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3 years ago
UPDATE 2-McColl's first-half comparable sales rise, COO quits
July 22, 2014 / 6:57 AM / 3 years ago

UPDATE 2-McColl's first-half comparable sales rise, COO quits

3 Min Read

* Like-for-like sales rise 2.1 pct

* Declares interim dividend of 1.7p/shr

* Says COO Martyn Aguss resigns

* Shares up 1.2 pct (Adds CEO, analyst comments; updates share movement)

By Aastha Agnihotri

July 22 (Reuters) - British convenience store and newsagent operator McColl's Retail Group Plc, which went public in February, said first-half like-for-like sales rose 2.1 percent, helped by store conversions and improved product ranges.

The retailer said total sales rose 3.6 percent to 444.2 million pounds ($758.6 million) in the 26 weeks ended May 25.

"This reflects its attractive convenience sub-sector and self-help from store conversions and acquisitions, contrasting sharply with pressures across the broader food retail industry," Numis analysts said in a note.

The brokerage has a "buy" rating on the stock with a target price of 220 pence.

McColl's shares were up 1.2 percent at 170 pence on the London Stock Exchange at 0937 GMT. The stock has fallen about 10 percent since it listed on Feb. 25.

Britain's big four grocers - Tesco Plc, Wal-Mart Stores Inc's Asda, J Sainsbury Plc and WM Morrison Supermarkets Plc - are increasingly pushing into the convenience store sector as their sales fall.

Tesco reported a 3.8 percent fall in first-quarter like-for-like sales, its worst quarterly performance for 40 years, while Morrison posted a 7.1 percent slump.

The big chains have been squeezed by discounters as well as high-end grocery chains, while chains such as McColl's focus on setting up in residential areas to be closer to customers. The stores also include services such as Post Office.

"The major differentiation for us is that we site our stores in neighbourhoods as opposed to high streets, so we are a neighbourhood convenience chain," Chief Executive James Lancaster, who founded McColl's in 1973, told Reuters.

McColl's strategy includes converting newsagents into convenience stores. Convenience stores account for about 70 percent of the company's sales and profit.

McColl's ended the first half with 747 convenience stores in the UK and 544 newsagents. It has a target of 1,000 convenience stores by the end of 2016.

McColl's said on Tuesday that Chief Operating Officer Martyn Aguss had resigned for personal reasons and that Dave Thomas, currently operations director, would take the job.

The company also said that John Coleman, currently deputy chairman, would become non-executive chairman.

The company announced an interim dividend of 1.7 pence per share. ($1 = 0.5855 British pounds) (Reporting by Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier)

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