The supermarket price war is affecting retailers of all shapes and sizes. Interim results from convenience chain McColl's (MCLS) show a 1.9 per cent fall in like-for-like sales during the first six months of the financial year, following significant price deflation on categories such as newspapers and tobacco. The second quarter was particularly challenging, with like-for-like sales down 2.5 per cent.
But chief executive James Lancaster is keen to differentiate the performance of McColl's newsagents from its premium food and wine stores. The former reported a 4.7 per cent drop in like-for-like sales during the period, while the latter managed to keep like-for-like sales flat. Mr Lancaster said this emphasised the importance of McColl's strategy of converting more of its newsagents into premium convenience outlets.
Mr Lancaster also believes the introduction of a new national living wage could bring industry price wars to an end. "We fully support it, but we'll all have to offset rising costs coming through the supply chain," he told the IC.
Brokerage Numis expects pre-tax profits of £21.3m for the current financial year, giving EPS of 15.8p. That's up from £17.9m and 13.4p for the year ended November 2014.
| MCCOLL'S (MCLS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 162p | MARKET VALUE: | £170m | |
| TOUCH: | 160-168p | 12-MONTH HIGH: | 200p | LOW: 153p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 112p* | NET DEBT: | 40% | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 444 | -4.0 | -4.1 | 1.7 |
| 2015 | 459 | 7.6 | 5.6 | 3.4 |
| % change | +3 | - | - | +100 |
Ex-div: 6 Aug Payment: 4 Sep *Includes intangible assets of £142m, or 135p a share | ||||
