McColl’s Retail has posted higher first half profits, although underlying sales continued to fall amid the competitive trading conditions.
During the 26 weeks to 29 May, the group’s pre-tax profit was up 8.1% to £8.2m, whilst operating profit before exceptional items was unchanged at £9.6m.
Overall like-for-like (LFL) sales were down 2.2% with contrasting performance across the business. LFL sales in recently acquired and converted stores were up 1.0%, whilst sales in its premium convenience and food and wine stores fell 1.5%. Meanwhile, LFL sales in newsagents and standard convenience stores were down 3.7% as a result of “continued pressure on traditional categories”.
The group added that investment in its food-to-go offer continued to deliver strong sales with LFL performance ahead by 11.4%. It now has five Subway outlets operating within its store estate with plans for a further six to be opened by the year end.
24 new convenience stores were acquired during the period with a further 19 newsagents converted to food and wine stores. At the period end, the group operated 933 convenience stores and 433 newsagents with it on target to achieve 1,000 convenience stores by the end of 2016.
Earlier this month, McColl’s agreed a £117m deal to acquire of 298 c-stores from the Co-op Group. The stores will begin transitioning over at the beginning of next year.
Jonathan Miller, chief executive, said: “I am pleased to report marked strategic progress and a robust financial performance in what has been another challenging period for the sector.”
He added: We are committed to enhancing our convenience proposition through growing market share, developing our product ranges and delivering great customer service. I am especially pleased that we have been successful in the transformational acquisition of 298 Co-operative stores. This is a pivotal moment for the business and allows us to accelerate our growth ambitions and considerably increase our neighbourhood presence.”