Conviviality Shares Suspended Following Financial Error
Conviviality, the owner of UK retail chains Wine Rack and Bargain Booze, has temporarily suspended trading on AIM - a sub-market of the London Stock Exchange.
The company announced today that it identified a payment due to HM Revenue & Customs of approximately £30 million, which is due on 29 March and has not been accrued for within cash flow projections.
It added that this has created a short term funding requirement, but that the board expects this will be 'satisfactorily resolved'.
Convivality has hired PwC to advise it on discussions with the revenue department, lending banks, credit insurers, suppliers and other creditors.
The drinks retailer said on Tuesday that it anticipates adjusted EBITDA for the current year to be approximately 20% below market expectations, confirming an expected range of £55.3 million - £56.4 million.
Last week, Conviviality issued a profit warning, after what it described as a 'material error' in the financial forecasts for its Conviviality Direct business.
The group has now confirmed that this was related to an arithmetic error in the compilation of the forecast.
In January, Conviviality reported that revenue increased by 9.2% in the first half its financial year, with EBITA up 1.7% to £23.3 million.
“We have made deliberate choices to successfully grow market share and enhance the quality of future earnings by agreeing long-term contracts with our larger customers and securing new national-account customers,” Diana Hunter, the business' chief executive, said at the time.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.