Retail

McColl's Warns Short-Term Funding Unlikely To Benefit Shares

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McColl's warned on Monday it was increasingly unlikely that its ordinary shares would benefit from a potential financing that might help resolve its short-term funding issues, sending shares of the British convenience store chain down 42%.

The cash-strapped firm, which is still in talks with lenders and banks to secure more funding, forecast tepid annual core profit due to lower consumer spending and supply snags.

British retailers are battling a series of challenges, including a cost-of-living squeeze, supply snags, higher costs, and inflation hitting its highest levels since 1992.

In February, the convenience retailer McColl's issued a profit warning and said it was looking at new funding options after an unnamed party withdrew its takeover approach to buy the company.

Outlook

The company said it does not expect its annual adjusted core profit to exceed last year's £20 million pounds ($25.47 million).

London-listed McColl's expects to delay the publication of its full-year results until the financing talks are resolved.

Its convenience store partner Morrisons said last month it is considering options to deal with the financial struggles of McColl's, according to a Sky News report.

The company, which operates more than 1,100 convenience stores, said it was in talks with its wholesale partners to mitigate the product availability issues as shortages of its key products intensified last year.

Last month, it announced that its chief executive officer and board member, Jonathan Miller, has stepped down and added that the search for a new CEO was in progress.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.
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