18th Feb 2019 08:55
LONDON (Alliance News) - McColl's Retail Group PLC on Monday reported a steep fall in its annual profit driven by lower sales and higher costs, prompting the convenience store chain to slash its annual payout in half.
For the year ended November 25, McColl's posted pretax profit of GBP7.9 million, down from GBP18.4 million a year ago.
Revenue increased by 8.1% year-on-year to GBP1.24 billion from GBP1.15 billion.
Like-for-like sales were down 1.4%, hurt by supply chain disruption. Sales improved since the end of the financial year, however, up 1.2% in the period to date.
Administrative expenses were up 9.6%, while finance costs surged 19%.
The retailer proposed a 0.6 pence per share final dividend taking its annual payout to 4.0p. This represents a 61% reduction from its 10.3p dividend a year ago.
"2018 was undoubtedly a challenging year, marked by supply chain disruption following [wholesaler] Palmer & Harvey's entry into administration and the accelerated transition to our new supply partner Morrisons," Chief Executive Officer Jonathan Miller said.
He added: "Despite this disruption, we continued to make progress against a number of our key strategic plans. We completed the rollout of 1,300 stores to Morrisons supply in less than nine months, which represents a considerable achievement and provides us with a more secure supply chain and a higher quality chilled and fresh offer."
Looking ahead, McColl's said it is confident in achieving its objectives after experiencing a slight increase in total sales for the year to date, up 0.4%.
The retailer plans to complete between 20 and 30 new convenience store refurbishments during the current year, to increase its neighbourhood presence. It has about 1,550 convenience stores and news agents in total, and it operates about 600 Post Office outlets within its stores.
McColl's said it continues to expect financial 2019 earnings before interest, taxes, depreciation and amortisation to show a "modest improvement" on financial 2018 at adjusted GBP35.0 million.
McColl's shares were trading up 13% to 57.40 pence each early Monday.
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