MCLS – Q4 and Full Year Trading Update

StockRank 85, Q53, V61, M97, Adventurous, Neutral, Dividend Yield fc 3.6%

  • Total revenue up 28.9% in Q4 and 19.1% for the full year following successful integration of 298 acquired convenience stores (completed in mid-July)
  • Full-year like-for-like (LFL) sales1 up 0.1%, with significant mix improvements as a result of growth in key grocery categories alongside declining traditional categories, split as follows:
    • LFL sales in convenience stores up 0.1%
    • LFL sales in newsagents down 0.2%
  • Total LFL sales down 1.1% in Q4 impacted by declining traditional categories and unfavourable weather
  • LFL sales in recently acquired and converted stores2 up 1.3% in Q4 and 2.4% for the full year
  • 25 convenience store refreshes successfully completed in H2, bringing the total to 27, with a further 100 planned in FY18
  • McColl’s is one of Subway’s fastest growing UK franchisees with 18 franchises now in operation
  • The Group remains on track to achieve results for the full year in line with management’s expectations

We were both sad and disappointed to learn that Palmer and Harvey (P&H) was placed into administration on 28 November 2017. P&H has been a long-time partner of the McColl’s business and we have been grateful through the years for their continuing support.

Opinion

Seems all priced in at the moment and a inline statement.   Gained 52% since buy in on the 9th December 2017, so held for a full year.   With a yield of 3.6% this is a stock worth holding onto but not worth topping up.   Cap/PTP 18x and Cap/PTP(fc) 13x.