Bargain Booze owner hails profit surge14th July, 2014 by Gabriel Savage
Conviviality Retail, owner of UK convenience store brands including Wine Rack and Bargain Booze, has outlined “a significant opportunity” for its business as the company reported a 31.5% increase in pre-tax profits last year.
Announcing its preliminary results for the year to 27 April 2014, the franchise owner revealed that pre-tax profits rose from £7.1 million to £9.3m, boosted by the disposal of underperforming stores and acquisition of the Wine Rack chain.
The group became a publicly listed company in July 2013, a move which it explained had provided “a more strategic platform” and “appropriate capital structure” for development.
Hailing “strong results achieved during a period of significant change”, Conviviality CEO Diana Hunter confirmed that the company was making “good progress to deliver our strategy.”
In particular, she noted: “We are seeing the benefits of a stronger relationship with our franchise partners, and many of our franchisees have seen their profits improve as a result.
“We have a significant opportunity ahead and we are confident that the foundations we have put in place this year will deliver further improvements for our Company, our Franchise partners and investors.”
The 22 Wine Rack shops acquired by Conviviality in August last year enjoyed “particularly pleasing” Christmas and Easter trading performances, when like-for-like sales increased by 21.8% and 6.4% respectively.
The group stressed the importance of this portfolio addition as having “significantly increased our credibility and capability in wine, accelerated our expansion into the south and provided a new fascia for growth.”
A further part of this credibility drive saw the company appoint former Waitrose buyer Susan McCraith MW as a consultant to its team in May last year with the task of carrying out a review of its range.
As a counterbalance to its Wine Rack purchase, the group closed 62 stores last year in a drive to improve the quality of its estate portfolio, which ended the year at a total of 595 outlets. Confirming that it had now “concluded the bulk of our store closure plan”, Conviviality Retail also highlighted an average weekly sales increase per store of £430.
Since its year-end, the group has already added North East Convenience Stores to its franchise collection, highlighting this region of the UK as “an area where we have identified further growth opportunities.”
The last two months have also seen the company invest £1.8m to buy 31 Rhythm and Booze stores. The same period also saw developments in the south of England, with new stores opening in Ramsgate, Stevenage, Broxbourne and Leighton Buzzard.
Looking ahead, the group picked out the North East, Yorkshire and the South of England as “priority locations for growth”. It also set out targets to “improve Wine Rack’s online presence, develop Click and Collect and a Bargain Booze App, trial a new larger format store and update the fascias across our existing estate through Operation Spring Clean.”