McColl's grows full year sales and profit
The McColl’s newsagent and convenience chain has grown both its full year sales and profit after passing the £1 billion revenue mark for the first time.
In the year to 26 November, total revenue climbed by 19.1% to £1.13 billion following the successful integration of 298 former Co-op convenience stores. Pre-tax profit increased to £18.4 million from £17.7 million in the previous year.
Meanwhile, total like-for-like sales edged up by 0.1%. Like-for-like sales in recently acquired and converted stores rose by 2.4%
Jonathan Miller, McColl’s chief executive, said: "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 £1 billion 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.”
Following the collapse of Palmer & Harvey, McColl’s entered into a new short-term supply contract with Nisa on 4 December to cover the stores previously supplied by the wholesaler.
It also began a new supply partnership with Morrisons earlier than previously scheduled to supply the same stores with tobacco. This followed the signing of a long-term supply agreement with Morrisons last August which is expected to replace McColl’s existing supply arrangements in time.
Giving an update on more recent trading, McColl's said: “Whilst these contingency agreements have largely ensured continuity of supply, we continue to closely manage distribution to these stores and the disruption has impacted our sales performance. Total like-for-like sales for the 11-week period ended 11 February 2018 were down 2.2%, held back by sales in our stores formerly supplied by Palmer & Harvey where like-for-like sales were down 3.6%. However, total sales continued to perform strongly, up 26.7%.”
In January, McColl’s launched its new Safeway range of around 400 products in 102 stores as part of a phased rollout. The company said it was pleased with the reaction from customers.
This year McColl’s plans to complete a further 100 convenience store refurbishments as part of its store refresh programme. It is also looking to acquire around 20 new convenience stores.
The company said: “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.”
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