DB:2M2

Stock Analysis Report

Executive Summary

McColl's Retail Group plc operates as a neighborhood retailer in the United Kingdom.

Rewards

PE ratio (7.5x) is below the German market (21.1x)

Risk Analysis

Earnings have declined by -5.22% per year over past 5 years

Interest payments are not well covered by earnings

Unstable dividend track record

Profit margins (0.5%) are lower than last year (1%)

+ 1 more risk


Snowflake Analysis

Average dividend payer and fair value.

Share Price & News

How has McColl's Retail Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2M2 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.5%

2M2

1.4%

DE Consumer Retailing

1.7%

DE Market


1 Year Return

-8.3%

2M2

1.3%

DE Consumer Retailing

15.0%

DE Market

Return vs Industry: 2M2 underperformed the German Consumer Retailing industry which returned 1.3% over the past year.

Return vs Market: 2M2 underperformed the German Market which returned 15% over the past year.


Shareholder returns

2M2IndustryMarket
7 Day3.5%1.4%1.7%
30 Day-2.6%1.5%0.8%
90 Day0.8%0.7%3.7%
1 Year-5.8%-8.3%5.3%1.3%18.5%15.0%
3 Year-71.0%-74.6%5.5%-5.0%17.1%6.9%
5 Year-70.0%-76.7%9.4%-7.3%24.3%7.3%

Price Volatility Vs. Market

How volatile is McColl's Retail Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is McColl's Retail Group undervalued compared to its fair value and its price relative to the market?

7.52x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 2M2 (€0.53) is trading above our estimate of fair value (€0.48)

Significantly Below Fair Value: 2M2 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 2M2 is good value based on its PE Ratio (7.5x) compared to the Consumer Retailing industry average (21x).

PE vs Market: 2M2 is good value based on its PE Ratio (7.5x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2M2's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2M2 is good value based on its PB Ratio (0.4x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is McColl's Retail Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

0.6%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if 2M2's forecast earnings growth is above the savings rate (-0.4%).

Earnings vs Market: Insufficient data to determine if 2M2's earnings are forecast to grow faster than the German market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2M2's revenue (0.6% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: 2M2's revenue (0.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 2M2's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has McColl's Retail Group performed over the past 5 years?

-5.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2M2 has high quality earnings.

Growing Profit Margin: 2M2's current net profit margins (0.5%) are lower than last year (1%).


Past Earnings Growth Analysis

Earnings Trend: 2M2's earnings have declined by -5.2% per year over the past 5 years.

Accelerating Growth: 2M2's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2M2 had negative earnings growth (-45.5%) over the past year, making it difficult to compare to the Consumer Retailing industry average (-0.7%).


Return on Equity

High ROE: 2M2's Return on Equity (4.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is McColl's Retail Group's financial position?


Financial Position Analysis

Short Term Liabilities: 2M2's short term assets (£151.1M) do not cover its short term liabilities (£229.0M).

Long Term Liabilities: 2M2's short term assets (£151.1M) exceed its long term liabilities (£134.0M).


Debt to Equity History and Analysis

Debt Level: 2M2's debt to equity ratio (86.6%) is considered high.

Reducing Debt: 2M2's debt to equity ratio has increased from 42.1% to 86.6% over the past 5 years.

Debt Coverage: 2M2's debt is well covered by operating cash flow (30.1%).

Interest Coverage: 2M2's interest payments on its debt are not well covered by EBIT (1.9x coverage).


Balance Sheet

Inventory Level: 2M2 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2M2's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is McColl's Retail Group's current dividend yield, its reliability and sustainability?

9.02%

Current Dividend Yield


Dividend Yield vs Market

company9.0%marketbottom25%1.3%markettop25%3.6%industryaverage3.7%forecastin3Years7.1%

Current dividend yield vs market & industry

Notable Dividend: 2M2's dividend (9.02%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: 2M2's dividend (9.02%) is in the top 25% of dividend payers in the German market (3.59%)


Stability and Growth of Payments

Stable Dividend: 2M2 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2M2's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.2%), 2M2's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2M2's dividends in 3 years are forecast to be well covered by earnings (32% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Jonathan Miller 0

3.8yrs

Tenure

UK£591,000

Compensation

Mr. Jonathan Miller, FCA, has been the Chief Executive Officer at McColl's Retail Group plc since April 01, 2016 and was its Secretary. Mr. Miller served as the Chief Financial Officer at McColl's Retail G ...


CEO Compensation Analysis

Compensation vs Market: Jonathan's total compensation ($USD769.11K) is above average for companies of similar size in the German market ($USD412.37K).

Compensation vs Earnings: Jonathan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Miller
CEO & Executive Director3.8yrsUK£591.00k10.11% £6.2m
David Thomas
Consultant0.08yrsUK£356.00k1.03% £630.6k
Robbie Bell
CFO & Director1.1yrsno datano data
Naomi Kissman
Head of Investor Relations0yrsno datano data
Karen Bird
Colleague Director3.3yrsno datano data
Richard Crampton
Chief Commercial Officer1.1yrsno datano data
Rachel Peat
Company Secretary1.3yrsno datano data

1.2yrs

Average Tenure

Experienced Management: 2M2's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jonathan Miller
CEO & Executive Director3.8yrsUK£591.00k10.11% £6.2m
Robbie Bell
CFO & Director1.1yrsno datano data
Sharon Brown
Independent Non-Executive Director6yrsUK£57.00k0.015% £9.3k
Angus Porter
Non-Executive Chairman2.8yrsUK£147.00k0.0050% £3.1k
Georgina Harvey
Senior Independent Director3.8yrsUK£58.00k0.0091% £5.6k
Jens Hofma
Independent Non-Executive Director2.6yrsUK£46.00kno data

3.3yrs

Average Tenure

52.5yo

Average Age

Experienced Board: 2M2's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

McColl's Retail Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McColl's Retail Group plc
  • Ticker: 2M2
  • Exchange: DB
  • Founded: 1973
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: UK£51.088m
  • Listing Market Cap: UK£61.366m
  • Shares outstanding: 115.19m
  • Website: https://www.mccollsplc.co.uk

Number of Employees


Location

  • McColl's Retail Group plc
  • McColl's House
  • Ashwells Road
  • Brentwood
  • Essex
  • CM15 9ST
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCLSLSE (London Stock Exchange)YesOrdinary SharesGBGBPFeb 2014
MCLSLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPFeb 2014
2M2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2014

Biography

McColl's Retail Group plc operates as a neighborhood retailer in the United Kingdom. The company operates convenience and newsagent stores that offer fruits and vegetables, milk, chilled foods, alcohol, confectionery, tobacco and e-cigarettes, canned and packaged grocery, soft-drinks, non-food, household, hot food-to-go, and newspapers, as well as provides post office and ATM services. As of November 26, 2017, it operated 1,611 neighborhood stores, including 1,279 McColl's branded convenience stores and 332 Martin’s branded newsagents stores in England, Scotland, and Wales. The company was founded in 1973 and is headquartered in Brentwood, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 22:14
End of Day Share Price2020/02/17 00:00
Earnings2019/05/26
Annual Earnings2018/11/25


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.