Conviviality Retail predicts full-year earnings to beat expectations

By Gemma McKenna

Published: 07 May, 2014

Franchised off-licence group Conviviality Retail forecasts full year earnings to be slightly ahead of expectations despite flat sales at Bargain Booze for the 52 weeks to April 27.

The chain, which also owns Wine Rack, and which yesterday acquired 26 Rhythm & Booze stores, said the business performed well over Easter, with sales up 2.2% at Bargain Booze and 6.5% at Wine Rack for the six weeks to April 27.

While like for like retail sales for Bargain Booze stores were flat for the 52 weeks to April 27, average sales per store increased by 3.2% "reflecting an improvement in the quality of the portfolio", the group said. "Our franchisees have benefited in the last year both from an increase in their margins and from an additional cash incentive. This was introduced to improve their profitability and encourage further growth within the group," it added.

Wine Rack, which was acquired by Conviviality on September 2, 2013, saw like for like retail sales in the second half increasing by 1.4%, a 2.9% improvement versus the first half.

The business continues to benefit from positive cash flow and had a net cash balance of £9.7 million at April 27, 2014. Full year results will be announced on July 14, 2014.

Former Direct Wines' chief financial officer Andrew Humphreys will take up the same role on the Conviviality board from June 16. Humphreys has held senior finance roles in the retail sector at Shop Direct and Carphone Warehouse, and has worked at Direct Wines for the past four years. Julie Wirth is leaving the business for personal reasons.

Diana Hunter, chief executive of Conviviality said: "We are pleased with both the Easter trading performance, which was particularly strong, and the delivery of solid full year like for like performance through a period of considerable change for the business. Like-for-like growth was notably encouraging in the key trading periods through the year.

"Wine Rack has been integrated successfully and demonstrates improving levels of performance under Conviviality ownership in the second half of the year."

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