McColl’s has confirmed that a takeover bid to buy the company has been withdrawn, with other parties looking to buy different parts of the business.
The board is continuing to search for a new financing solution, which it believes will be found with its existing partners and stakeholders, but notes that it has other alternatives available.
The Scottish convenience store chain confirmed that it was working through £97m of debt difficulties with lenders, seeking a long-term agreement in relation to the balance of its facility.
The group confirmed that it received a necessary agreement to roll forward its financial covenant test periodically and continues to receive credit support from key partners to enable these discussions.
McColl’s believes it will find a financing solution that involves its existing stakeholders, with a further update to be made following conclusion of the talks.
In September, the group completed a placing and open offer, raising net proceeds of £30m.
Two thirds of this was raised to accelerate the Morrisons Daily store roll-out, which it claims is on track.
At the end of the financial year, the group operated 185 Morrisons Daily stores, and this number has since increased to more than 200 stores in operation.
Morrisons Daily stores are delivering like-for-like sales growth that is at least 20% better than non-converted, comparable stores.
The store conversion programme re-commenced in early February, following a scheduled pause over the Christmas and New Year period.
So far, the group has opened 18 Morrisons Daily stores and a further seven will be converted this week with the full support of Morrisons. It remains on track to complete 450 Morrisons Daily store conversions by the end of 2022 financial year, aiming to reshape the business into a more profitable and sustainable model in the medium term.
The balance of these funds was to be used to enhance the group's working capital headroom. However, the trading shortfall in the second half of financial year 2021 absorbed this, driven by "product availability challenges".
McColl’s confirmed that, subject to audit, financial results for the 52-week period ended 28 November 2021, were in line with previous guidance. This includes revenues of £1.11bn compared to the 2020 year, at £1.25bn.
The business saw a decline in footfall due to the surge in Covid-19 cases relating to Omicron, particularly over the Christmas period, impacting trading. While demand has since picked up, revenues in the first quarter are behind expectations.
It also delivered two-year like-for-like sales growth of 5.9% in the 11 weeks to 13 February.
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