Convenience store group McColl’s maintained it is optimistic about finding a “financing solution” to its problems following speculation that it was battling to stave off administration.
McColl’s also said it had received potential buyer interest – subsequently withdrawn – and that profits would be “slightly behind” expectations after trade was hit by the Omicron Covid-19 variant.
McColl’s issued an update on financing and performance after Sky News reported at the weekend that it was racing to find new sources of funding or a buyer.
The retailer said it “remains in ongoing discussions with its lending banks… towards a longer-term agreement in relation to the balance of the facility [and] continues to believe that a financing solution will be found that involves its existing partners and stakeholders”.
McColl’s, which has been converting eponymous stores to the better-performing Morrisons Daily format in partnership with the supermarket group, said while it hoped for a financing solution, “there are also other options available”.
McColls said it had recently received an approach for the business but it had subsequently been withdrawn “and there are no further discussions with that party or any other party in relation to an offer for the whole business”. However, it “has also received indications of interest for parts of the business”.
McColl’s said: “Since the start of the new financial year, there has been a tangible improvement of product availability in stores. However, the business saw a material step-down in footfall due to the surge in Covid-19 cases relating to Omicron, particularly over the Christmas period, impacting trading. While demand has since picked up, revenues in the first quarter are behind expectations.”
Full-year earnings will be “slightly behind” expectations, it added.
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