Conviviality half-year profits up by 285%
Christmas provided an extra boost for UK drink company Conviviality, after it reported soaring half-year profits, up 285%.
The drinks distributor this morning reported a 6.1% boost to group sales in November and December, with a 2.1% increase in like-for-like sales in the six weeks to 1 January. All three of its business units saw growth with Conviviality Retail sales increasing 6.9%, with like-for-like sales over the festive period up 2.1%. Conviviality Direct, which covers the on-trade, saw sales grow 6.2%, with its events division, Conviviality Trading, also up 3.1%.
The festive trading was included in the company’s half-year results, which showed profits up 285% to £7.4 million in the first half of the year. It follows a trading update issued on 1 November.
Revenue in the 26 weeks to 30 October also grew strongly, up 211% to £782.5 million, following the company’s acquisition of the Bibendum PLB Group, Peppermint and Matthew Clark, it said.
In the half year, adjusted EBITDA was also up 252%, with adjusted profit up 295%, and gross margin also rising, up 2.5% points to 12.5%. Net debt at 30 October 2016 was £138.4 million, up from £86.1m before the Bibendum PLB acquisition.
The company reported sales 4.4% above the previous period, and said all of its new business unit – Conviviality Direct, Conviviality Trading and Conviviality Retail – were “trading well”.
It also reported a boost in the number of outlets served in the period, up 1.5%, with sales per outlet growing 3.8%.
The group’s on-trade division, Conviviality Direct, saw sales up 5.2% to £515 million, with outlet coverage up 1.5% and sales per outlet up 3.8%. The number of customers using its digital platform was also up 34% it said, while analysis of the outlets served by Mathew Clark and Bibendum showed there was only a 3%overlap, indicating “a significant growth opportunity for both Mathew Clark and Bibendum” to support our customers, it said.
Conviviality Retail, which includes its franchised off-license business and retail stores, under the Bargain Booze, Bargain Booze Select Convenience and Wine Rack fascias, saw a 2.5% increase in sales, but franchisee like-for-like sales fell 1.7% on the back of unfavourable comparables (a strong summer 2015 marketing campaigns with higher discounts), although margin was up 1.8%. It also noted a slight slow-down in the number of franchisees opening – the estate fell from 716 to 702 stores – arguing “the focus will always be on quality outlets as opposed to quantity”.
Meanwhile Conviviality Trading, which covers its events business, saw a 5.1% sales boost, with events sales up 46%. The company also highlighted the acquisition of a number of key brands, including Santa Rita and Luis Felipe Edwards.
CEO Diana Hunter said the strong results demonstrated the company’s competitive advantage, the development of its broad customer base and “the robust nature of Conviviality as the UK’s leading drinks wholesaler, distributor and solution provider”
“The recent acquisitions have resulted in Conviviality being well positioned in its market with a resilient business model that provides unique positioning for its suppliers and customers. We are also pleased to report that the Group continues to trade in line with expectations for the full year,” she said.