mccoll's

Shares in McColl’s plunged on Monday as the group lowered its profit forecast for 2018.

Previous estimates of full-year forecasts have lowered from £44 million to about £35 million.

The convenience store chain has blamed the collapse of wholesaler Palmer & Harvey for the downgraded profit forecast.

The wholesaler collapsed in January with debts of over £700 million.

Jonathan Miller, the chief executive of McColl’s, said: “2018 has been a very difficult year for the business, marked by unprecedented supply chain disruption and ongoing challenges.”

“Looking ahead, we expect competition in the grocery retail sector to remain intense and we face into significant cost pressures.”

“Important to our future success will be continuing to develop our partnership with Morrisons, alongside our plans to enhance our neighbourhood convenience offer by improving the quality of our estate and our overall customer experience,” he added.

The group said: “In the last 12 months, following the collapse of Palmer & Harvey, we have experienced significant supply chain disruption and have needed to accelerate the rollout of Morrison’s (LON: MRW) supply to 1,300 of our stores.”

“The speed of this transition has created significant challenges and severely disrupted our plans for the launch of Safeway. We are extremely grateful for Morrisons’ support during this period, and whilst the transition is now complete, we are continuing to experience a number of challenges. We are working together to address these issues and to develop an optimal range and promotional offer for the future.”

“In addition, a stronger performance in tobacco, relative to other categories, has resulted in a lower conversion of sales to profit than anticipated. As a result, we now expect adjusted EBITDA for FY18 to be around £35 million.”

In 2018, the chain has acquired 11 new convenience stores.

The share price plunged 24% to 90p shortly after the open on Monday. Shares in the group (LON: MCLS) are currently trading down 26.40% at 87.40p (0937GMT).