Mccoll's Retail Share Discussion Threads

[davejones88] 04/3/2020 18:03

They have opened one in the north west but thats going to be it. There going to have to do alot of downing sizing when they pay off all the staff from 360 closure stores. Then the field teams like area managers etc will need reducing more redundancy costs on top of minimum wage increase with profit going down year on year.

[loganair] 04/3/2020 09:01

As far as I see McColl's are still taking on new stores, as reading local press they have taken on at least one new store this year.

In their latest financial report McColl's said they are refitting stores and will continue to do so, however any stores that are in their closure programme, around 330 stores, will obviously not have any money spent on them.

[paulcarrm9mx] 04/3/2020 06:51

Davejones88, yes you are right, logonair you are right about reducing stores to 1100 virtually all x coops are set to be converted to Morrisons and they aren't buying stores or refitting stores anymore they made the refitted teams redundant 18mnths ago have cut trading hrs and core hrs in stores in line with a possible Morrisons request because who actually reduces trading hrs if the company is getting back on its feet I'd say that would be impossible. You would actually increase trading hrs to get more money not reduce.

[davejones88] 04/3/2020 04:54

I think mccolls will be bought by morrisons when they have closed all stores that dont fit there requirements. They have stopped buying so dont see them buying 10 this year.

[loganair] 03/3/2020 18:03

p9 - Most of what I post is in the public domain, just takes a little time to research while a small proportion is my own opinion.

McColl's have said themselves they currently have around 1,450 stores and they hope to reduce this to an estate of c1,100 stores. McColl's have also said they are opening in the region of 10 new stores per year and that they are closing between 100 and 120 stores per year, therefore basic mathematics strongly suggests to me that it is going to take McColl's around 2 1/2 to 3 years from now until they have completed there store optimization plan.

Each year McColl's publishes the number of newsagents they currently have in their estate and all I do is to subtract this years number from last years number to give me the number of newsagents McColl's have closed during that year. Subtract this number form the total number of stores they have closed that same year then gives the number of non-newsagent stores McColl's have closed.

[aleman] 03/3/2020 14:53

I don't know how low these will go but they seem vastly undervalued to me and I keep having a little nibble at them. I think they'll pay back handsomely in time if we can avoid an opportunistic bid and decent management eventually takes hold.

[paulcarrm9mx] 03/3/2020 14:47

Logonair, you seem to have a amassed knowledge not publically circulated can you name your official source.

[loganair] 03/3/2020 10:51

With the sale of their HQ for £7.3mln and not paying a Final dividend for this financial year and foregoing dividends for the next financial year will bring in an extra £22mln for McColl's.

Hopefully most of this will go to pay down debt which will hopefully lead to year end debt being reduced from £94mln to around £80mln.

[dreambig123] 02/3/2020 18:39

Plus it can be worked out of Morrisons HQ.
Which is more likely to happen.. sooner than later.

[dreambig123] 02/3/2020 18:39

Plus it can be worked out of Morrisons HQ.
Which is more likely to happen.. sooner than later.

[loganair] 02/3/2020 17:55

The Cornonavirus could be a seismic change in people working from home similar to how the First World War was for Women's suffrage.

Companies may come to realise that actually they do not need huge head quarters as much of the work can be done by staff at home....thereby saving companies from needing such big HQ's with their staff saving huge amounts of money on transportation cost on not needing to travel to work.

[paulcarrm9mx] 02/3/2020 17:16

How will these company work without a head office.

[loganair] 02/3/2020 10:02

Liberum said McColl's "deserves credit" for the stabilisation achieved in 2019 and its ability to deliver on promises set out at the the time of the firm's interim results.

"The strategy is now more focused, and while it is early days, we are encouraged by some green shoots in H2," said the broker.

The analysts also said they weren't concerned by McColl's dividend suspension and stated the move was "sensible", while work continues to restore balance sheet health.

"A key risk to watch", the analysts said: "The shares have been harshly punished and we think the risks are now more than factored into the low valuation, which may re-ignite talk around McColl's as an M&A target."

Dividend aside, Liberum said it saw "several signs of encouragement" in the group's preliminary results, with recent trading moving into positive like-for-like territory despite the severe weather in the past couple of weeks.

Its adjusted full-year 2020 underlying earnings estimates increased marginally, based on a slightly more optimistic gross margin improvement. It also noted that McColl's net debt profile should fall quicker than previously, reflecting the dividend suspension and the group's imminent sale of its head office for £7.3m.

[wynmck] 28/2/2020 08:35

Liberum increases to BUY from Hold today

[spectoacc] 28/2/2020 07:30

Not the best day to release it, FTSE called -220 :)

"Completion of amendment and maturity extension to bank facilities

Having engaged with our banking syndicate in the latter part of 2019, the Company is pleased to announce that its bank facilities have been successfully amended and extended to a revised maturity date in May 2022. "

[paulcarrm9mx] 27/2/2020 16:57

I hope the news delivery goes to Convieance stores don't have the time dealing with issue

[loganair] 27/2/2020 15:40

McColl’s revealed that it plans shut as many as 330 stores over the next three or four years as it seeks to rationalise its estate to focus its activities in the faster-growing food convenience market.

This will mean further reductions to its chain of newsagents in favour of larger, convenience-focused stores.

[loganair] 26/2/2020 11:59

McColl's announces strategic change programme by Patrick Mitchell-Fox Senior Retail Analyst:

Performance sustained by stronger growth in alcohol, soft drinks and food-to-go while there was declines in some of its traditional over-indexing categories such as confectionery and news.

Food-to-go remains a small category as yet, but is gaining increased exposure as McColl's revamps its in-store offer and has significant potential for future growth as the range is extended. Boosted by the inflationary influences, tobacco, the retailer's single largest category (accounting for 39% of total sales) was also a significant contributor to the resilience of its sales.

Store optimisation targeted through right-sizing portfolio and clearer segmentation:

Key to improving the overall quality of the McColl's store portfolio will be a managed reduction in the numbers of stores from the current 1,443 to around 1,100 sheding over 300 net stores. This will involve not just the closure of stores but the strategic churning of the estate to shift under-performing locations and increase the average size of stores.

[loganair] 26/2/2020 11:51

I wonder how many of the "400-500 stores still required refurbishment" will become Morrison Daily's?

[loganair] 26/2/2020 11:08

The retailer is now looking to revamp its store estate, in what it calls a “customer-focused, medium-term strategic change programme addressing the opportunity of segmenting our store estate to better meet the needs of the communities we serve on a ‘neighbourhood by neighbourhood’ basis”.

The key initiatives of the change programme are said to be:

A revitalised customer offer, informed by better insight, addressing store segmentation, range development, space allocation and value positioning;

A fundamental reset of the operating model to make stores easier to operate and easier to shop, harnessing new technology, and offsetting continued inflationary pressures;

Enhancing the quality of the estate through accelerated store optimisation.

Proposed test stores will feature “optimised range, display and pricing and innovative food-to-go and last-mile delivery trials”.

400-500 stores still required refurbishment.

“Over the medium term, as a result of further divestments and net of future acquisitions, we anticipate an optimised estate of around 1,100 larger, more convenience-focused stores,” the company said.

[kinwah] 26/2/2020 11:06

Loganair, it is very similar to what French Connection are doing to reduce their UK retail estate. However what French Connection did last year was to spend part of their cash pile to bring forward some of the closures ahead of natural lease expiries. McColls has some very troublesome legacy stores probably on expensive leases (just like FC) where raising some cash and lancing the boil would be better overall for the business. Closure costs were over £9 million in this set of accounts alone so it is going to be a serious ongoing issue for McColls.

[loganair] 26/2/2020 10:10

Kin - This is exactly what McColl's are doing, closing 120 stores during 2019 when either their lease expires or there is a 'Lease Break, ' while opening 10 bigger convenience stores. By closing the stores at these times greatly reduces the cost to close the stores.

I would say McColl's have another 3 years of what they call store optimisation which I think is as quickly as they can do it.

[aleman] 26/2/2020 09:58

Underlying cashflow figures were surprisingly good. Operating cashflow preworking cap changes rose from £21m to £26m. Cash and equivalents rose £8.5m after drawing down £4m of bank borrowings. The predicted 2.7p final dividend would have been more than covered by cashflow had they chosen to pay it. They must have cut it to get some better deal with bankers over debt.

[loganair] 26/2/2020 09:48

After phase 2, a total of 30 stores, the report reads to me that at some point going forward more stores will become Morrisons Daily.

Once store optimisation is complete forecasting a 15% increase in average weekly sales per store with a 52% increase in average annual profit per store.