StockMarketWire.com - Convenience store retailer McColl's Retail Group warned of lower than anticipated earnings after it continued to feel the impact of the collapse of wholesale supplier Palmer & Harvey.

The company also said a stronger performance in its tobacco division, relative to other categories, had resulted in a weaker conversion of sales to profits.

Adjusted Ebitda for the year ended 25 November was now expected to around £35m, it said.

In the currently financial year, adjusted Ebitda would be 'no more than a modest improvement' on the 2018 financial year, it added, citing labor cost pressures, efficiency investments and 'continued uncertainty for consumers'.

In the 2018 financial year, revenue fell 0.5% in the fourth quarter, but rose 8.3% for the full year thanks to acquisitions.

Like-for-like sales were flat in the fourth quarter, and were down 1.4% for the full year.

'It 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 Morrisons supply to 1,300 of our stores,' McColl's said.

'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.'



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