Convenience store chain McColl’s today cut its profit forecast for the year, sending its shares tumbling more than 20 per cent.
McColl’s cut its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) for the 2018 financial year to £35m, down from a previous estimate of £44m.
The business blamed the profit cut on disruption caused by the collapse of wholesaler Palmer & Harvey.
“Following the collapse of Palmer & Harvey, we have experienced significant supply chain disruption and have needed to accelerate the rollout of Morrisons supply to 1,300 of our stores.
“The speed of this transition has created significant challenges and severely disrupted our plans for the launch of Safeway,” the retailer said.
Chief executive Jonathan Miller said: “2018 has been a very difficult year for the business, marked by unprecedented supply chain disruption and ongoing challenges.”
McColl's said its year-end net debt was materially lower than expected at around £100m.
It said managing cost pressures will “continue to be critical,” with the most significant being the increase in the national living wage.
McColl’s said it expects “continued uncertainty for consumers which will require us to demonstrate further competitive retail pricing”.
It said as a result of this it expects profits in the 2019 financial year to be no more than a modest improvement on 2018.