McColl’s sales and profits hit by supply chain disruption
McColl’s saw its total revenue decline by 11.2% to £1.11 billion in the year to 28 November after it faced supply chain disruption in its second half.
On a one-year basis, like-for-like sales fell by 3.3%, but rose by 9.1% on 2019.
Subscribe to TRBJonathan Miller, McColl’s chief executive, said: “FY21 has undoubtedly been a tough year for the business, starting with the impact of Covid-19 restrictions and ending with the widely reported and ongoing supply chain challenges. Although we have been able to partly mitigate these external factors, they have still had a significant impact on underlying trading.”
The convenience chain is expecting adjusted EBITDA pre IFRS 16 to come in at between £20 million and £22 million. This will be down from £29.1 million in the prior year. Post IFRS 16, adjusted EBITDA is forecast to be between £46 million and £48 million compared to £57.9 million a year earlier.
During the period, the retailer launched format, space and range changes across 30% of McColl’s estate. It also completed 154 conversions to Morrisons Daily stores to take the total to 185 at the year end, which was ahead of expectations. The retailer has now increased its target of Morrisons Daily conversions from 350 to 450 stores by the end of the current financial year.
Miller said: “These Morrisons Daily stores are generating strong sales growth and enhanced return on investment. In less than a year’s time we expect over half our revenues to be delivered by this fascia, bringing branded, supermarket-quality convenience to our customers, with material scope to deploy further into our estate.”
McColl’s said its store rationalisation programme is now largely complete with 100 stores divested during the year. This left a total of 1,165 stores at the year end.
