Source - Alliance News

Shares in McColl’s Retail Group PLC more than halved in value early Monday after the indebted convenience store chain warned that its equity may be worthless.

McColl’s Retail shares were 53% lower at 2.08 pence each in London on Monday morning.

McColl’s is discussing a financing solution with commercial partner and lenders to resolve its short-term funding issues.

‘It should be noted that even if such a successful outcome is achieved it is increasingly likely to result in little or no value being attributed to the group’s ordinary shares,’ the company said.

For the current financial year ending in November, earnings before interest, tax, depreciation and amortisation will be no higher than the Ebitda of £20 million it posted in financial 2021, McColl’s said.

Meanwhile, the Brentwood, Essex-based firm explained it experienced softer trading than expected through the Easter period. It is seeking to mitigate product availability issues caused by supply chain disruption. Inflation pressures also hurt the company, it said.

Despite this, the company’s Morrisons Daily stores continued to perform strongly, delivering like-for-like sales growth of 20% compared to non-converted stores.

Due to the ongoing financing discussions, McColl’s expects to delay the release of its full year results beyond the end of May, the deadline under London listing rules. That would result in trading in its shares being suspended. Originally, McColl’s planned to publish its results in late March.

The company is undergoing changes. In February, it issued a profit warning. The following month, Jonathan Miller resigned as chief executive officer. He was replaced by Chief Operating Officer Karen Bird on an interim CEO basis.

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