Mccoll's Retail Share Discussion Threads

[she-ra] 20/12/2019 15:01

A deeply discounted placing he doesn't want to take part in, maybe?

Otherwise I don't see the point in him selling.

[spectoacc] 19/12/2019 20:44

Very much still in here, the divi whilst waiting, the possibility of MRW striking early (I think it's still 1-2 years away), the chance of trading picking up rather than L4L falls.

[kazoom] 18/12/2019 23:51

Thanks Outlaw - I thought it was probably a quote, but was interested who it came from (Royston Wild as it turns out.)
It was a reasoned argument; but not one with which I fully agree - I've been following this for a fair while and looking quite closely for c. 6 months. My finger continues to hover over the buy button, but just looking for a trigger to cause me to act.

[loganair] 18/12/2019 22:26

s40 - Correct

[spotdog40] 18/12/2019 17:56

Loganair- Isn't he Lithuanian? and wasn't he only rich until he bought into MCLS?

[kazoom] 18/12/2019 16:04

Hi Logan - was 1074 a quote from somewhere or your own view?

[loganair] 18/12/2019 12:54

Tesco convenience stores are more expensive then their supermarkets, even Tesco themselves say this is the case by approximately 5%.

Hopefully as McColl's continue to close their remaining Newsagents and smaller convenience stores as their leases expire then their margins will begin to increase.

In 2014 McColl's had a little over 500 Newsagents, currently they now have around 270 and are closing 40 to 50 a year. Each year they are also closing around 30 smaller and poorly performing stores while opening 10 to 15 much larger and more profitable stores and therefore I am not too worried about revenues falling slightly.

Difficult for a cut price take over as Estonia's richest man who has an 11% stake in McColl's bought most of his stake at 295p per share.

I hope McColl's keep reducing their debt which they seem to be doing by around £10mln per year.

I am expecting McColl's dividend for this year to be maintained at last years 4p and therefore would give them an up and coming Final dividend of 2.7p.

[spotdog40] 18/12/2019 12:37

Why don't they just put their prices up? "Convenience" store- the clue is in the name. You wouldn't expect them to be competing with Supermarkets on price, so why are their margins so low?
I'm a bottom feeder who has been lured in here by a collapsed share prices, and too good to be true dividends.
I've had some success with PETS, but am still waiting for the tide to turn here and also with SAGA. All 3 shares are relatively recent IPOs that have been loaded with debt, then floated off at crazy valuations. At the first sign of difficulties, the price crashes. Admittedly there have been a few signs of difficulties here, and it could be that it's just being prepared for a cut price takeover by Morrisons.
Whilst further deterioration on margin would be catastrophic given the massive turnover, and worrying debt pile, any turnaround in margin would make this look seriously undervalued.

[loganair] 17/12/2019 14:31

10%+ yields! Is this dividend stock a brilliant buy or an ISA investment trap?


There’s never been a better time to be a dividend investor than today. Global payouts currently sit at record highs and there’s a galaxy of top income stocks for UK investors in particular to load up on right now.

That said, I’m not tempted for even a second to splash the cash on McColl’s Retail Group (LSE: MCLS) despite some truly cracking earnings and dividend projections. And here’s why.

A 16% profits rise is forecasted for the fiscal year to November 2020, one which supports predictions the convenience store operator will start lifting dividends again. A 4.25p per share reward is anticipated, up from 4p in recent years, and one which yields a monster 10.7%.

I’m afraid these City estimates are looking just a little toppy, though. But don’t just take my word for it. The full-year results unveiled by McColl’s earlier on Tuesday reveal just how frothy these numbers look as trading worsens moving into the new financial year.

Like-for-like sales were flat in the fiscal period just passed, an improvement from the prior year when corresponding revenues dropped 1.4%, but hardly a signal of an impending turnaround.

Indeed, the retail play said full-year adjusted EBITDA would fall short of expectations due to “softer market conditions in the second half” because of lower consumer confidence and the impact of bad weather.

The high probability of current forecasts being blown off course mean not even a forward P/E ratio of 5.5 times — a reading which sits well inside the widely-regarded bargain benchmark of 10 times and below — is enough to encourage me to invest.

McColl’s continues to see its shares haemorrhage value (down 28% so far in 2019 and around 80% in the past three years), and there’s no signs the fallen retail play is about to turn things around any time soon. Expect more heavy stock price weakness in 2020, I say.

[loganair] 16/12/2019 20:18

Peel Hunt called the update “tough but no worse than feared”.

[newsboy1] 10/12/2019 11:00

McColl's is a neighbourhood retailer, very few shops are on the High street to be fair. This protects them from the main ravages of Town and City centre trading. Turnover down due to Divestments clearly shows they are still shedding the Newsagents to grow Convenience

[davro] 10/12/2019 09:30

Despite the positive spin Net debt has increased from £89.7m since 6 month interims ending 26th may 2019... let’s hope that reverses come the February preliminaries.

[spectoacc] 10/12/2019 08:07

Done that at a time of poor trading tho.

[imnotspartacus] 10/12/2019 07:59

Only paid 4m off their debt, not the best

[spectoacc] 10/12/2019 07:34

All very confident but still a slight miss:

"Jonathan Miller, Chief Executive, said:

"While 2019 has been another challenging year for the business, we have made good progress against our goals of operational stability and good retail execution. We are also pleased to confirm that we have continued to reduce net debt, with further progress anticipated due to our ongoing capital discipline.

"The fundamentals of the convenience channel are strong and we remain a resilient, profitable and cash generative business. We are confident in our plans to rebuild momentum in 2020, and look forward to providing a fuller strategy update at our Preliminary Results in February."

[hardupfedup] 09/12/2019 07:24

according to their website ta is tomorrow 10 /12

[loganair] 22/11/2019 14:00

Hopefully McColl's Q4 Trading update will be out in a couple of weeks as was out 3rd December last year, 2018.

[loganair] 02/11/2019 11:12

From Morrison's early October:

Morrisons is seeking to expand its convenience store presence in order to increase the size of its potential customer base. This has the potential to boost its financial performance, with the company forecast to deliver a rise in earnings of 7% in the next financial year.

Morrison's first attempt into convenience stores ended badly because they took on Blockbuster stores when they went bust, which were far too small, in the wrong place with onerous leases.

[aleman] 02/11/2019 10:23

BigTommy
1 Nov '19 - 15:02 - 1053 of 1061

Agree, 15% would be pretty easy. All depends if Morrisons want to go back into Convenience retailing, their first attempt didn't end that well. I suspect their small trial in McColls stores will take a while longer to be digested and understood if successful or not.

Morrisons have been experimenting continuously with convenience since they sold "Local" in 2015 and now have at least 3 different formats on trial. They opened their first owned "Daily" only 3 months after selling off "Local", and it's been opening them on and off since. It also has "Daily"s that are rebranded McColls-owned shops and it opened its first "Safeway Daily" back in March. It's perfectly obvious that Morrisons still wants to be in convenience but it's experimenting more cautiously to find the right formula, after going in too big and getting it wrong with "Local".

[kazoom] 02/11/2019 00:37

Always interested in what you say Jak as you often make some valuable points.

However, I think you are somewhat wide of the mark here.

When you say "It's an anachronistic symbol of a by-gone era." Are you actually aware of what they do? They are Tesco Express / Sainsbury Local, not Arkwright's (they do have some Arkwrights and some newsagents, but they are closing these down.)

Convenience is very hip and with it!

As for the debt and the relaxing of the covenants - you are aware I take it of what happened to them in early 2018? The failure of their primary supplier, so you are looking at the figures "peak crisis" but despite the strains on cash-flow they brought down debt, just not as fast as intended or as we would have liked.

I accept that the upside attractions of MCLS are not obvious at this stage, but I think the risk of "a zero" is pretty low barring some left field event.

[loganair] 01/11/2019 21:01

Hopefully McColl's will continue to pay down debt. One of the reasons why they reduced their dividend by so much and will most probably remain at 4p for the next couple of years.