Is McColl`s Facing Closure?

For Years, McColl's have long been the convenience store in the community of many local towns.

But a recent analysis of their financials suggests that they could be facing possible collapse.

News For You spoke to their public relations at head office, and they were unable to comment on any news of more store closures.

So far, in 2020, they have shut a massive 65 stores.

In their August statement, they made the following disclosure:

"This presentation does not constitute an invitation, offer to sell or any solicitation of any offer to buy or subscribe for any securities in the company or any of its subsidiaries or associated companies or its or their affiliates (the "group")."

While this statement is not a legal entity to invite buyers or acquisitions, McColl's are attempting to push back any concerns about the company's possible closure.

Further Analysis of their share price also indicates a decline in the company finances and its profitability.

Share price continues to fall

While their share price continues to fall, there seems to be no innovation to strengthen their current business.

When visiting their store in Hampden Park, Eastbourne trade seemed normal.

However, the concern for the 20,000 employees is what the company is not reporting.

With no real knowledge of what shareholders are getting in dividends and 82 million pounds of debt, McColl's future looks uncertain.

If firms pay out too much to the shareholders, then this places a firm into liquidity risk. This happens through not having enough cash reserves to manage any potential downturn.

While the big supermarkets have experienced considerable growth during COVID-19, footfall in McColl's has only seen marginal gains.

McColl's already carries a high number of working debt, meaning they are pushing for sales to clear their balance.

Although local lockdowns may increase customer flow during COVID-19, the bottom-line figure may not perform existing debt in the business.

The future and financial forecast for McColl's 20,000 staff members looks very unstable.

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