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Bargain Booze owner Conviviliaty boosted by wine sales

Published: 12:11 13 Jul 2015 BST

bargain-booze
Conviviality owns Bargain Booze and Wine Rack

Bargain Booze owner Conviviality Retail (LON:CVR) said pre-tax profit in the year to 26 April rose 4.4% boosted by an uptick in wine sales.

The owner of the UK’s largest franchised off-licence and convenience chain said pre-tax profit was £9.7mln while wine sales rose 10% during the year accounting for 15.4% of the group's total sales.

Sales of beer and ale also rose, and Conviviality said it introduced 280 new products last year, with 70 new premium bottles of ales and 20 craft beers.

Diana Hunter, chief executive called the results “strong” and said Conviviality will focus on increasing the number of franchisees in the group.

Total sales rose 2.4% to £364.1mln, however, like-for-like sales dipped 1.7% due to an uptick in competition from supermarkets.

Broker Panmure Gordon said the full year results were broadly in line with expectations.

It added that in 2016, forecasts suggest a pre-tax profit of £11mln, with 47 new stores and flat like-for-like sales.

Last week trading of the company’s shares were suspended following the news that Conviviality is in merger talks with Matthew Clark, the UK’s biggest drinks wholesaler.

The much bigger Matthew Clark, which is 50% owned by Punch Taverns (LON:PUB), racked up sales of £800mln and made profit of £25mln.

Australian private equity group CHAMP owns the other half of Matthew Clark, having purchased its stake from Constellation Brands in 2011.

The original joint venture between Punch and Constellation in 2007 valued Matthew Clark at around £120mln, but reports suggest the sale price this time around could be roughly £200mln.

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