McColl’s warns it will miss profit expectations after ‘challenging year’

Convenience store business McColl’s has warned profits for the year are set to miss forecasts on the back of poor weather and declining consumer confidence.

The retailer said its earnings before tax and interest for the year to November 24 are expected to be £32 million, which it said is “marginally below expectations”.

It said profitability was dented by “softer market conditions” in the second half of the year as it was impacted by poor summer weather and weaker consumer confidence.

Chief executive Jonathan Miller said 2019 was a “challenging year” for the company, after seeing its share value fall by 38% in the past 12 months.

The company said it has seen total revenues slide 1.9% over the full year, driven by the divestment of some sites.

Meanwhile, it said like-for-like sales were flat against the previous year, reflecting an improvement on a 1.4% like-for-like sales decline from 2018.

The firm has also made “progress” in its debt reduction programme, reducing net debt to £94.1 million from £98.6 million a year earlier.

McColl’s said it has also strengthened its leadership team over the year, with the appointment of Robbie Bell as chief financial officer and Robert Crampton as chief commercial officer.

Mr Miller said: “While 2019 has been another challenging year for the business, we have made good progress against our goals of operational stability and good retail execution.

“We are also pleased to confirm that we have continued to reduce net debt, with further progress anticipated due to our ongoing capital discipline.

“The fundamentals of the convenience channel are strong and we remain a resilient, profitable and cash generative business.

“We are confident in our plans to rebuild momentum in 2020 and look forward to providing a fuller strategy update at our preliminary results in February.”

Shares in the company slipped 4.3% to 39.58p in early trading on Tuesday.