Annual Report and Accounts 2018

It’s been an incredibly busy couple of years for McColl’s, integrating a major acquisition, launching an extensive refresh programme and transitioning to a new wholesale supply partner, whilst dealing with unprecedented supply chain disruption, which has impacted like-for-like sales and profitability.

£1.24bn

Revenue*
+8.1% 2017

5.9p

Earnings per share
-51.7% 2017

£98.6m

Net debt*
-30.7% 2017

£35.0m

Adjusted EBITDA*
-20.5% 2017

£7.9m

Profit before tax
-57.3% 2017

Annual Report and Accounts 2018

Download the Annual Report & Accounts (pdf)

A year of transition

It’s been a challenging year as the McColl’s team have navigated their way through unprecedented supply chain disruption. Having transitioned 1,300 of our stores to a new wholesale supply partner, the business can now look forward to rebuilding momentum and capitalising on the opportunities that lie ahead.

The start of a new partnership

18 months on from signing our partnership, Morrisons has helped us navigate a supply chain crisis and established a brand new distribution network to supply 1,300 of our stores across the UK.

An exclusive deal bringing Safeway back to the shelves

We have been delighted to bring the Safeway brand back to the shelves. Customers love the freshness and quality of the products and there is a great opportunity to develop the range.

Showcasing a great fresh offer

In 2018 we embarked on our refresh programme following its successful trial. The completely refurbished stores showcase our great fresh and chilled range, as well as our rapidly growing food-to-go offer and are delivering sustained, meaningful sales uplifts.

Competition in the grocery sector remains intense

The grocery sector remains intensely competitive and 2018 has been another year of significant change as businesses look to gain strength and scale through acquisitions, mergers and partnerships.

Three strategic goals

Our three strategic goals are clear and are underpinned by strong business plans aligned to our five key building blocks – brand, customer, stores, colleagues and offer.

Growing convenience offer

Working with our carefully selected supply partners we offer an ever-greater range of products and services to meet the evolving needs of neighbourhoods across the UK.

Excellent customer service

Understanding customers and doing everything that we can to meet their everyday needs is at our core. We strive to build loyalty and strengthen our reputation in the neighbourhoods we serve, by providing a warm and friendly welcome along with a host of services that make the lives of our customers easier.

Increase neighbourhood presence

We will grow our neighbourhood presence by strengthening our brand and acquiring new stores. We will continue to play an important role in supporting the communities we serve.

Getting back on track

In approaching 30 years in the business I have never known a year as challenging as 2018. However, I couldn’t be prouder of the McColl’s team and how we have all pulled together in the midst of unprecedented supply chain disruption. We move into 2019 with a more stable and secure distribution network, and we remain a profitable, cash generative business. As we work to get back on track there are plenty of opportunities to grow.

A focus on strong capital discipline

Our financial performance in 2018 was inevitably impacted by the unprecedented disruption the business faced following the failure of a major supplier and the transition to a new wholesale supply partner. I am delighted to have joined the McColl’s Board at this crucial time for the business. As we begin to recover from a difficult period we are focused on strong capital discipline and careful cost management to enable the business to rebuild momentum and return to sustainable value creation.

*Growth in sales is a ratio that measures year-on-year movement in Group sales for continuing operations for 52 weeks. It shows the annual rate of increase in the Group’s sales and is considered a good indicator of how rapidly the Group’s core business is growing.

Net debt comprises bank and other borrowings, finance lease payables, and net interest receivables/payables, offset by cash and cash equivalents and short-term investments. It is a useful measure of the progress in generating cash and strengthening of the Group’s balance sheet position and is a measure widely used by credit rating agencies.

Adjusted EBITDA: This profit measure shows the Group’s Earnings Before Interest, Tax, Depreciation and Amortisation adjusted for both Property gains and losses and other adjusting items, in order to provide shareholders with a measure of true underlying performance of the business.