McColl’s plans to expand Morrisons Daily format rapidly after mixed financial results

In order to finance that expansion the convenience store group said it was issuing shares in a bid to raise £35m.

It has already conditionally placed £30m worth of shares.

Despite the bullish move, McColl’s shares have fallen sharply after its latest results.

The share price this morning was hovering at around 20p down from 28p yesterday morning (12 August).

In the half year to 30 May turnover fell 5.3% to £572.7m, mainly due to store closures, but like-for-like sales inched up 1% for the period as more customers shopped locally during lockdown.

McColl’s also reported an adjusted EBITDA decline of 13.2% to £24.3m, attributed to ongoing Covid-19 related costs and lower gross profit.

Despite the falls, chief executive Jonathan Miller described the results as resilient. He said: “Many of the changes in consumer behaviour we have seen since the onset of the pandemic have continued in 2021, with customers spending less on impulse goods, but buying more take-home and multipack products, impacting overall margins.

“Alongside the impact that the industry-wide shortage of delivery drivers has had on our product availability, we are confident that these temporary trading effects will reverse as restrictions ease and distribution returns to normal.”

But the company also warned that any improvement was dependent upon nationwide delivery problems being successfully addressed.

Its interim statement said: “If these challenges to trading do not materially improve in the second half of the financial year, the performance in the full year is likely to fall short of management expectations.”