compared with £35m in 2018 amid “softer market conditions” through summer.

McColl’s also said one-off, non-cash goodwill impairment charge of £98.6m together with other adjusting items leading to statutory loss before tax of £98.6m compared with £7.9m in 2018.

 Although total sales decreased by 4.2%, reflecting the annualisation of the ongoing store optimisation, the retailer also said early sales results for FY20 have been “encouraging”, with the group reporting a 0.5% increase in like-for-like sales for the 11 week period ending 9 February.

Jonathan Miller, chief executive, said: “We have stabilised the business and refocused on retail execution in 2019, in line with our key priorities for the year. Against challenging trading conditions we have made good operational progress, whilst reducing debt and making appropriate levels of investment. 

“Looking ahead to FY20, we are embarking on a strategic change programme, refining our model and better tailoring our offer to the customers and communities we serve, using the learnings to build the foundations for future growth.”

He added: “The fundamentals of the convenience sector remain strong and, with our improving customer proposition, I am confident in delivering sustainable returns for shareholders over the long term.”