McColl’s revealed today that it is likely to request the listing of its shares be suspended on 1 June as it will not meet the Financial Conduct Authority’s (FCA) deadline to publish its annual results by the end of May.
The troubled convenience retailer said the delay reflected the need for a conclusion to talks with key stakeholders around a potential financing solution for the business in order to finalise its financial statements covering the year to 28 November 2021.
It added: “As these discussions remain ongoing, the board has concluded there is now insufficient time in order to meet the current deadline for filing these results under the Listing Rules.”
Under stock market rules, listed companies must publish results within six months or risk having shares suspended.
McColl’s has debts of almost £170m and has been in talks with its lenders and its wholesale supplier [Morrisons] for financing to prevent its collapse and secure its long term future. It recently received a takeover approach – which was from forecourt giant EG Group – but discussions ended without an agreement.
In March, McColl’s Chief Executive Jonathan Miller stepped down after the business endured torrid trading conditions and supply chain issues last year that impacted both its revenue and profit.
Last week, McColl’s stated that while a recovery in trading performance had continued during the first half of March, the business had since experienced “softer trading” through the Easter period, impacted by reduced consumer spending and continued supply chain disruption. It added that it was “working closely” with Morrisons to mitigate product availability issues.
As a result of the weaker performance and the impact of cost inflation pressures, McColl’s now expects adjusted EBITDA for its current financial year to be no higher than the level achieved in the previous 12 months. The group has been reviewing costs across all parts of its business to help “mitigate the challenging trading conditions”.
McColl’s warned last month that even if a financing solution is achieved, it was likely to result in little or no value being attributed to the group’s equity. The company shares are now worth less than 1p each, valuing the business at just £2.5m despite operating over 1,100 convenience stores and newsagents.
NAM Implications:
- To place this situation in context :
- How about calculating the incremental sales required if McColl’s fails to secure appropriate funding?
- And given the uncertain times, why not repeat the exercise for each of your major customers?
