McColl's Retail warns on profits, shares tumble

The company said external factors, including the ongoing nationwide shortage of delivery drivers, labour shortages at distribution centres and insufficient supply of key products, have intensified in the fourth quarter.

"While we continue to work collaboratively with our wholesale partner, Morrisons, to lessen the effect of the disruption, we have been unable to fully mitigate the impact to stores, leading to significantly lower revenues than initially anticipated," it said.

As a result, FY21 adjusted earnings before interest, tax, depreciation and amortisation pre IFRS 16 are now expected to be between £20m and £22m. This is down from £29m a year earlier.

Chief executive Jonathan Miller said: "It is disappointing to see supply chain issues worsen through the second half, but external factors have not eased, and continue to impact much of the UK economy. We are working collaboratively with our wholesale partner Morrisons to restore in-store product availability as quickly as possible.

"Despite these supply chain issues, I am delighted by the step change we are witnessing in store performance from our Morrisons Daily conversions. This new format is showing strong sales growth and is delivering better return on investment than we expected. Our conversion programme is moving at pace, ahead of time and on budget, and we anticipate reaching 350 Morrisons Daily stores well in advance of our original target."

At 0850 GMT, the shares were down 25% at 13.50p.