Last checked at 
(Alliance News) - McColl's Retail Group on Thursday earmarked plans to raise GBP35 million as it looks to invest in its store estate and boost its Wm Morrison Supermarkets PLC partnership.
In addition, the convenience retailer posted a widened first half loss, as revenue slipped.
McColl's shares tumbled 26% to 21.50 pence each in London on Thursday.
It announced plans to raise GBP35 million through a placing and open offer at 20p per share. McColl's shares had dropped 16% on Monday after it said it was mulling an equity raise.
McColl's on Thursday said it will raise GBP30 million through a non-pre-emptive firm placing of 150.0 million new shares. It will raise an additional GBP5 million through a pre-emptive open offer of up to 25.0 million shares.
The cash will go towards accelerating the speed of the Morrisons Daily store format rollout. McColl's now expects 350 stores to be converted to Morrisons Daily by the financial year ending November 2022, ahead of its previous target of 300.
It also plans to "improve the grocery infrastructure in the Morrisons Daily sites" and "further invest in the store estate", potentially extending its pact with Morrisons to beyond 350 stores.
Proceeds of the placing will also go towards reducing leverage.
"We are delighted with the progress we have made so far with the roll-out of Morrisons Daily conversions within our store estate. We have a supermarket-quality offer and now also a proven blueprint that offers a strong return on investment, delivering double-digit sales uplifts and fast payback," McColl's Chief Executive Jonathan Miller said.
In addition, McColl's on Thursday said its pretax loss in the six months to May 30 widened annually to GBP5.9 million from GBP1.3 million. Revenue was 5.3% lower year-on-year at GBP572.7 million from GBP604.8 million.
During the period, 25 more stores were converted to Morrisons Daily formats.
Miller added: "Many of the changes in consumer behaviour we have seen since the onset of the pandemic have continued in 2021, with customers spending less on impulse goods, but buying more take-home and multipack products, impacting overall margins. Alongside the impact that the industry-wide shortage of delivery drivers has had on our product availability, we are confident that these temporary trading effects will reverse as restrictions ease and distribution returns to normal.
"Looking ahead, whilst the wider economic outlook remains uncertain, we have clear demand for our grocery-led convenience offer, and our focus in the second half will firmly be on the continued roll-out of the Morrisons Daily stores, to help drive sustainable, profitable growth over the medium term."
Like the first half of the last financial year, McColl's decided against an interim dividend.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
