Shares in UK-listed retailer McColl’s fell sharply on Monday after the company revealed how the collapse of a major supplier was impacting sales.
McColl´s stock opened around 10% lower on Monday, though went on to recover much of the lost ground. As at 13.00 GMT, the stock was trading around 4% lower on the session.
“Having experienced some availability issues towards the end of FY17 in our c.700 newsagents and smaller convenience stores supplied by Palmer & Harvey (P&H), their entry into administration on 28 November 2017 has led to further disruption during the early part of FY18,” said McColl´s in its annual results on Monday.
Like-for-like sales for the 11-week period ended 11 February 2018 were down 2.2%, with stores formerly supplied by P&H seeing like-for-like sales decline by 3.6%.
This was despite a new short-term supply contract with Nisa that began in early December.
For its 2017 financial year ended on 28 November, McColl´s reported a 19.1% increase in total revenue to £1.13bn, which it claimed was a reflection of the successful integration of 298 convenience stores acquired from Co-op.
The company also cited good progress towards its strategic target of increasing grocery and alcohol sales; up over 40% and representing 32% of total sales versus 27% in 2016.
Overall gross margin rose 60 basis points to 25.7% for the 2017 financial year, helped by an improving product mix.
“We have delivered a strong financial performance with a step-up in sales and profitability propelled by our acquisition of 298 convenience stores, and by surpassing £1bn in annual revenues for the first time we have demonstrated that this is now a business of real scale,” said chief executive Jonathan Miller.