Struggling convenience store group McColl’s has posted declining profits and sales figures and confirmed it is in discussion with lending banks about a new debt facility.

In its preliminary results for the 52 weeks to November 24, 2019, McColl’s adjusted profit before tax slumped to £7.3m from £10.5m, and total sales were down 1.8% to £1.22bn, which was due to store closures and divestments.

McColl’s said that total like-for-like sales during the period were flat and that adjusted EBITDA had fallen to £32.1m, which reflected “softer market conditions throughout the summer”.

The retailer also confirmed that it was in discussion with its lending banks about amending and extending its existing line of credit, and said it expected an announcement shortly.

The convenience store group also provided a current trading update for the 11 weeks to February 9, which it said had been “encouraging”.

Like-for-like sales for the period had inched up 0.5%, but total sales had decreased 4.2% due to the “annualisation of the ongoing store optimisation programme”.

McColl’s said 2020 will be “a transitional year” with the implementation of its strategic change programme, which will look to revitalise the customer offer, reset the retailer’s operating model and enhance the quality of its store estate.

Chief executive Jonathan Miller said: “We have stabilised the business and refocused on retail execution in 2019, in line with our key priorities for the year. Against challenging trading conditions, we have made good operational progress, while reducing debt and making appropriate levels of investment.

“Looking ahead to FY20, we are embarking on a strategic change programme, refining our model and better tailoring our offer to the customers and communities we serve, using the learnings to build the foundations for future growth.

“The fundamentals of the convenience sector remain strong and, with our improving customer proposition, I am confident in delivering sustainable returns for shareholders over the long term.”

McColl’s to close more than 300 stores over next four years