McColl's Q1 impacted by Omicron, recent approach for whole business withdrawn

Convenience shop and newsagent operator McColl's Retail Group revealed on Monday that Covid-19 had weighed on its first-quarter performance and that a recent approach for the whole business had been withdrawn.

McColl's said that while it had seen "a tangible improvement" of product availability in stores so far in 2022, it also experienced a "material step-down in footfall" due to the surge in Covid-19 cases relating to the Omicron variant.

While McColl's noted that demand has since picked up, revenues in the first quarter were now tracking behind expectations.

Despite this, McColl's said it had delivered two-year like-for-like sales growth of 5.9% in the 11 weeks to 13 February, in line with the neighbourhood convenience market, with the group also starting to experience strengthening margins as impulse product sales recover. McColl's also said it had taken further mitigating actions, including a full review of pricing and costs.

However, as a result of "the difficult market conditions" in the first quarter, some of which were expected to continue through the first half, McColl's now expects full-year adjusted underlying earnings to be slightly behind current market expectations, and net debt in the region of £100.0m at the end of 2022.

McColl's also confirmed that it recently received an approach for the whole business, which was subsequently withdrawn, with no further discussions with that party or any other in relation to an offer for the whole business. However, McColl's added that it has also received indications of interest for parts of the business and that it will consider all options.

As of 0905 GMT, McColl's shares had sunk 56.43% to 3.05p.