Mccoll's Retail Share Discussion Threads

[aleman] 07/3/2017 12:03

A chain of 34 Budgens stores has failed to find a buyer and will close, with the loss of more than 800 jobs.

The owner of the stores affected, Food Retailer Operations Limited (FROL), was put in administration a month ago after hitting "difficult" trading conditions.

The stores are spread around the UK, from Dorset to Norfolk to Scotland, and were bought from the Co-op in 2016.

The closures do not affect the remainder of the Budgens chain, which has more than 100 stores.

[aleman] 28/2/2017 10:12

It seems an undemanding target given their numbers:

2017 2018
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
27/02/17 BUY 24.90 17.30 10.30 31.30 22.00 11.00

[dirty75] 27/2/2017 15:38

all seems in good hands. Numis target is £2.25p

[aleman] 27/2/2017 07:58

Still reading the results but I suspect this is the key paragraph:

From 2017, following the acquisition of the 298 Co-op stores, we expect the pence per share of dividend payments to increase as we integrate the new stores. To maintain the right balance between dividends, capital investment and deleveraging, and because we expect our earnings to significantly increase as a result of the acquisition, in the short-term we will reduce the dividend pay-out ratio from c.60% to c.50% (of annual reported profits after tax, before exceptional gains, but after exceptional costs).

[aleman] 20/2/2017 16:37

115 shares were purchased 30 times today. What's all that about?

[essential] 16/2/2017 12:13

Needs to break 190p for a breakout

[aleman] 14/2/2017 11:10

Digital Look forecasts (consensus of two brokers) now show the benefits of the Coop deal feeding through into next year:


Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
2016-11-30 950.16 19.92 14.64p 12.6 -1.6 -8% 10.20p 5.5%
2017-11-30 1,110.41 24.87 17.28p 10.7 0.6 18% 10.28p 5.6%
2018-11-30 1,249.43 31.10 21.73p 8.5 0.3 26% 10.86p 5.9%

[aleman] 20/1/2017 16:55

An interesting observation from December's retail sales was that small retailers did much better than large ones - at 17.4% to 5.1% (compared to last December). Amongst FOOD retailers small to large was 13.3% to 2.6%. (Note these numbers are NOT adjusted for an extra trading day in this December.) Are higher fuel costs already encouraging consumers to nip to their local shops more and avoid longer journeys to superstores and shopping centres? (Fuel sales fell slightly Dec to Dec for the first time in 2 1/4 years, after some big increases in the last couple of years.)

[aleman] 12/1/2017 10:11

It looks like about 65 older and smaller McColls shops are up for sale after the Coop acquisition. That should help with pay off some of the debt incurred and probably improve dividend prospects and/or mean it need not be that long before further acquisitions can be funded.

[aleman] 19/12/2016 09:36

But as Britain heads towards Brexit, the age of cheap food & drink is drawing to a close, with a raft of data from the ONS, Kantar Worldpanel and the BRC this week suggesting the two-year-long era of deflation is at an end, as manufacturers look to pass on cost increases as a result of the weakened pound.

With bananas, milk and cheese increasing in recent weeks, “there’s no chance prices will stay the same” a branded cheese supplier said. “It’s just a question of how much and when.”

The Grocer’s enquiries suggested price negotiations for 2017 are extensive and well advanced, with the consensus that prices are being held for the crucial Christmas trading period. “We cover forwards in currency [so] we’ll aim to hold prices until the end of this calendar year,” said one own-label supplier. “But we have already been advising and have in the main been relatively successful in obtaining price increases from the beginning of next year.”

[thorpematt] 02/12/2016 15:44

Thanks for the links.

I am fundameltaly much more positive on this stock than the wider market appears to be. It was the same with GRG some while ago. I am not saying we have the same level of potential here by any stretch BUT in a similar vein I believe it is the change in business model which is the underlying story. MCLS are FAR more able and capable to deliver it than its larger rivals IMO and historically (like GRG) there team at the top has delivered REAL growth and value to shareholders (according to my calculations as taught to me by Mr. Graham).

[neilyb675] 02/12/2016 15:33

185.25 - 188.00 (GBX) at 15:16:03
on Market (LSE)

[aleman] 01/12/2016 09:50

Hold on. Food retailers shares fell on DEflation, as reduced revenues made it harder to meet rising costs. Now, you are saying INflation will do the same?

I actually think the whole economy is about to tank on rising interest rates, increased import costs and, possibly, rising fuel costs (coal has shot up this year, besides stronger oil). Corner shops tend to be a refuge in recession. Their sales tend to hold up as people lose their jobs and can't afford to drive to superstores twice a week.

There is the complication of bricks and mortar retailers being hit by online sales, which seems to be hitting home hard again this year, I recently noticed lots of empty small shop units in Southport and Leeds, and an even greater proliferation of charity and £1 shops. I noted a first £1 cafe in Southport, which used to be a bit more upmarket then some Northern seaside towns but maybe not so much now. It there is less draw to such high streets as the economy declines and range of shops deteriorates, I suspect people will buy a bit more stuff when they nip into their local corner shop for milk, bread and now parcels. I could be wrong, of course. Who knows what ever-expandinng online will do? They will start charging properly for delivery before long, as the dash for market share matures. I think dull old MCLS's 6% and rising yield might be reassessed when the next downturn arrives, which I think will be soon.

Mortgage rates rising:

[lord gnome] 01/12/2016 08:50

I just can't bring myself round to buying into this. It has been on my watch list forever, or so it seems. The growth is coming by expansion, fair enough, but the LfL figures are not good. The group is having to pay more overheads for more shops to buy the growth to sell marginally more goods. That must be hitting profits.
They will also be running into major headwinds over the next twelve months. I can't see LfL figures improving any time soon. Higher inflation is on the way, bringing tighter margins as retailers try to absorb costs to maintain their competitive positions. The move to the living wage which will hit the pay bill (not that I am complaining, mind).
A nice yield, which I would like to have, but I think the risk to capital is just a bit too high for me at the moment. Back to 140 and I'll have a dip.

[neilyb675] 01/12/2016 08:13

yes all going to plan

[aleman] 01/12/2016 07:47

That's a very steady update. Year finished and traded in line with expectations. 1000th store opened. Coop conversions planned to start after Christmas (and should be completed by half year, said previous news). All ahead easy.

[s34icknote] 07/11/2016 13:17

Good write up in mail on Sunday

[dirty75] 07/11/2016 12:07

little bit of movement in the price now, never takes much volume to go one way or tother

[aleman] 07/11/2016 11:20

I've just checked the website and there is a pre-close update on December 1st and Christmas trade update January 12th.

[aleman] 07/11/2016 10:59

That forecast seems a bit conservative to me but maybe the refit costs will eat into next year's profit and then 2018 will see the real boost. Refits start in January and should finish after about 4 months. EBITDA should then run at over £50m per year, making the current maket cap look a bit tight. 250p would seem more reasonable given the likely steady cash generation and dividend increases..

[aleman] 07/11/2016 10:30

Thanks, dirty75. Your article indicates that profits are set to rise from £20m this year to £25m next year.I think that would probably push eps to a little over 18p.