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McColl's like-for-like sales head south after Palmer and Harvey enters administration
Neighbourhood retailer McColl's saw total revenue jump 19.1% to £1.13bn in the twelve months leading to 26 November, but disruptions to its supply chain in the wake of wholesaler Palmer and Harvey entering into administration hit sales after the reporting period.
While like-for-like sales rose just 0.1% throughout the 2017 trading year, McColl's reported a 4% increase in pretax profit to £18.4m and posted a 20% improved EBITDA of £44m.
However, the good news from McColl's was both short and sweet.
McColl's, which employs more than 22,000 Britons, said contingency plans put into action ahead of the Palmer and Harvey collapse, such as entering into a new short-term supply contract with Nisa in early December and its new long-term tobacco supply agreement with the UK's fourth-largest supermarket Morrisons, had helped soften some of the blow.
But the damage was already done, the disruption hindered McColl's sales performance for the eleven weeks leading to 11 February, sending like-for-like sales for the period down by 2.2%.
Speaking on the results, 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 £1bn in annual revenues for the first time we have demonstrated that this is now a business of real scale."
"Continuing this momentum, this year we will significantly enhance our customer offer as we transition supply in over 1,300 stores to Morrisons and exclusively launch hundreds of new Safeway branded products at McColl's. We will also further invest and improve the quality of our estate by extending our successful convenience store refresh programme to 100 additional stores this year," Miller added.
As of 1400 GMT, shares had declined 3.07% to 241.35p.