Mccoll's Share News (MCLS)

(Alliance News) - Newsagent McColl's Retail Group PLC on Tuesday said there is more work to do to improve performance after an encouraging first half.

For the 26 weeks to May 26, revenue climbed 0.1% to GBP611.1 million, but did climb 1.0% on a like-for-like basis.

However, pretax profit declined to GBP213,000 from GBP2.3 million, with the adjusted figure down to GBP490,000 from GBP3.4 million.

The adjusted gross margin declined due to higher costs, after a new wholesale supply contract was signed, as well as a stronger tobacco mix and falling sales in some higher margin lines due to poor weather in the period.

McColl's, which owns shops such as Martins, managed to reduce debt by 20% to GBP89.7 million. The interim dividend has been cut to 1.3 pence from 3.4p.

Chief Executive Jonathan Miller said: "The key priorities we outlined for this year were to stabilise the business and to refocus on retail execution following a challenging 2018. We have made good progress on both of these fronts whilst also maintaining strong capital discipline, reducing debt whilst sustaining appropriate levels of investment.

"I am encouraged by the performance we have delivered as we regain greater operational stability, but we still have more work to do in the second half of the year. The market remains highly competitive, with challenging trading conditions, given the unseasonable weather and uncertain economic climate."

"Despite this, we expect to be broadly in line with expectations for the full year and we are confident that our strategy, combined with the cash generative and profitable nature of our business, will deliver sustainable returns for shareholders in the long term," Miller continued.

Shares were 1.6% lower on Tuesday morning at 68.90 pence each. A year ago, they were at 181.00p, and did reach 295.00p in September 2017.