McColl's Retail Group (LSE:MCLS) warned on profits and delayed its full-year results as it seeks emergency capital to resolve "short-term funding issues".
Looking to avoid a collapse, the UK convenience store chain said it is in "active discussion with its key commercial partners [Morrisons] and lenders" to resolve short term funding issues.
McColl's admitted that while the funding would "create a stable platform for the business going forward", even if this is achieved "it is increasingly likely to result in little or no value being attributed to the group's ordinary shares".
The shares plummeted 50% to 1.97p in early trading on Monday.
Underlying earnings (EBITDA) for the current financial year were reported to be roughly the same as last year, around £20mln, as a decline in consumer spending, "weak" Easter performance, and supply chain disruption have impacted performance.
On the plus side, the group's Morrisons Daily stores continue to perform strongly, delivering like-for-like sales growth that is at least 20% better than non-converted, comparable stores.
So far in the financial year, 69 Morrisons Daily stores have been opened, with the company stating the move to convert stores "is fundamentally reshaping the business into a more profitable and sustainable model".