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Conviviality builds ‘virtuous circle’ of supply and customer
Conviviality is “increasingly attractive” to suppliers and customers as it continues to make progress towards becoming a multi-channel operator, market analysts Shore Capital has claimed.
Diana Hunter, Conviviality CEO (Photo: Conviviality)
Speaking after Conviviality’s investor meeting yesterday, Shore Capital analyst Phil Carrol said the team has built a “virtuous circle” for customers and suppliers, which was likely to prove an increasingly attraction proposition for both, given the increased scale, expertise and footprint of the business.
He pointed out that following its acquisition of Matthew Clark last year, and Bibendum PLB in May, there was a “significant cross-selling opportunity” between the two new business, as Matthew Clark and Bibendum had a very low overlap, only 3%, of customers.
He noted the “considered approach” the team was taking to integrating the business, both from a customer point-of-view, and from a logistics and distribution standpoint, and said the new business that both Matthew Clark and Bibendum had attracted since the acquisition by Conviviality was “reassuring”.
Carroll said he was positive about the prospects and progress delivered by Conviviality to date, pointing out the weakness of sterling was likely to have less of an impact on Conviviality than some of its competitors and was therefore “not material”.
“Clearly, the business has changes considerably in the past year, but the rationale for doing so is strong in our opinion and becoming increasingly visible,” he said. “We believe the company is now well-position to drive strong growth in profitability in the short to medium term.”
The retailer is likely to release further details of internal developments and its strategic plan at an event on 2 November.
In May, the business reported group sales up 137% in the 12 months to 1 May 2016 (prior to its £60m acquisition of the Bibendum PLB Group). Sales rose to £864m from £364m over the period, which it attributed to strong trading across the retail business, as well as the acquisition of Matthew Clarke in October.
Since the two acquisitions, the company has risen to controls the alcoholic drinks supply for as much as 8% of the UK on-trade, according to CEO Diana Hunter