 has warned that full-year profits will likely be flat after posting a drop in first-half like-for-like sales. ){kind=link}
The McColl’s Retail Group (LON: MCLS) has warned that full-year profits will likely be flat after posting a drop in first-half like-for-like sales.
The group’s first-half like-for-like sales were down following collapse of cigarette wholesaler Palmer & Harvey last year. Shares were down 15 percent on Monday.
“During the first half we experienced unprecedented supply chain disruption following the collapse of P&H last November,” said Jonathan Miller, the Chief Executive Officer in a statement.
“This temporary upheaval has inevitably impacted sales and margin performance in the about 700 stores that were formerly supplied by P&H, and has also had knock-on effects on the rest of the estate,” he added.
The Chief Financial Officer, Simon Fuller, will be leaving the group.
McColl’s like-for-like sales fell 2.7 percent in the 26 weeks ended May 27.
Total revenue rose 19.2 percent to 601.7 million pounds for the 26 weeks ending May 27.
The group entered a new short-term supply contract with Nisa in early December. McColl’s also struck a deal with WM Morrison Supermarkets PLC (LON:MRW) last year which would see Morrisons supply the 1,300 McColl’s stores with tobacco to avoid a repeat of the P&H collapse.
Analysts lowered forecasts of £43.4 million on revenue of £1.23 billion, down from £50.2 million and £1.24 billion previously.
“I am incredibly proud of our team and the extraordinary efforts they have shown in dealing with one of the most challenging six months the business has ever faced,” said chief executive Jonathan Miller.
“During the first half we experienced unprecedented supply chain disruption following the collapse of P&H last November. This temporary upheaval has inevitably impacted sales and margin performance in the c.700 stores that were formerly supplied by P&H, and has also had knock-on effects on the rest of the estate.”
“However, the switch to Morrisons supply in the 1,300 stores intended for this year has been accelerated, and will now be completed in early August, ahead of schedule. At the same time, we have relaunched the Safeway brand at McColl’s, providing our customers with a more competitive and higher quality food offer,” he added.
Shares are trading down 12.43 percent at 183.91 (1008GMT).