McColl's profits rise as acquisition plan bears fruit

The convenience specialist posted a 3.9% uplift in pre-tax profit up to £18.4m during the year to November 26, 2017, buoyed by a 19.1% increase in total revenues to £1.13bn.

McColl’s credited the sales landmark to the acquisition of 298 shops over the year and said it was in a good position to “deliver sustainable growth in the years ahead”.

Total like-for-likes edged up 0.1%, but in recently acquired and converted stores were ahead 2.4%.

The retailer also updated on the 11-week period to February 11, when the collapse of suppler Palmer & Harvey continued to hit availability.

McColl’s said total like-for-likes in that period fell 2.2%, “held back by sales in our stores formerly supplied by P&H where like-for-like sales were down 3.6%”. However, total sales climbed 26.7%.

The retailer reported: “2018 is a strategically important year for McColl’s as we move to new supply arrangements, and continue to grow and improve the quality of our estate.

“It will be a period of significant transition; however, the actions we are taking will support our strategic objectives and deliver sustainable growth in the years ahead.”

McColl’s chief executive Jonathan Miller said of the last year: “We have delivered a strong financial performance with a step-up in sales and profitability propelled by our acquisition of 298 convenience stores, and by surpassing £1bn in annual revenues for the first time we have demonstrated that this is now a business of real scale.

“Our convenience-led strategy continues to bear fruit, reflected by a sustained improvement in gross margin as we strengthened our product mix and the proportion of convenience stores has grown to 80% of our estate.

“Continuing this momentum, this year we will significantly enhance our customer offer as we transition supply in over 1,300 stores to Morrisons and exclusively launch hundreds of new Safeway-branded products at McColl’s.

“We will also further invest and improve the quality of our estate by extending our successful convenience store refresh programme to 100 additional stores this year.”