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Convivality Retail reports "solid year" as revenues rise on back of investments

Published:  11 May, 2015

Conviviality Retail, the owners of Wine Rack and Bargain Booze, said it was on track for a 'solid' year following investment and expansion of the business.

Conviviality Retail, the owners of Wine Rack and Bargain Booze, said it was on track for a 'solid' year following investment and expansion of the business.

In an interim statement this morning, the 600+ strong estate of franchised off-licensees and convenience outlets reported its EBITDA for was likely in have risen excess of £1m to £12.8m, with revenues 2.33% ahead of last year to £364m, up from £355.7m in 2014.

Chief executive officer Diana Hunter said 2014/15 had been a year of solid progress and she was pleased with what the business had achieved.

"The significant changes we have implemented over the last two years ensure we are well positioned to drive growth into the business and the board looks to the future with confidence," she said. "I would like to recognise the excellent collaboration of all of our employees, our Franchisees and Suppliers in helping drive this solid performance."

Wine Rack saw modest growth, with like for likes up 0.1%, but results at Bargain Booze fell 1.7%, although it said the underlying retail sales per store up 0.5%. reflected an improvement in the quality of the portfolio. In addition to brick and mortar sales, the Bargain Booze app, launched in December has seen strong growth, with more than 19,500 downloads and 23,000 redemptions.

The transition of the 36 former GT News stores to Jonathan James were progressing well, it said, and there were 21 additional stores that had been opened.

Analyst John Wilson of Zeus Capital said this was a positive endorsement of the financial rewards and support put in place by CVR for franchisees, who the company says can earn up to £14k per store more versus two years ago.

However, he noted that that although CVR's sales are expected to be slightly below its £373m forecast EBITDA was primed to be ahead of expectations.

The company today appointed Carol Savage to the new role as Chief Customer Officer. Carol has extensive brand and digital experience over a 20 year career working with brands including Exodus and Sara Lee.

It also announced the immediate appointment of former Sainsbury's and Homebase director Ian Jones to the board as a non-executive director and to the remuneration committee. Jones, who starts today, was the retail director at Homebase Ltd for nine years, also in charge of distribution and the supply chain. Prior to this he was on the operating board of Sainsbury's, where he was formats director for two years, heading up the store reinvigoration programme.

In January this year, the company reported half year profits profit before tax surging 46.7% to £3.2 million in the 26 weeks to 26 October 2014. EBITDA grew 9.1% to £4.2 million, with gross profit margin moving up by 1.7% to 9.5%.