The recent collapse of wholesaler Palmer & Harvey (P&H) is to blame for the half-year profit warning from convenience chain McColl’s Retail (MCLS). Like-for-like sales fell by 2.7 per cent as a result of supply chain disruption and although bosses expect pressure to ease during the second half, lower gross margins will leave annual cash profits just about in line with last year. News of chief financial officer Simon Fuller’s resignation – to allow for his move to publishing group Reach – only added to the sharp de-rating in the share price in response to these numbers.
Many had anticipated a negative impact on trading through the demise of P&H, but analysts at Liberum have admitted the numbers are “weaker than expected”, particularly as harsh weather in the first quarter acted as an unforeseen drag. Top-line momentum hasn’t picked up at the start of the second half, either, with like-for-like sales trailing by 0.8 per cent over the seven weeks ended 15 July.
Analysts at Liberum have cut cash profit estimates by approximately 14 per cent across FY2018-FY2020, and now expect pre-tax profits of £25.3m for the year ending November 2018, giving EPS of 17.7p, compared to £26.7m and 18.6p in FY2017.
| McCOLL'S (MCLS) | ||||
| ORD PRICE: | 184p | MARKET VALUE: | £211m | |
| TOUCH: | 182-185p | 12-MONTH HIGH: | 301p | LOW: 177p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | * | NET DEBT: | £113m | |
| Half-year to 27 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 505 | 4.5 | 2.8 | 3.4 |
| 2018 | 602 | 2.3 | 1.3 | 3.4 |
| % change | +19 | -48 | -54 | - |
| Ex-div: | 09 Aug | |||
| Payment: | 07 Sep | |||
| *Negative shareholder funds | ||||
