Shares in McColl’s Retail Group PLC (LON:MCLS) have crashed on Wednesday afternoon as the firm gave shareholders a disappointing update.

The retail firm noted that it had swung to an annual loss, as revenues across stores had declined. Additionally, the firm added that store closures had lead to a suspension in final dividend.

Within their financial year, which ended on November 24 – the firm posted a pretax loss of £8.6 million compared to a pretax profit of £7.9 million one year ago.

McColl’s said that this was largely due to a one-off, non cash goodwill impairment of £98.6 million.

Revenues also declined by 1.8% to £1.22 billion from £1.24 billion, as like for like sales remained flat. On an adjusted basis, pretax profit slumped by 30% to £7.3 million from £10.5 million.

As a result, McColl’s have declared that their total dividend will be 1.3p, down from the 4p figure a year ago.

Jonathan Miller, Chief Executive, said:

“We have stabilised the business and refocused on retail execution in 2019, in line with our key priorities for the year. Against challenging trading conditions we have made good operational progress, whilst reducing debt and making appropriate levels of investment.

Looking ahead to FY20, we are embarking on a strategic change programme, refining our model and better tailoring our offer to the customers and communities we serve, using the learnings to build the foundations for future growth.

The fundamentals of the convenience sector remain strong and, with our improving customer proposition, I am confident in delivering sustainable returns for shareholders over the long term.”

Testing waters for McColl’s

In December, the firm gave shareholders a cautious outlook following a slow period of trading.

McColl’s guided for adjusted earnings before interest, taxes, depreciation, and amortisation for the 52 weeks to November 24 of £32 million, “marginally” below expectations. It blamed this on softer second-half conditions due to unseasonable weather and dampened UK consumer confidence.

Annual revenue declined 1.9% mainly due to store sales, as like-for-like sales flat after a 1.4% fall in the prior year.

“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,” said Chief Executive Jonathan Miller.

From the previous update, it seems that McColl’s had already prepared shareholders for today’s results. The performance of the firm does allude to a wider issue on the British High Street, which many firms seem to be falling victim to.

Shares in McColl’s trade at 37p (-14.07%). 26/2/20 12:21BST.