McColl's profits impacted by Co-op stores acquisition
Convenience chain operator McColl’s has reported a fall in pre-tax profit in the first half of its financial year after it incurred costs relating to its acquisition of 298 stores from the Co-operative Group.
In the six months to 28 May, pre-tax profit declined to £4.5 million from £8.2 million in the previous year after taking account of exceptional costs of £2.3 million and pre-opening costs of £1.3 million.
Total revenue rose by 7.6% to £504.8 million as the company benefited from the addition of the Co-op stores, around two thirds of which were trading at the end of the period.
Meanwhile, like-for-like sales edged up 0.2% following a 1.4% uplift in the second quarter.
Adjusted EBITDA increased to £16.5 million from £16 million a year earlier.
Jonathan Miller, McColl’s chief executive, said: "I am encouraged by the performance we have delivered over the first half of the year as our business has continued to gain momentum. We have traded well in a challenging environment and also benefited from the recent hot weather, which has helped to drive sales in key growth categories including grocery and alcohol.”
McColl’s said the remaining Co-op stores will all be trading by the end of July. Like-for-like sales in the recently acquired and converted stores increased by 2.8% in the period.
Miller added: “With all 298 stores now on board, they are expected to make a material contribution to sales and profit in the second half of the year and beyond.”
The company said its full year results are forecasted to be in line with management's expectations.
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