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LONDON (Alliance News) - McColl's Retail Group PLC Tuesday said total sales were up 3% on the year over the last 19 weeks, as it continued buying up new stores, closing unprofitable ones, and converting others to "premium" stores by adding more groceries, particularly chilled and fresh foods.
The newsagent and convenience store operator listed at the end of February, raising new funds that helped it reduce its debts by nearly half. It operates in one of the fast growing parts of the UK retail sector, but one that is being increasingly dominated by the large supermarket groups like Tesco PLC and J Sainsbury PLC.
The company said sales were up 3.0% in the 19 weeks to April 6, driven by convenience store acquisitions and conversions. Like-for-like sales were up 1.4%.
McColl's now trades from a total of 725 convenience stores, representing 56% of its total store base of 1,279, after it acquired 10 new "premium" convenience stores during the period. It also converted a further 93 standard convenience stores into premium convenience stores by adding a wider range of groceries, particularly chilled and fresh foods.
It also converted 11 newsagent stores to food and wine stores, by adding a focused range of grocery and alcohol. It also closed four underperforming stores during the period.
During the period, the group completed its post IPO debt refinancing, which it said has significantly reduced its debt levels and debt service costs. It said it has reduced its gross banking borrowing to GBP60.9 million, down from GBP109.9 million.
Its plans for 2014 are to increase its premium convenience store portfolio further, by converting existing standard convenience stores and through targeting acquisitions of independent convenience stores.
McColl's also has an agreement with the Post Office. A third of McColl's stores have a Post Office, according to its website.
It said that under the deal, it has the potential to acquire up to 30 additional convenience stores, and, or to fund the conversion of a substantial number of newsagents to food and wine stores, by using the net proceeds from a new agreement with the Post Office.
"The convenience market fundamentals remain very positive and the board is confident that the group's growth strategy in convenience is on-track and that the benefits of the acceleration in development will come through in the near future," the firm said in a statement.
McColl's shares were trading 0.6% higher at 176.00 pence per share Tuesday morning.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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