Convenience store giant McColl’s is the latest retailer to eye a float on the stock market, Retail Week has learned.
McColl’s is considering joining the pack of retailers seeking to conduct IPOs next year, sources familiar with the situation said. It would join retailers including AO.com, Poundland, Pets at Home and B&M Bargains, which are all seeking to float.
McColl’s bosses were said to have been encouraged to seek a listing when they saw the successful AIM flotation of Bargain Booze owner Conviviality Retail.
It is understood McColl’s chief executive James Lancaster is keen to pursue a listing of the 1,300-store retailer but may also consider a sale of the business.
The 1,300-store retailer, headed by Lancaster, runs newsagents as well as c-stores and is on a growth trajectory powered by its convenience arm. Last year the 700-branch convenience business overtook newsagents by store numbers and contributed two-thirds of operating profits. The aim is to have 800 c-stores by 2015.
The convenience retail sector is growing fast and is expected by industry body IGD to grow from £36bn now to ££46bn by 2018. Big grocers Tesco, Sainsbury’s and Morrisons are all seeking to extend their presence in the market and Arcadia tycoon Sir Philip Green is considering installing a convenience format in his BHS chain.
In its last financial year, McColl’s operating profit rose 15.3% to £15.8m and it successfully completed a £126.5 million debt refinancing. Sales rose 5% to £844.7m in the year to November 25, when like-for-likes rose 2.6% in the period.
The retailer rebranded its corporate name from Martin McColl Retail Group to McColl’s Retail Group earlier this year.