Convenience store chain McColl’s has seen its shares slide 54 per cent after it confirmed it is seeking a capital injection to stave off collapse.
McColl’s, which owns a string of 1,100 managed convenience stores and newsagents, said it continues to receive credit support from its key commercial partners as it tries to secure a long-term agreement with lending banks. The firm also confirmed that it had received a takeover approach for the whole business which was later withdrawn.
Despite raising £30m from a placing and open offer in September 2021 annual revenue for the company dropped by 11 per cent to £1.1bn in the latest financial year. Net debt increased from £89.6m at the close of 2020 to £97m for the year that ended 28 November 2021.
“Since the start of the new financial year, there has been a tangible improvement of product availability in stores,” McColl’s commented in a statement.
“However, the business saw a material step-down in footfall due to the surge in COVID-19 cases relating to Omicron, particularly over the Christmas period, impacting trading. While demand has since picked up, revenues in the first quarter are behind expectations,” the statement continued.
McColl’s has reached a deal with supermarket chain Morrisons and has rolled out Daily stores at over 200 stores. The struggling convenience store owner plans to complete 450 Morrisons Daily store conversions by the end of 2022 in order to reshape the business into a more profitable and sustainable model.