McColls Retail Group today announced its intention to float on the London Stock Exchange. The convenience store and newsagent rushed ahead of as many as 15 other companies, including Appliances Online, Pets at Home and Boohoo.com, all thought to want to join the stock market. Combined, these retailers have a potential value of £6 billion.
Britain’s economic recovery appears to be underway, with consumer spending (which accounts for two-thirds of the UK’s economic activity), driving growth. In the third quarter spending rose 0.8% to its highest level since 2010.
The private equity owners of retail chains want a piece of this. McColl’s, which operates 1,276 stores across the UK, is planning to raise £50 million through the float to reduce its level of borrowings. The announcement arrives after McColl’s posted a 2.2% year-on-year sales rise to £870 million with profit rising to £211 million.
The group is aiming to extend its portfolio to around 1,350 stores – through acquisitions – by the end of 2016.
McColl’s has a potential value of £225 million and is owned by chairman James Lancaster and private equity firm Caird Capital. While the floatation is expected to be completed by the end of February, McColl’s are merely the first of many, so as an investor it may pay to be choosy.
