Last checked at 8 Apr 2014 07:00
8 April 2014
McColl's Retail Group plc
Interim Management Statement
McColl's Retail Group plc ("McColl's" or the "Group"), a leading neighbourhood retailer operating in the UK convenience and newsagent sectors, announces its interim management statement for the 19 week period from 25 November, 2013 to 6 April, 2014.
STRONG TRADING IN LINE WITH EXPECTATIONS
§ Total sales up 3.0% and like-for-like sales1 up 1.4%.
§ Post IPO refinancing completed, significantly reducing debt levels and debt service costs. Gross bank borrowings reduced from £109.9m to £60.9m.
§ Convenience estate development on-track.
§ Agreement with Post Office offers potential to accelerate growth strategy.
James Lancaster, Chairman and Chief Executive Officer commented:
"We are pleased with how life as a public company has begun. Trading figures remain encouraging and we are making good progress on our strategy to further enhance our position in a rapidly growing convenience market."
Financial Highlights
The Group is pleased to report a positive sales performance during the period, with year on year sales growth of 3.0% and like-for-like[1] sales growth of 1.4%.
On 4 March, 2014 the Group completed its anticipated post IPO debt refinancing creating a sustainable financial structure to support the Group's growth strategy. £60.9m was drawn against the Group's new £85m working capital facility which, together with IPO primary proceeds, was utilised to repay the Group's existing borrowings, including accrued interest, comprising a £49.9m mezzanine loan and a £60.0m senior loan. The initial interest rate on the working capital facility of LIBOR plus 2.5% represents a saving of 2.2% compared to the senior facility it has replaced.
Operational Highlights
The Group continues to execute its strategy to enhance its offering in the convenience sector through store conversions and acquisitions, improving and extending its product range and widening its service offering.
In line with its plans for the period, the Group acquired 10 new Premium Convenience stores and converted a further 93 Standard Convenience stores into Premium Convenience Stores by adding a wider range of groceries, particularly chilled and fresh foods. The Group also converted 11 Newsagent stores to Food and Wine stores, adding a focused range of grocery and alcohol to these shops. 4 stores were closed during the period as part of the Group's strategy to remove underperforming stores from its portfolio. McColl's now has a total of 725 Convenience stores representing 56% of the Group's total store base of 1,279.
In addition to its ongoing store development strategy, McColl's has the potential to acquire up to a further 30 additional Convenience stores and/or to fund the conversion of a substantial number of Newsagents to Food and Wine stores, by using the net proceeds received under a new agreement with the Post Office. Under this agreement the Group will complete 191 local style post office conversions during 2014.
Outlook
The Group has made a good start as a public company, following the successful Initial Public Offering in February 2014. The convenience market fundamentals remain very positive and the Board is confident that the Group's growth strategy in convenience is on-track and that the benefits of the acceleration in development will come through in the near future.
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Please visit www.mccolls.co.uk or for further information, please contact:
McColl's Retail Group plc + 44 (0)1277 372 916
James Lancaster, Executive Chairman and Chief Executive Officer
Jonathan Miller, Chief Financial Officer
Martyn Aguss, Chief Operating Officer
Media Enquiries +44 (0)20 7404 5959
Brunswick
Simon Sporborg
Alison Kay
Cerith Evans
[1] Like-for-like sales reflect sales from stores that have traded throughout the current and prior financial periods, and sales include VAT but exclude sales of fuel, lottery and mobile phone top-up.