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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mccoll's Retail Group Plc | LSE:MCLS | London | Ordinary Share | GB00BJ3VW957 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMMCLS
RNS Number : 8210L
McColl's Retail Group plc
24 July 2017
24 July 2017 - McColl's Retail Group plc, one of the UK's leading convenience retailers, ("McColl's" or "the Group") today announces its Interim Results for the 26 week period ended 28 May 2017.
GAINING MOMENTUM, WITH SUCCESSFUL INTEGRATION OF 298(1) NEW CONVENIENCE STORES AND STRONG SALES GROWTH
Financial highlights:
-- Total revenue up 7.6% to GBP504.8m (2016: GBP469.2m) benefitting from the on-boarding of stores acquired from the Co-op, around two thirds of which were trading at the half year and all by the end of July
-- Like-for-like (LFL) sales(2) up 0.2% in H1; LFL sales up 1.4% in Q2, in part supported by favourable weather and our evolving mix of growth products
-- LFL performance in recently acquired and converted stores(3) up 2.8% in H1; 3.8% in Q2 -- Gross margin improvement trend continues, up 90 basis points to 25.4% (2016: 24.5%)
-- Adjusted EBITDA(4) increased to GBP16.5m (2016: GBP16.0m), despite being impacted by GBP1.3m pre-opening costs relating to the acquisition
-- Profit before tax, impacted by GBP2.3m exceptional costs(5) and GBP1.3m pre-opening costs, was GBP4.5m (2016: GBP8.2m)
-- Basic earnings per share 2.8p (2016: 6.1p); Adjusted earnings per share(6) 5.0p (2016: 6.1p); excluding pre-opening costs stable at 5.9p
-- Net debt GBP110.8m (2016: GBP42.3m). Management remain comfortable that this debt profile is in line with previously described expectations
-- Interim dividend per share maintained at 3.4p (2016: 3.4p)
-- On track to achieve results for the full year in line with management's expectations, including an expected material increase in sales and profits in H2 driven by the acquired stores
Operational and strategic highlights:
1. Increasing neighbourhood presence
-- Successfully integrated 298 quality convenience stores acquired from the Co-op, on time and on budget; early trading performance in line with management's expectations
-- Current store base comprises 1,292 convenience stores and 358 newsagents(7) - an 80% increase in convenience stores since the IPO in 2014, with around 10 single convenience store acquisitions planned for H2
2. Growing convenience offer
-- Wholesale retender in progress, providing an opportunity to grow and develop our customer offer, and leverage our increased scale
-- Continued range development and learning opportunities, particularly for fresh foods - including through the trial of Co-op branded products in 24 stores
-- Following encouraging early performance, convenience store refresh project to be extended to over 20 stores in H2
-- Progress on Subway continues with one further outlet opened in H1, four planned in H2 and a broader plan developed for 2018 and beyond
3. Excellent customer service
-- Gained deeper insight into customer needs and preferences, including new research commissioned with IGD to understand how shoppers value time
-- Latest industry research (2017 him! convenience tracking programme) shows consistently high ratings for McColl's on colleague friendliness and helpfulness, ease of shop and speed of service
-- Plus loyalty card customer base continues to grow, with c.700,000 members and double-digit basket penetration in the acquired stores
Jonathan Miller, Chief Executive, said:
"I am encouraged by the performance we have delivered over the first half of the year as our business has continued to gain momentum. We have traded well in a challenging environment and also benefited from the recent hot weather, which has helped to drive sales in key growth categories including grocery and alcohol.
"We are delighted to have completed the integration of the acquired stores, on time and on budget. We have welcomed over 3,500 new colleagues who have done a great job in supporting customers through the transition, and early trading is in line with our expectations. With all 298 stores now on board, they are expected to make a material contribution to sales and profit in the second half of the year and beyond.
"Our focus remains on enhancing our convenience proposition through growing market share, developing our product ranges and delivering excellent customer service.
"As the wider convenience and wholesale sector evolves and continues to grow, McColl's is in a strong position to benefit. We remain confident that our standing as a leading neighbourhood retailer will allow us to continue to achieve further progress against our strategy and deliver sustainable returns for shareholders."
The business uses a number of non-statutory measures (for example, LFL, adjusted EBITDA and adjusted EPS) because management believe that these - placed with equal prominence alongside other statutory measures - help to better explain the underlying performance of the business and its key dynamics. These are kept under continuous review and are defined and used consistently, or explained otherwise.
([1]) All 298 stores acquired from the Co-op were on-boarded by 15 July 2017. Approximately two thirds of these were on-boarded by the end of H1 2017.
(2) Like-for-like sales reflect sales from stores that have traded throughout the current and prior financial periods, and sales include VAT but exclude sales of fuel, lottery, mobile phone top up and travel tickets.
(3) LFL sales in stores acquired or converted between 2015-2016 which have traded for over 12 months.
(4) Adjusted EBITDA (defined in note 5) is stated before exceptional items and property gains and losses.
(5) Current year exceptional costs relate to professional fees and write-off of historical banking fees resulting from the acquisition of 298 Co-op stores and associated refinancing (see note 4).
(6) Adjusted earnings per share is stated before exceptional items. Details of the calculation of earnings per share can be found in note 8.
(7) Store numbers as at 15 July 2017.
Results presentation
A copy of this announcement is available at http://www.mccolls.co.uk/investor/results-and-presentations.
A meeting for analysts will be held today at 9.30am at Numis Securities, London Stock Exchange, 10 Paternoster Square, London EC4M 7LS. Access will be by invitation only. All presentation materials will be available on our website.
Enquiries
Please visit www.mccolls.co.uk or for further information, please contact:
McColl's Retail Group plc Media enquiries: Jonathan Miller, Chief Executive Headland
Simon Fuller, Chief Financial Officer Lucy Legh, Simon Burton, Ewa Lewszyk
Naomi Kissman, Head of Investor Relations +44 (0)20 3805 4822
+44 (0)1277 372916
Notes to editors
McColl's is a leading neighbourhood retailer in the independent managed sector running 1,650 convenience stores and newsagents. We operate 1,292 McColl's branded UK convenience stores as well as 358 newsagents branded Martin's, except in Scotland where we operate under our heritage brand, RS McColl. In addition we are also the largest operator of Post Offices in the UK, with approaching 600 in-store counters/branches.
Chief Executive's Review
Results overview
We have made a strong start to 2017, delivering an encouraging financial performance and successfully completing the integration of 298 quality new convenience stores, with the final stores transferring in July. Our revenue grew 7.6% to GBP504.8m (2016: GBP469.2m) in the 26 weeks to 28 May 2017 as we benefitted from an enlarged estate. We returned to LFL growth, driven by a prolonged period of good weather in the second quarter, in contrast to the prior year, and an improved performance in tobacco as we successfully transitioned to the new regulatory regime.
Our recently invested in stores (those acquired or converted between 2015-2016 which have traded for over 12 months), continued to perform strongly with LFL sales growth of 2.8% (3.8% in Q2). This endorses our strategy as we embark on the next stage of estate development, including Project Refresh.
As we grow the proportion of our estate that is convenience we have continued to improve gross profit margins, with a 90 basis point improvement year-on-year, helped by the higher proportion of grocery sales in the acquired stores alongside an improvement in trading terms. We saw an increase in adjusted EBITDA of GBP0.5m to GBP16.5m (2016: GBP16.0m), with earnings held back by continuing cost pressures due to legislative wage inflation and GBP1.3m of pre-opening costs associated with the acquired stores. These pre-opening costs included the recruitment of field teams, training of over 3,500 new colleagues, an increase in support staff, and costs associated with the rebranding and operational transition to McColl's. With all of the 298 acquired stores now part of the Group, they will make a material contribution to sales and profit in the second half of the year and beyond.
Strategic objectives
We have made significant progress with our strategy, which is focused on enhancing our offering and capturing growth in the convenience channel. There are three key elements to our strategy:
-- Increasing neighbourhood presence; -- Growing convenience offer; and -- Excellent customer service.
Increasing neighbourhood presence
We have significantly increased our neighbourhood presence with the successful integration of the 298 stores we acquired from the Co-op, with the final store conversion opening on schedule. We now operate 1,650 stores, comprising 1,292 convenience stores and 358 newsagents.
We began the integration at the end of January and the process has gone very smoothly, with minimal operational issues. The stores have opened on time, having only been closed for a few days and we have been well supported by third party contractors throughout the process.
We were delighted to welcome over 3,500 new colleagues. They have embraced being part of the McColl's team and have done a great job supporting customers through the transition.
The acquired stores are performing in line with management's expectations and will substantially increase the sales and EBITDA of the Group in the months ahead.
The next phase of the integration will begin in the second half of the year, where we will look to further enhance the offer with the addition of new products and services including, food-to-go, Post Offices and parcel collection points.
We will also restart our acquisition programme in the second half of the year, and we expect to acquire around 10 new convenience stores by the end of the financial year.
Increasing neighbourhood presence is about growing in scale and in visibility. Developing our brand is important and we have recently initiated a piece of work to support this. A programme of significant quantitative and qualitative customer research is underway.
Growing convenience offer
We are continuing our work to improve our convenience offer, with a particular focus on fresh and chilled foods. These categories have performed well in the first half of the year and we are exploring new ways to improve our fresh food credentials which are very important to the top-up shopping mission.
We currently use two main wholesale distribution partners (Nisa and Palmer & Harvey). Having last reviewed these arrangements in 2013 we are now in the process of a formal distribution retender. The wholesale sector is increasingly competitive with several of the large multiple retailers exploring opportunities to distribute through this channel. As one of the largest wholesale accounts available in the UK, we believe the time is right to consider our options. This process is an important part of leveraging the enhanced scale of our business and developing the best offer for our customers. The first stage of this process was completed in June and we expect it to conclude in the second half of the year.
We are developing our understanding of what customers want from their local McColl's. As part of this work we are currently running a trial to sell Co-op own brand products in 24 of our stores to see how customers respond to a different range. The products include fresh and chilled lines, ambient grocery and wines, and they will be trialled in these stores for around three months.
Following encouraging results from our store refresh pilot, where we have seen significant sales uplifts, we are extending the trial to over 20 stores in the second half of the year. These stores will be completely refreshed to improve the shopping experience for customers. They will benefit from an improved offer as well as new layouts designed to meet the needs of modern convenience shopping missions.
Continuing to grow food-to-go, we also opened one new Subway outlet in December and we will open a further four in the second half of the year. We are now developing a broader plan for Subway in 2018, including potential sites in the acquired stores.
Excellent customer service
We are improving our customer insight to make sure that we develop the best offer for customers and put them at the centre of decisions we make.
This year's him! convenience tracking programme, which interviews over 20,000 customers of UK convenience stores, shows that we continue to be rated very highly on colleague friendliness and helpfulness, the cornerstone of excellent customer service. In addition, recent research commissioned by McColl's and conducted by IGD shows that time is becoming an increasingly important part of the value equation for customers and therefore ease and speed of shop are also critical elements of service, particularly in the convenience channel. These are identified by customers as key strengths for McColl's and we continue to improve our in store efficiency, both to free up more time to help customers and improve speed of service.
Our services offer continues to grow and strengthen, with four in ten shopping trips to McColl's involving a services mission (e.g. parcel collection, cash machine, bill payment), significantly above the industry average. Not only are these services profitable in their own right, but they are a good way of driving incremental purchases with research showing that over 40% of people using a service in a convenience store also bought fresh food. The majority of the stores we have acquired from the Co-op do not have a substantial services offer and in the months ahead we will identify opportunities to introduce more services and give customers even more reasons to visit these stores.
Our Plus loyalty card provides another opportunity to drive increased spend. We now have over 700,000 members and the card has been particularly popular in the stores we have acquired where we have seen double digit basket penetration.
Other developments
We continue to look for operational improvement through the sale or closure of unprofitable or marginally profitable stores. In the first half of this year we closed or disposed of 19 stores, around half of which were part of the package of 100 newsagents we announced the sale of in October 2015. For those newsagents that remain unsold we are currently investigating a range of different options including closure, re-use and a revised financial plan.
Outlook
The recent outcome of the UK general election and continued uncertainty around the impacts of exiting the European Union continue to weigh on consumer sentiment and the general economic outlook, but McColl's has a good record of trading resiliently through periods of economic instability.
2017 is proving to be a period of significant activity in the convenience channel with the likelihood of further consolidation in the wholesale sector. It is clear that convenience is an attractive part of the industry with IGD forecasting significant growth of 18% to GBP47.1bn in the next five years. We are one of the leading convenience retailers, and we believe we are well placed to capture further growth, with considerable opportunity to acquire stores in what is a highly fragmented channel that has a high proportion of independents.
We have experienced a small amount of inflation in our business in the first half of the year and we will continue to work with our suppliers to ensure we only pass on input cost increases to customers when absolutely necessary.
Our strategy continues to focus on growing our convenience business, both through acquisitions and investment in our existing estate. We will continue to strengthen our range of products and services, as well as unlock further opportunities from our transformational acquisition.
Financial review
The Group has delivered an encouraging financial performance for the 26 week period ended 28 May 2017.
Strong revenue growth momentum
Total revenue increased by 7.6% to GBP504.8m (2016: GBP469.2m) reflecting the growing scale of the convenience estate as we integrate the acquired stores.
LFL sales were up 1.4% in the second quarter, giving a total LFL increase of 0.2% for the 26 weeks to 28 May 2017. LFL sales have benefitted from a prolonged period of good weather in Q2 driving strong performances in grocery and alcohol, as well as impulse categories such as soft drinks and snacks. Despite the long-term decline in tobacco we have seen an improved performance in this category in the first half of the year. New regulations came into force in May, banning the sale of smaller pack sizes and price-marked packs and introducing plain packaging for all tobacco products. We have managed this transition very smoothly which has helped us gain market share.
LFL sales in convenience stores were up 0.2% and LFL sales in newsagents were up 0.4% in the first half of the year. On a two-year basis, LFL sales remain strongest in convenience.
LFL sales in recently acquired or converted stores were up by 2.8% for the year to date, and up 3.8% in Q2, our strongest performance since we began to track this measure in 2015.
Further improvement in gross margin
Our margins are highest in our convenience stores, particularly those that carry bigger ranges of the higher margin categories such as fresh food and grocery. As these stores continue to become a greater proportion of our estate this is reflected in an improvement in our overall gross margin. In the first half of the year gross profit margin increased by 90 basis points to 25.4%, (2016: 24.5%) driven by favourable mix and an improvement in trading terms. In terms of overall value, total gross profit increased by 11.5% to GBP128.3m (2016: GBP115.0m).
Wage inflation and expenses relating to enlarged estate impact underlying operating profit
Operating profit before exceptional items decreased by GBP0.7m to GBP8.9m, principally reflecting a lower level of property profits year-on-year. Excluding profit on disposal of fixed assets, underlying operating profit fell GBP0.1m, impacted by legislative wage inflation, increasing central costs required to support a significantly larger business following our acquisition of 298 stores (and without the full benefit of sales and profit in the period), and also GBP1.3m pre-opening costs relating to the acquisition.
Adjusted EBITDA held back by pre-opening costs
Adjusted EBITDA increased by GBP0.5m to GBP16.5m (2016: GBP16.0m), reflecting the impact of a bigger business, but held back by GBP1.3m pre-opening costs as noted above.
Net finance costs impacted by higher level of borrowings and one-off costs
Net finance costs were GBP3.2m (2016: GBP1.4m), an increase of GBP1.8m as a result of the refinancing required to support the acquisition, increased borrowings and one-off exceptional costs relating to the write-off of previous banking fees, and a non-utilisation fee payable prior to full draw down of the term loan.
Profit before tax impacted by exceptional costs
Profit before tax for the period was GBP4.5m (2016: GBP8.2m), a fall of GBP3.7m, as a result of GBP2.3m exceptional costs relating to the acquisition, principally legal and advisory costs and the write-off of banking fees, and GBP1.3m pre-opening costs.
Taxation
The tax charge for the period was GBP1.3m (2016: GBP1.9m), representing a rate of 28.3% (2016: 22.7%). The comparable effective tax rate in 2017 excluding the impact of exceptional items was 21.8%. The difference between the current statutory rate of 20.0% and the effective tax rate excluding the impact of exceptional items of 21.8% in the period is due principally to depreciation of assets not qualifying for tax relief.
Adjusted earnings per share stable excluding pre-opening costs
Basic earnings per share was 2.8p (2016: 6.1p). Adjusted earnings per share, stated before exceptional items, reduced to 5.0p (2016: 6.1p). Excluding pre-opening costs relating to our acquisition adjusted earnings per share remained stable at 5.9p.
Dividend maintained
The Board has declared an interim dividend of 3.4 pence per share (2016: 3.4 pence). The interim dividend will be paid on 8 September 2017 to those shareholders on the register at the close of business on 11 August 2017.
Balance sheet and net debt
Shareholders' funds at the end of the period were GBP133.5m (2016: GBP124.5m).
The book value of goodwill and other intangibles, property, plant and equipment increased by GBP100.5m to GBP312.5m (2016: GBP212.0m), largely due to the acquisition of around two thirds of the Co-op stores, including around 100 freeholds.
Net debt at the end of the period was GBP110.8m (2016: GBP42.3m) (see note 13). This is following the partial draw down of a GBP100m term loan to support the acquisition, with the remainder to be drawn down in the second half of the year. Management remain comfortable that this debt profile is in-line with previously described expectations.
The combined accounting surplus on the two defined benefit pension schemes operated by the Group was GBP4.0m (2016: GBP6.0m surplus).
In June we completed the actuarial review of our pension schemes. The review concluded that the combined deficit of our two pension schemes (the TM Group Pension Scheme and the TM Pension Plan) was broadly similar to that at the previous actuarial valuation. Therefore only a minor incremental cash contribution will be made in the current review period.
Cash flow and capital expenditure
Net cash provided by operating activities increased to GBP34.0m (2016: GBP6.7m), predominantly driven by improvements to our working capital cycle, where we benefit from the increased scale of our business and a positive stock to trade payables working cycle. We also benefitted from underlying stock improvements, particularly in tobacco, which has undergone a compulsory range rationalisation following new legislation that came into force in May. In addition, there was a GBP12m timing benefit to other payables relating to this year's payroll dates versus 2016.
Net capital expenditure increased to GBP96.9m (2016: GBP8.8m) in the period as a result of the Co-op acquisition (the 298 stores have been purchased in packages as part of the phased integration into the McColl's estate, with around two thirds completing in H1 and the remainder being purchased in Q3).
Cautionary statement
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, Directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
McColl's Retail Group plc
Statement of Directors' responsibilities
26 week period ended 28 May 2017
Responsibility statement
We confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';
(b) The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year); and
(c) The interim management report includes a fair review of the information required by DTR.4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the Board,
Chief Executive
Jonathan Miller
Chief Financial Officer
Simon Fuller
Date: 23 July 2017
Principal risks and uncertainties
The Directors do not consider the principal risks and uncertainties to have significantly changed since the publication of the Annual Report for the period ended 27 November 2016. A detailed explanation of the risks summarised below, and how the Group seeks to mitigate these risks, can be found on pages 36 to 37 of the 2016 Annual Report.
Business strategy
If the Board either adopts the wrong strategy or does not implement it effectively the goals of the business will not be met and our performance may suffer.
Acquisitions
Failure to successfully integrate the 298 stores acquired from the Co-op, could impact profitability, our reputation and our funding arrangements.
Competition
We operate in a highly competitive and continually changing market. Failure to maintain market share could have an adverse effect on the Group's performance and profitability.
Customer offer
Customer shopping habits are influenced by a wide range of factors. If we do not respond to their changing needs they are more likely to shop with a competitor and our revenues could fall.
Economy
All our revenue is generated in the UK. Any deterioration in the UK economy, for example as a consequence of Brexit, could impact on consumer spending and cost of goods, which would therefore impact our sales and profitability.
Financial and treasury
The main financial risks are the availability of short- and long-term funding to meet business needs, fluctuations in interest rates, movements in energy prices and other post-Brexit impacts.
Information technology
We depend on the reliability and capability of key information systems and technology. A major failure, a breach, or prolonged performance issues with store or head office systems could have an adverse impact on the business and its reputation.
Operational cost base
We have a relatively high cost base, consisting primarily of salary, property rental and energy costs. Increases in these costs without a corresponding increase in revenues could adversely impact our profitability.
Regulation
We operate in an environment governed by strict regulations to ensure the safety and protection of customers, colleagues, shareholders and other stakeholders. Regulations include alcohol licensing, employment, health & safety, data protection and the rules of the Stock Exchange.
Supply chain
We rely on a small number of key distributors and may be adversely affected by changes in supplier dynamics and interruptions in supply.
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McColl's Retail Group
plc
Consolidated income
statement
26 week period ended
28 May 2017
26 weeks 26 weeks 52 weeks
ended ended ended
28 May 29 May 27 November
2017 2016 2016
GBP'000 GBP'000 GBP'000
Notes (unaudited) (unaudited) (audited)
Revenue 3. 504,787 469,181 950,403
Cost of sales (376,533) (354,134) (711,752)
Gross Profit 128,254 115,047 238,651
Administrative expenses (131,458) (118,039) (239,443)
Other operating income 12,067 11,960 23,147
Profits arising on
property-related items 13 621 1,109
Operating profit before
exceptional items 8,876 9,589 23,464
Exceptional items 4. (1,210) - (2,186)
Exceptional items relating
to losses arising on
property-related items - - (757)
------------------- ----------------- ---------------
Operating profit 7,666 9,589 20,521
Finance expense (2,115) (1,382) (2,723)
Finance income 3. 69 9 13
Exceptional items relating
to Finance expense 4. (1,107) - (152)
Net finance costs (3,153) (1,373) (2,862)
Profit on ordinary
activities before taxation 4,513 8,216 17,659
Tax on profit on ordinary
activities 6. (1,278) (1,861) (3,743)
Profit on ordinary
activities after taxation 3,235 6,355 13,916
=================== ================= ===============
Adjusted earnings per
share 8. 5.0p 6.1p 16.0p
Basic and diluted earnings
per share 8. 2.8p 6.1p 12.8p
McColl's Retail Group plc
Consolidated statement of comprehensive
income
26 week period ended 28 May
2017
26 weeks 26 weeks 52 weeks
ended ended ended
28 May 29 May 27 Nov
2017 2016 2016
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Profit for the period 3,235 6,355 13,916
------------------- ----------------- ---------------
Items of other comprehensive
income that will not
be reclassified to profit
or loss:
Actuarial loss recognised
on pension scheme (2,875) (784) (1,213)
UK deferred tax attributed
to actuarial gain:
Arising from the origination
of and reversal of current
and deferred tax differences 409 125 168
UK corporation tax 97 - 117
Other comprehensive loss
for the period (2,369) (659) (928)
Total comprehensive income
for the period 866 5,696 12,988
=================== ================= ===============
McColl's Retail Group plc
Consolidated balance sheet
28 May 2017
28 May 29 May
27 November
2017 2016 2016
GBP'000 GBP'000 GBP'000
Notes (unaudited) (unaudited) (audited)
Non-current assets
Goodwill 214,337 145,643 153,058
Other intangible
assets 1,093 1,534 1,293
Property, plant
and equipment 97,101 64,804 66,783
Investments 18 18 18
Pension scheme surplus 9,884 9,832 10,946
Total non-current
assets 322,433 221,831 232,098
---------------- --------------- --------------
Current assets
Inventories 65,704 50,607 55,041
Trade and other
receivables 38,661 33,058 34,609
Cash and cash equivalents 27,802 17,274 3,757
Assets held for
sale 9. 4,776 5,662 4,286
Total current assets 136,943 106,601 97,693
---------------- --------------- --------------
Total assets 459,376 328,432 329,791
---------------- --------------- --------------
Current liabilities
Trade and other
payables (167,084) (122,308) (130,021)
Provisions (3,097) (2,036) (1,647)
Corporation tax (1,253) (2,389) (2,294)
Liabilities associated
with assets held
for sale 9. (3,375) (5,287) (5,137)
Total current liabilities (174,809) (132,020) (139,099)
---------------- --------------- --------------
Net current liabilities (37,866) (25,419) (41,406)
---------------- --------------- --------------
Non-current liabilities
Borrowings 12. (133,806) (56,821) (35,961)
Other payables (3,205) (3,195) (4,160)
Provisions for liabilities (276) (2,115) (365)
Deferred tax liabilities (7,876) (5,921) (4,856)
Net pension liability (5,864) (3,819) (4,844)
Total non-current
liabilities (151,027) (71,871) (50,186)
---------------- --------------- --------------
Total liabilities (325,836) (203,891) (189,285)
---------------- --------------- --------------
Net assets 133,540 124,541 140,506
================ =============== ==============
Shareholders' equity
Equity share capital 115 105 115
Share premium account 12,579 - 12,579
Retained Earnings 120,846 124,436 127,812
133,540 124,541 140,506
================ =============== ==============
McColl's Retail Group plc
Consolidated statement of changes
in equity
26 week period ended 28 May
2017
Called
up share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 May
2016 (unaudited) 105 - 124,436 124,541
Profit for the period - - 7,561 7,561
Actuarial loss recognised
on pension scheme - - (269) (269)
Total comprehensive
income for the period - - 7,292 7,292
Issue of share capital 10 12,579 - 12,589
Dividends paid - - (3,916) (3,916)
Balance at 27 November
2016 (audited) 115 12,579 127,812 140,506
Profit for the period - - 3,235 3,235
Actuarial loss recognised
on pension scheme - - (2,369) (2,369)
Total comprehensive
income for the period 866 866
Dividends paid - - (7,832) (7,832)
Balance at 28 May
2017 (unaudited) 115 12,579 120,846 133,540
============== ============= ============== ==============
McColl's Retail Group
plc
Consolidated cash flow
statement
26 week period ended
28 May 2017
26 weeks 26 weeks
ended ended
28 May 29 May
52 weeks
ended
27 November
2017 2016 2016
GBP'000 GBP'000 GBP'000
Notes (unaudited) (unaudited) (audited)
Net cash provided by
operating activities 14. 34,046 6,730 21,649
Cash flows from investing
activities
Acquisition of property,
plant and equipment (17,842) (6,278) (15,920)
Proceeds from sale
of property, plant
and equipment 766 5,039 5,874
Acquisition of businesses, 10.
net of cash acquired & 11. (79,892) (7,569) (15,656)
Finance income 69 9 13
Net cash used in investing
activities (96,899) (8,799) (25,689)
----------------- ---------------- --------------
Cash flows from financing
activities
Repayment of loans - - (7,500)
(Repayment of)/new
hire purchase loans (67) (186) 1,921
Borrowing issue costs (700) - (517)
Drawdown on facility 98,545 13,500 -
Proceeds on issue of
shares - - 13,076
Dividend paid (7,832) (7,120) (11,036)
Finance expense (2,920) (1,285) (2,479)
Hire purchase interest
paid (128) (97) (199)
Net cash from/(used
in) financing activities 86,898 4,812 (6,734)
----------------- ---------------- --------------
Increase/(decrease)
in cash and cash equivalents 24,045 2,743 (10,774)
Cash and cash equivalents
at beginning of period 3,757 14,531 14,531
Cash and cash equivalents
at end of period 27,802 17,274 3,757
================= ================ ==============
These financial statements of McColl's Retail Group plc, registered number 08783477, were approved and
authorised for issue by the Board of Directors on 23rd July 2017 .
Signed on behalf of the Board of Directors
Simon Fuller
Director
McColl's Retail Group plc Notes to the financial statements 26 week period ended 28 May 2017
1. Basis of preparation
The Interim Financial Statements for the 26 week period ended 28 May 2017 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. They have been prepared in accordance with the recognition and measurement criteria of IFRS. They do not include all the information required for full annual financial statements to comply with IFRS, and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 27 November 2016 as applied in the Group's Annual Report and Accounts 2016 (the "Annual Report 2016").
The accounting policies applied by the Group in these consolidated results are the same as those applied by the Group in its Annual Report 2016 for the period ending 27 November 2016.
The Annual Report 2016 is available at:
http://www.mccolls.co.uk/investor/
The financial information for the period ended 28 May 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group has filed statutory accounts for the period ended 27 November 2016. The auditor has reported on these accounts; their report was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Basis of measurement
The consolidated financial information has been prepared on a historical cost basis, except for the following items (refer to individual accounting policies for details):
o Derivative financial instruments - fair value through income statement; and
o Net defined benefit pension asset or liability - actuarial basis.
Business Combinations
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.
Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired, including separately identifiable assets, is recognised as goodwill. Any discount on acquisition, i.e. where the cost of acquisition is below the fair values of the identifiable net assets acquired, is credited to the income statement in the period of acquisition.
New standards interpretations and amendments not yet effective:
IFRS 15 'Revenue from Contracts with Customers'
IFRS 16 'Leases'
IFRS 9 'Financial Instruments'
IFRS 15 is effective for periods beginning on or after 1 January 2018. The standard establishes a principles based approach for revenue recognition and is based on the concept of recognising revenue for obligations only when they are satisfied and the control of goods or services is transferred. It applies to all contracts with customers, except those in the scope of other standards. It replaces the separate models for goods, services and construction contracts under the current accounting standards. The Group believes that the adoption of IFRS 15 will not have a material impact on its consolidated results.
IFRS 16 represents a significant change in the accounting and reporting of leases for lessees as it provides a single lessee accounting model, and as such, requires lessees to recognise assets and liabilities for all leases unless the underlying asset has a low value or the lease term is 12 months or less. Accounting requirements for lessors are substantially unchanged from IAS 17. The impact of the standard on the Group is currently being assessed and it is not yet practicable to quantify the effect of IFRS 16 on these consolidated financial statements.
IFRS 9 replaces IAS 39. The standard is effective from 1 January 2018 and introduces: new requirements for the classification and measurement of financial assets and financial liabilities; a new model based on expected credit losses for recognising provisions; and provides for simplified hedge accounting by aligning hedge accounting more closely with an entities risk management methodology. The Group believes that the adoption of IFRS 9 will not have a material impact on its consolidated results.
Going concern
In making their going concern assessment the Directors have considered the Group's business activities, it's financial position, the market in which it operates and the factors likely to affect its future development.
The Directors have reviewed the Group's forecasts, taking into account a range of sensitivities, and how they impact headroom against its bank facilities, and its ability to meet its capital investment and operational needs.
In July 2016, the Group completed an amended GBP100m revolving credit facility and GBP50m accordion for the Group. The Group has net current liabilities of GBP37.9m at the period end. The Directors have additionally considered this position to determine if it presents any going concern issues. The Group is profitable and cash generative and is supported by the revolving credit facility alongside a GBP100m term loan. As at 28 May 2017 GBP135.5m was drawn against the combined facility, and therefore there is sufficient headroom to meet the Group's debts as they fall due.
The Directors believe the Group is in a strong financial position due to its profitable operations and strong cash generation and that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
2. Significant accounting policies
Revenue
Revenue represents the amounts receivable for goods and services sold through retail outlets in the period which fall within the Group's principal activities, stated net of value added tax. Revenue is shown net of returns. Revenue is recognised when the significant risks and rewards of goods and services have been passed to the buyer and can be measured reliably.
Commission from the sale of lottery tickets, electronic phone top-ups and travel tickets is recognised net within turnover, when transactions deriving commissions are completed, as the Group acts as an agent.
In the opinion of the Directors, the Group engages in one principal area of activity, that of operators of convenience and newsagent stores. Turnover is derived entirely from the United Kingdom.
Cost of sales
Cost of sales consists of all direct costs to the point of sale including warehouse and transportation costs. Supplier incentives, rebates and discounts are recognised as a credit to cost of sales in the period in which the stock to which the discounts apply is sold. The accrued value at the reporting date is included in prepayments and accrued income.
Exceptional items
Exceptional items relate to costs or incomes that derive from events or transactions that fall within the normal activities of the Group, but which are excluded from the Group's underlying profit before tax measure due to their size and nature in order to better reflect management's view of the performance of the Group. The underlying profit before tax measure (profit before exceptional items) is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies. Details of exceptional items are set out in note 4.
Other operating income
Post Office, rental income, ATM commissions and franchise income are recognised in the consolidated income statement when the services to which they relate are earned.
Goodwill
Goodwill represents the excess of the fair value of the consideration of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is recognised as an asset on the Group's balance sheet in the year in which it arises. Goodwill is not amortised but is tested for impairment at least annually and is stated at cost less any provision for impairment. Any impairment is recognised in the income statement and is not reversed in a subsequent period.
Non-current assets held for sale
Non-current assets are classified as assets held for sale only if available for immediate sale in their present condition, a sale is highly probable and expected to be completed within one year from the date of classification. Such assets are measured at the lower of the carrying amount and fair value less costs to sell and are not depreciated or amortised.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Share-based payment arrangements
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the income statement.
Taxation
Current taxation
Current tax is provided at amounts expected to be paid using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Current tax is charged or credited to the income statement, except when it relates to items charged to equity or other comprehensive income, in which case the current tax is also dealt with in equity or other comprehensive income respectively.
Deferred taxation
Deferred tax is accounted for on the basis of temporary differences arising from differences between the tax base and accounting base of assets and liabilities.
Deferred tax is recognised for all temporary differences, except to the extent where a deferred tax liability arises from the initial recognition of goodwill or from the initial recognition of an asset or a liability in a transaction that is not a business combination and, at the time of transaction, affects neither accounting profit nor taxable profit. It is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only to the extent that the Directors consider that, on the basis of all available evidence, it is probable that there will be suitable future taxable profits from which the future reversal of the underlying differences can be deducted.
Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity or other comprehensive income, in which case the deferred tax is also dealt with in equity or other comprehensive income respectively.
Pensions
The Group operates two defined benefit pension schemes in addition to several defined contribution schemes, which require contributions to be made to separately administered funds.
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the income statement in the year to which they relate.
Defined benefit schemes
Defined benefit scheme surpluses and deficits are measured at:
o The fair value of plan assets at the reporting date; less
o Scheme liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds that have maturity dates approximating to the terms of the liabilities; plus
o Unrecognised past service costs; less
o The effect of minimum funding requirements agreed with scheme trustees.
A surplus is recognised where the Group has an unconditional right to the economic benefits in the form of future contribution reductions or refunds.
Any difference between the interest income on scheme assets and that actually achieved on assets, and any changes in the liabilities over the year due to changes in assumptions or experience within the scheme, are recognised in other comprehensive income in the period in which they arise.
Costs are recognised separately as operating and finance costs in the income statement. Operating costs comprise the current service cost, any income or expense on settlements or curtailments and past service costs where the benefits have vested.
Past service costs are recognised directly in income unless the changes to the pension scheme are conditional on the employees remaining in service for a specified period of time. In this case, the past service costs are amortised on a straight-line basis over the vesting period.
Finance items comprise the interest on the net defined benefit asset or liability.
3. Segmental analysis and revenue
In accordance with IFRS 8 'Operating segments' an operating segment is defined as a business activity whose operating results are reviewed by the chief operating decision maker and for which discrete information is available. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The principal activities of the Group are currently managed as one segment. Consequently all activities relate to this segment, being the operation of convenience and newsagent stores in the UK.
An analysis of the Group's revenue is as follows (all continuing operations):
26 weeks 26 weeks 52 weeks
ended ended ended
28 29 May 27
2016
May 2017 GBP'000 November
2016
GBP'000 (unaudited) GBP'000
(unaudited) (audited)
Sale of goods 504,787 469,181 950,403
-------------------------- ------------------- -----------------------
Property rental
income 1,554 1,392 2,985
Other operating
income 10,513 10,568 20,162
12,067 11,960 23,147
-------------------------- ------------------- -----------------------
Investment revenue 69 9 13
Total revenue as
defined in IAS
18 516,923 481,151 973,563
========================== =================== =======================
4. Exceptional items
Due to their significance or one-off nature, certain items have been classified as exceptional as follows:
26 weeks 26 52 weeks
ended weeks ended
28 ended 27
29 May
2016
May 2017 GBP'000 November
2016
GBP'000 (unaudited) GBP'000
(unaudited) (audited)
Cost associated with
acquiring Co-op stores
(1) 1,234 - 1,852
(Income)/Costs relating
to closure of non-trading
sites (24) - 334
1,210 - 2,186
-------------------------- ------------------ ----------------------
Finance costs associated
with acquiring Co-op stores
(1) 1,107 152
Impairment and onerous
lease provisions related
to assets held for
sale (2) - - 757
2,317 - 3,095
-------------------------- ------------------ ----------------------
Tax effect 234 - 337
-------------------------- ------------------ ----------------------
2,551 - 3,432
========================== ================== ======================
1. Cost of acquiring Co-op stores
On 13th July 2016 the Group entered into an agreement to purchase 298 convenience stores from the Co-op, for an aggregate consideration of GBP117m. The acquisition will be integrated during 2017 by Martin McColl Limited, a wholly-owned subsidiary of the Group. The acquisition was approved by the Competition and Markets Authority on 20 December 2016. The exceptionalised costs relate to sunk costs which the Group has incurred during the process, such as legal fees and due diligence fees.
2. Assets held for sale
Following a review of its portfolio in 2015, the Group decided to sell 97 of its newsagents. The Group continues to focus on the strategy of developing and expanding the convenience business and identified these stores as not being part of its long-term planning. Please refer to note 9.
5. Adjusted EBITDA
In order to provide shareholders with a measure of the true underlying performance of the business and to allow a more understandable assessment of its position, the Group makes adjustments to profit before tax. These adjustments are one-off in nature, material by size and are considered to be distortive of the true underlying performance of the business. Exceptional items relate to costs or incomes that derive from events or transactions that fall within the normal activities of the Group, but which are excluded from the Group's underlying profit before tax measure due to their size and nature in order to better reflect management's view of the performance of the Group. The underlying profit before tax measure (profit before exceptional items) is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies. Details of exceptional items are set out in note 4.
26 weeks 26 weeks 52 weeks
ended ended ended
28 May 29 May
2017 2016 27 November
2016
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Adjusted EBITDA
Operating profit
before exceptional
items 8,876 9,589 23,464
Depreciation and
amortisation 7,599 7,032 14,305
Impairment of property,
plant and equipment
and onerous leases - - 308
Less: Profit on disposal
of fixed assets (13) (621) (1,422)
16,462 16,000 36,655
========================== =================== ======================
6. Taxation
The tax charge for the period was GBP1.3m (2016: GBP1.9m), representing a rate of 28.3% (2016: 22.7%). The comparable effective tax rate in 2017 excluding the impact of exceptional items was 21.8%. The difference between the current statutory rate of 20.0% and the effective tax rate excluding the impact of exceptional items of 21.8% in the period is due principally to depreciation of assets not qualifying for tax relief.
7. Dividends
The Board has declared an interim dividend of 3.4 pence per share (2016: 3.4 pence). The interim dividend will be paid on 8 September 2017 to those shareholders on the register at the close of business on 11 August 2017. The payment of this dividend will not have any tax consequences for the Group. The final dividend for 2016, declared and paid was 6.8 pence per share (2015: 6.8 pence).
8. Earnings per share
26 weeks 26 weeks 52 weeks
ended
29 May
2016
ended 28 GBP'000 ended
27
May 2017 (unaudited) November
2016
GBP'000 GBP'000
(unaudited) (audited)
Basic weighted average
number of shares 115,172,774 104,712,042 108,505,494
Diluted weighted average
number of shares 115,172,774 104,712,042 108,505,494
------------------------- ------------------ -----------------------
Profit attributable
to ordinary shareholders 3,235 6,355 13,916
Basic earnings per
share 2.8p 6.1p 12.8p
Diluted earnings per
share 2.8p 6.1p 12.8p
Adjusted earnings
per share:
Profit attributable
to ordinary shareholders 3,235 6,355 13,916
Exceptional items
(note 4) 2,317 - 3,095
Tax effect of adjustments 234 - 337
------------------------- ------------------ -----------------------
Profit after tax and
before exceptional
items 5,786 6,355 17,348
Prior year deferred
tax adjustment - - (282)
Adjusted profit after
tax and before exceptional
items 5,786 6,355 17,066
========================= ================== =======================
Adjusted earnings
per share (pre tax
adjustment) 5.0p 6.1p 16.0p
Adjusted earnings
per share (post tax
adjustment) 5.0p 6.1p 15.7p
9. Assets held for sale
Following a review of its portfolio in 2015, the Group decided to sell 97 of its newsagents. The Group continues to focus on the strategy of developing and expanding the convenience business and identified these stores as not being part of its long-term planning. At the end of financial year November 2016 there were 75 stores remaining. Since then up until period ending 28 May 2017 the Group has sold 9 and removed 18 from the list, leaving 48 remaining at the end of the period.
The Group has treated these assets held for sale under IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'.
IFRS 5 requires that the Group must not offset the gains and losses compared to fair value of the individual stores. However, on the basis that it is not practical to disclose the remaining 48 individual assets held for sale, these have been disclosed in aggregate.
28 May
29 May 27 November
2017 2016 2016
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Assets relating to the
properties for sale 4,776 5,662 4,286
Liabilities associated
with assets held for
sale (3,375) (5,287) (5,137)
Analysis:
Goodwill - 481 -
Tangible fixed
assets 2,183 1,477 890
Inventory 1,852 2,089 2,073
Trade and other
receivables 741 1,615 1,323
Assets of the business
classified as held for
sale 4,776 5,662 4,286
Trade and other
payables (3,197) (5,287) (4,840)
Provisions (178) - (297)
--------------------------- ------------------------- --------------------------
(3,375) (5,287) (5,137)
Net assets/(liabilities)
of the business
classified
as held for sale 1,401 375 (851)
=========================== ========================= ==========================
10. Business combinations
During the period excluding the Co-op store acquisition the Group made 4 acquisitions, none of which was individually considered material to the Group. The cash consideration for these acquisitions and the assets acquired are summarised as follows:
28 May 29 May 27 November
2016 2016
2017 GBP'000 GBP'000
GBP'000 (unaudited) (audited)
(unaudited)
Tangible fixed
assets 930 4,459 5,681
Inventory - 694 1,758
Goodwill 78 2,887 7,931
Deferred tax
asset 215 - 286
Cash consideration 1,223 8,040 15,656
=========================== ========================== =======================
11. Business combination: Acquisition of Co-op stores
On 13 July 2016 management entered into an agreement to purchase 298 convenience stores from the Co-op, for an aggregate consideration of GBP117m. The acquisition will be integrated during 2017 by Martin McColl Limited, a wholly-owned subsidiary of the Group, by way of asset purchase. The first store was acquired on 30 January 2017 with its first day of trading on 31 January 2017. The Co-op stores acquired are convenience stores operating in the same market as the Group and were acquired in order to grow the existing convenience estate.
28 May
2017
GBP'000
Recognised amounts of identifiable (unaudited)
assets acquired and liabilities
assumed:
Financial assets -
Inventory -
Property, plant and equipment 23,056
Identifiable intangible assets -
Financial liabilities (1,874)
Contingent liability -
Total identifiable assets 21,182
===========================
Goodwill 57,487
Deferred tax liability (3,480)
Total consideration 78,669
Satisfied by :
Cash 78,669
Total consideration transferred 78,669
===========================
The goodwill of GBP57.5m arising from the acquisition represents the difference between consideration transferred, and accounting of fair value of freeholds, fixtures and fittings and provisions relating to stock and dilapidations.
Acquisition accounting will only be completed upon integration of all 298 stores. Until full integration acquisition accounting is incomplete for payables and receivables.
None of the goodwill recognised is expected to be deductible for income tax purposes.
Acquisition-related-costs included in exceptional expenses in the Group plc consolidated income statement for the period ended 28 May 2017 amounted to GBP2.3 million.
There were no contingent considerations or indemnities as part of the transfer.
12. Borrowings
Details of loans and
credit
facilities are as
follows:
28 May 29 May 27 November
2017 2016 2016
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Amounts falling
due:
In more than two
years but not
more than five
years 135,545 58,000 37,000
Total borrowings 135,545 58,000 37,000
Less: unamortised
issue costs (1,739) (1,179) (1,039)
Non-current borrowings 133,806 56,821 35,961
=========================== ========================= =======================
The long-term loans are secured by a fixed charge over the Group's head office property together with a floating charge over the Group's assets.
In July 2016, the Group completed an amended GBP100m revolving credit facility and GBP50m accordion. Post CMA clearance the refinancing completed in July 2016 provided a GBP100m term loan to use for the consideration of the Co-op store acquisition. The current combined facility drawn as at 28 May 2017 is GBP135.5m (2016: GBP37m).
Details of loans and hire purchase obligations repayable within two to five years are as follows:
28 May 29 May 27 November
2016
2017 2016 GBP'000
GBP'000 GBP'000 (audited)
(unaudited) (unaudited)
Revolving facility
and term loan
available until
July 2021 135,545 58,000 37,000
Hire purchase obligations 2,969 1,812 3,346
138,514 59,812 40,346
========================== ======================== ======================
13. Net debt
28 May 29 May 27 November
2016 2016
2017 GBP'000 GBP'000
GBP'000 (unaudited) (audited)
(unaudited)
Cash at bank
and in hand 27,802 17,274 3,757
--------------------------- ------------------------- -----------------------
Loans due:
In more than two years
but not more than five
years (135,545) (58,000) (37,000)
Total borrowings (135,545) (58,000) (37,000)
Less: unamortised
issue costs 1,739 1,179 1,039
(133,806) (56,821) (35,961)
Amounts due
under hire purchase
obligations (4,748) (2,708) (4,815)
(138,554) (59,529) (40,776)
Net debt (110,752) (42,255) (37,019)
=========================== ========================= =======================
14. Notes to the cash flow statement
28 May 29 May 27 November
2016 2016
2017 GBP'000 GBP'000
GBP'000 (unaudited) (audited)
(unaudited)
Profit for the
period 3,235 6,355 13,916
Income and expenses not
affecting operating cash
flows
Depreciation
and amortisation 7,599 7,032 14,305
Impairment losses - - 415
Income tax 1,278 1,861 3,743
Finance expense 3,222 1,382 2,875
Finance income (69) (9) (13)
Profit on disposal
of fixed assets (13) (621) (352)
15,252 16,000 34,889
Changes in operating
assets
and liabilities (including
assets held for sale)
(Increase)/decrease
in trade receivables (150) 11 (252)
Increase in
other receivables (1,506) (4,535) (5,669)
(Increase)/decrease
in inventory (10,443) 1,398 (1,853)
Increase/(decrease)
in trade payables 28,506 5,180 (422)
Increase/(decrease)
in other payables 4,609 (8,402) 3,629
Decrease in
pensions (384) (610) (1,025)
Increase/(decrease)
in provisions 755 (325) (2,504)
Cash generated
by operations 36,639 8,717 26,793
Income taxes
paid (2,593) (1,987) (5,144)
Net cash provided
by operating
activities 34,046 6,730 21,649
============================= =========================== ========================
Analysis of net debt
At
At Other 28
29 November Cash non-cash May
2016 flow movements 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash
equivalent 3,757 24,045 - 27,802
Borrowings (35,961) (98,545) 700 (133,806)
Amounts due
under hire
purchase
obligations (4,815) 67 - (4,748)
(37,019) (74,433) 700 (110,752)
=========================== ========================== ======================= ======================
15. Related party transactions
Only the Directors and senior managers are deemed to be key management personnel. It is the Board which has responsibility for planning, directing and controlling the activities of the Group. All transactions are on an arm's length basis and no period end balances have arisen as a result of these transactions.
There were no material transactions or balances between the Group and its key management personnel or members of their close family.
INDEPENT REVIEW REPORT TO MCCOLL'S PLC
We have been engaged by the Group to review the condensed set of financial statements in the half-yearly financial report for the 26 week period ended 28 May 2017 which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 15. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Group a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 26 week period ended 28 May 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
23 July 2017
This information is provided by RNS
The company news service from the London Stock Exchange
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