Conviviality shows healthy balance sheet

Conviviality Retail has posted full year pre-tax profits of £9.7 million, a 4.4% rise “slightly ahead of expectations”, as the group negotiates a major deal to buy Matthew Clark.

Revenue for the UK wholesaler and retailer, which owns brands including the Bargain Booze franchise chain, rose by 2.4% in the 52 weeks to 26 April, hitting £364.1 million.

The figures follow a recent period of expansion for the business, which earlier this year added 37 new stores in a £6m deal after buying the Rhythm and Booze chain in 2014.

In total, Conviviality now holds 624 stores around the UK and has identified the north-east, Yorkshire, the south-west and Scotland as “priority areas” for further expansion.

The group has also been working on its product range, adding over 280 new lines in the last year to create an “unrivalled” beer range of over 70 premium bottled ales and more than 20 craft ales, a focus on “the growing trend for premium and flavoured spirits”, and wine sales that, under the guidance of Susan McCraith MW, are currently growing by 10% year-on-year.

While this latest report points to a company in good shape, the acquisition of UK on-trade supplier Matthew Clark, which is thought to be valued at around £200m, would be a transformative investment, both in terms of expansion and diversification beyond Conviviality’s core franchise business model.

Nevertheless, Conviviality Retail CEO Diana Hunter insisted “Franchisees will remain at the heart of our business, as we continue to work together to blend the entrepreneurial skill of the franchisee with the branding, ranging and wholesale expertise of Conviviality.”

Looking ahead, she outlined a plan “to further leverage our wholesale capability into new markets”, noting: “As wholesaler to our franchisees we have built strong relationships with our suppliers and understand the dynamics of this market.”

Highlighting corporate accounts as a particular target, Hunter continued: “By operating a delivered wholesale model we can serve a diversity of customers and build our wines and spirits volumes further. These higher volumes offer complementary sources of trade which further strengthen our core business.”