The collapse of Palmer & Harvey late last year was accompanied by a dramatic plunge in the share price of key customer McColl’s, but this week the City seized on signs the convenience group is finally shaking off its P&H hangover.

Shortly before the collapse, McColl’s had hit a four-year high at 290p per share, but the stock had plunged to a two-year low of 125p in late August.

Its shares defied this downward spiral this year, leaping 6.1% to 152p on Tuesday (4 September) despite announcing that same-store sales in the three months to 26 August 2018 slipped 0.9% due to the effects of subsequent supply chain problems.

The impact of P&H’s failure was already well-known to investors - shares tumbled 16% from 210p in mid-July upon the announcement of a 3% fall in like-for-like sales in the first half of 2018, before drifting to a 128p low last month. But warmer summer weather was beneficial to stem the downturn. Total sales for the period rose 0.6%, with sales for the first three quarters of the year up 12%, aided by the integration of 298 stores acquired in 2017.

The announcement that the completion of a new supply arrangement with Morrisons for 1,300 stores had been achieved ahead of schedule also drove fresh optimism this week.

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Analysts at Peel Hunt went so far as to say they expected McColl’s to now “rebuild its share rating” with a much more stable 12 months ahead.

The lessening influence of the P&H disruption saw Numis upgrade the chain to a buy rating. “With the supply chain disruption in the past, focus returning to retail execution and the opportunity presented by the Safeway brand, we see value,” it said.

Nevertheless, some highlighted that significant investment and profit downgrades earlier in the year meant question marks still remained.

McColl’s shares had edged up a further 3.3% to 157p by Thursday (6 September) lunchtime - taking its rise for the week to 12.1%.