McColl’s issues profit warning amid fundraising quest

McColl’s shares fell nearly 60% to a record high on Monday as the British retailer issued a profit warning and said it was considering new funding options after an unnamed party withdrew its company takeover approach.

The convenience store chain said it was not in talks with any party regarding a full takeover, but was reviewing indications of interest in parts of its business.

Profit Warning

McColl’s said its adjusted core profit for fiscal 2022 will now fall “slightly” below current market expectations after a weak first quarter in which an increase in Omicron cases hurt store footfall in Great Britain. -Brittany.

McColl’s shares were last down around 58% to 3 pence on the London Stock Exchange at 0855 GMT. The company’s market value at current prices was £8.3 million.

The company, which has been negotiating with lenders since last year, said it was in talks with banks for a longer-term deal to secure more funding.

The Brentwood, UK-based retailer said it expects net debt of around £100m at the end of financial year 2022, up from £97m at the end of 2022. the previous year.

Financing solutions

“The group continues to believe that a funding solution will be found involving its existing partners and stakeholders,” McColl’s said in a statement.

The company, which operates more than 1,100 convenience stores, did not name the party that made the takeover approach.

Service station operator EG Group is believed to have expressed interest in the business, but decided not to make a bid, a Sky News report said citing sources familiar with the process.

Morrisons is also closely monitoring McColl’s situation, with a view to possibly acquiring hundreds of its stores out of insolvency, the report notes.

Read more: McColl’s to expand Morrisons Daily format

McColl’s works with advisors to find a buyer or parties to inject new capital into the business, Sky News reported Saturday.

The company said on Monday that product availability in its stores, hit by supply chain issues affecting many UK businesses, had improved since the start of the new financial year.

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