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Conviviality Retail (CVR)

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Monday 11 May, 2015

Conviviality Retail

Trading Update

RNS Number : 6983M
Conviviality Retail PLC
11 May 2015
 



11 May 2015

Conviviality Retail Plc

("Conviviality" or "the Company")

 

Trading Update

 

Full year results expected to be in line with market expectations

 

Conviviality Retail Plc (AIM: CVR), one of the UK's largest franchised off-licence and convenience store brands trading primarily under the Bargain Booze fascia, provides an update on trading for the year ended 26 April 2015.

 

This year has seen our strategy of revitalising our brands, Bargain Booze and Wine Rack, alongside infrastructure investment, gaining traction with customers and Franchisees. We are encouraged to report that revenues are expected to be above last year at approximately £364m (2013/14: £355.7m) despite the phasing of new store openings being later than expected in the year and the continued heavy discounting and competition in the market. EBITDA is expected to be slightly ahead of market expectations and we expect to end the year with cash in excess of £1.0m.

 

Retail sales are in line with last year, like for like retail sales for Bargain Booze stores were down 1.7%, with underlying retail sales per store increasing by 0.5%, reflecting an improvement in the quality of the portfolio. Wine Rack continues to show modest growth as we further develop this part of our business with like for like sales up 0.1%.

 

In February we acquired GT News (Holdings) Limited for £6m bringing an additional 37 stores into the group and later that month announced that the majority would be franchised to Jonathan James.  The transition of these stores to Jonathan James has progressed well.

 

One of our key objectives over the last year was to help our Franchisee partners to build more profitable and successful businesses. This is succeeding with 21 existing Franchisees opening additional stores and we have welcomed 35 new Franchisees into the Group. Our Franchisees now have the opportunity to earn £14,000 per store more than two years ago, through a consistent improvement in retail margin and the benefits of our award winning Franchisee share scheme. The Franchisee share scheme enables Franchisees to be awarded up to 3,500 shares per store for achieving annual standards targets. As a result we have a good pipeline of stores and opportunities to deliver during 2015/16.

 

To support our Franchisees further and to help them to attract and retain more customers we have also invested in our stores fascias, modernised our brands and become more connected with our customers through our use of social media and digital marketing. In April we piloted our Click and Collect service and our app, which launched in December 2014, has already achieved over 19,500 downloads and 23,000 redemptions, further strengthening our customer retention.

 

Developing and strengthening our management capability has been a key part of our strategy and during FY 2015/16 we will continue to build our marketing function. To this end, we have recently appointed Carol Savage as Chief Customer Officer, a newly created role within the Company. Carol has extensive brand and digital experience over a 20 year career working with brands including Exodus and Sara Lee.

 

Diana Hunter, Chief Executive Officer of Conviviality, said:

"2014/15 has been a year of solid progress for Conviviality and we are pleased with everything that has been 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. I would like to recognise the excellent collaboration of all of our employees, our Franchisees and Suppliers in helping drive this solid performance."

 

The Company will announce its Preliminary Results on 13 July 2015.

 

Enquiries:

 

Conviviality Retail Plc

Diana Hunter, Chief Executive Officer

Andrew Humphreys, Chief Financial Officer

 

Tel: 01270 614 700

Zeus Capital (NOMAD & Joint Broker)

John Goold / Nick Cowles / Andrew Jones

 

Tel: 020 7533 7727

Panmure Gordon (Joint Broker)

Andrew Godber

 

Tel: 020 7886 2500

FTI Consulting

Jonathon Brill / Alex Beagley / Tom Hufton

Tel: 020 3727 1000

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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