3rd Mar 2015 09:02
LONDON (Alliance News) - Newsagent and convenience store chain McColl's Retail Group PLC saw its shares fall Tuesday, despite reporting higher profit and revenue in its last financial year, as the company revealed that like-for-like sales were down 1.2% in the first quarter of its current financial year and said the market remains "competitive and challenging".
McColl's posted a pretax profit of GBP12.6 million for the financial year to end November 2014, compared with a GBP4.4 million profit the year before, supported by a 6.1% increase in revenue to GBP922.4 million, up from GBP869.4 million. Like-for-like sales rose 0.7%.
"Revenues were boosted by the acceleration of our store development activity, with 45 newsagents converted to the food and wine model, and 60 new store acquisitions completed, more than double the 23 acquired last year," the company said in a statement.
Its operating profit, which strips out exceptional costs, including those associated with its initial public offering last year, increased to GBP25.5 million from GBP22.5 million the year before, which it said was buoyed by revenue growth and tight cost control.
"Our results were broadly in line with our targets and expectations, and represented a significant improvement on 2013," the company added.
The company proposed a final dividend of 6.8 pence per share, making a total dividend of 8.5 pence per share for the nine months period since its initial public offering in February 2014.
However, McColl's said that in the 13 weeks to March 1, like-for-like sales, which are from stores open more than a year, were down 1.2%, while total revenue rose 3.8%.
"The market continues to be challenging and competitive, but full of opportunities too. We will continue to grow our convenience store business as we head towards achieving our target of 1,000 stores by the end of 2016. At the same time we will continue to look for ways to expand and extend the range of products and services we provide our customers," said Chief Executive James Lancaster in the company's statement.
McColl's shares were trading 7.1% lower Tuesday morning at 158.00 pence, having fallen as much as 10% in early trading.
The group said it reduced its net debt by more than half during the year to end-November to GBP37.4 million and increased its net capital expenditure to GBP19.3 million, from GBP10.6 million on 2013.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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