McColl’s Retail (MCLS)

McColl’s Retail MCLS Logo

Convenience retailer.

4-Dec-2017 – 290p – £334.0m – PER 13.0

Trading Update For The 13 and 52 Week Periods To 26 November 2017 – Revenue up 28.9% in Q4 and 19.1% for the full year following the successful integration of 298 acquired convenience stores (completed in mid-July). LFL sales are however – Flat. Expecting full year to be in-line with managements expectations.

Still quite like this but can’t quite decide to take the plunge. I feel I may be missing out on a decent growth opportunity but on the other hand, it could all, perhaps, go wrong. The Net Debt (£106m on Stockopedia) of 30% of Mkt Cap and sub industry average Operating Margin leaves me on the fence.

19-Feb-2018 – 249p – £286.8m – PER 11.6

Preliminary Results For The 12 Months To 26 November 2017 And A Trading Update For The 11 Weeks Since Then – Revenue up 19.1% to £1.13bn (2016: £950.4m) following successful integration of 298 convenience stores (completed in mid-July 2017), LFL Revenue up 0.1%, Gross margin up 60 basis points to 25.7% (2016: 25.1%), PBT of £18.4m (2016: £17.7m). EPS of 18.3p (2016: 16.0p) and the Final Dividend is up just 0.1p to 6.9p. Supply issues (with Palmer & Harvey) are being addressed, 11 week LFL Revenue down 2.2% but total Revenue is up a healthy 26.7%.

The Net Debt (£142.2m now) of 50% of Mkt Cap and sub industry average Operating Margin is enough to put me off now.

23-Jul-2018 – 210p – £241.9m – PER 9.52

Interim Results For The 26 Weeks To 27th May 2018 – Revenue up 19.2% (to £601.7m) but down 2.7% LFL. PBT £2.3m (2017: £4.5m), Basic EPS 1.3p (2017: 2.8p) with the Interim Dividend maintained at 3.4p (2017: 3.4p).

The Net Debt remains high at 50% or so of Mkt Cap and sub industry average Operating Margin still put me off. I remember watching the rise of McColl’s last year wondering what I had missed, watching it’s slow but steady fall this year, I am not quite sure it’s ready to stop just yet – I remain on the side-lines.

4-Sep-2018 – 143.25p – £165.0m – PER 8.83

2018 Q3 Trading Update – LFL Revenue down -0.9% but total Revenue is up 12.0% YTD (the integration of the 298 stores acquired in 2017 annualised during the quarter).

This seems to be in-line with expectations but with no mention of Profit anywhere I see no reason to change from a Neutral stance here at present.

3-Dec-2018 – 118.75p – £136.8m – PER 7.11

Q4 And FY Trading Update – Revenue down -0.5% in Q4 (FY up 8.3%), Net Debt materially lower than expected at around £100m but, “in light of transitional challenges and continued difficult trading conditions, adjusted EBITDA for FY18 now expected to be around £35m”.

Not sure what EBITDA was supposed to be but this wording suggests it will be worse than expected. There’s still no investment case here for me at present.

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