Trading Update

RNS Number : 4613H

McColl's Retail Group plc

01 December 2015

 

1 December 2015

McColl's Retail Group plc

Trading Update

McColl's Retail Group plc ("McColl's" or "the group") today announces its trading update for the 13 and 52 week periods ended 29 November 2015.

Good strategic progress and a solid final quarter

·     Good growth in total sales up 2.7% for the quarter and 3.1% for the year to date¹.

·     Fourth quarter like-for-like² (LFL) sales down 1.8%, a 0.5% improvement on the prior quarter.

·     Full year LFL sales down 1.9%:

o  LFL sales in premium convenience and food and wine slightly down by 0.6%.

o  LFL sales in standard convenience and newsagents down by 4.0%.

·     Convenience store expansion strategy delivered in line with plan for the year:

o  On track to achieve target of 1,000 convenience stores by end of 2016.

o  60 new convenience stores acquired and 45 food and wine conversions completed, taking the total number of convenience stores to 893.

o  Food to go offer enhanced in 148 stores and first Subway franchise now open.

o  Alcohol introduced to 100 newsagents.

·     Post office services continue to grow:

o  520 post offices in-store.

o  72 new post offices acquired.

o  A further 23 existing post offices converted to the new models.

James Lancaster, chief executive commented:

"I am delighted to report significant progress on our strategic initiatives for the financial year, continuing our expansion into convenience and capturing further market share. Whilst the sector continues to be challenging, total company like-for-like sales improved in the quarter, and have held up well in our developed convenience stores over the course of the year. We therefore expect results to be in line with the board's expectations for the year."

Financial highlights

Total group sales grew by 2.7% in the 13 week period to 29 November 2015 relative to the comparable period in the prior year, driven by new store acquisitions. LFL sales were down 1.8% for the quarter, although this was an improvement on the 2.3% fall experienced in the third quarter.  For the full year LFL sales were down 1.9% against the comparable 52 week period. Performance in the premium convenience and food and wine estate held up well at only 0.6% down for the year, once again validating the group's strategy of focussing on the convenience sector.

Strategic and operational overview

The group continues to deliver its strategic objective of enhancing its offering in the convenience sector through store conversions and acquisitions, improving and extending its product range and widening the choice of services provided.

In line with its plans for the year, the group acquired 60 convenience stores and converted 45 newsagents to the food and wine format, further extending its convenience offer. The group now operates 893 convenience stores representing two thirds of the group's total store base of 1,352, and remains on track to achieve the target of 1,000 convenience stores by the end of 2016.

The group also made good progress in expanding its food to go offer this year, through the introduction of coffee and snacking modules in 115 stores and the installation of 33 full food to go modules. McColl's also opened its first Subway franchise during the quarter, in an existing petrol forecourt site in Tamworth, with encouraging early results.

This year 100 of the group's newsagents had alcohol added to expand the range on offer. In the final quarter, following a review of its portfolio of stores, the group decided to sell approximately 100 of its other newsagents which no longer fit with its long term plans. The divestment is expected to be earnings neutral in 2016, and the funds generated will be used to invest further in convenience.

During the year, the group also reviewed opportunities to improve efficiency and reduce costs resulting in restructuring some support services within head office and field operations.

¹ Excludes the impact of the extra week's trading in quarter 4 2014.

² Like-for-like sales reflect sales from stores that have traded throughout the current and prior periods and sales include VAT but exclude sales of fuel, lottery, mobile phone top-up and gift cards.

-ENDS-

Please visit www.mccolls.co.uk or for further information please contact:

McColl's Retail Group plc	[phone]
James Lancaster, Chief executive
Jonathan Miller, Chief financial officer
Dave Thomas, Chief operating officer
Media Enquiries
Brunswick	[phone]
Anita Scott
Cerith Evans

 

END

 

 

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