Conviviality faces £30m tax bill

Following on from profit warnings earlier this month, UK drinks wholesaler Conviviality has now announced it faces a £30 million tax bill and has suspended trading in its shares.

In a statement issued today (14 March), the owner of Bibendum PLB and Matthew Clark, stated that it had, “identified a payment due to HM Revenue & Customs of approximately £30.0 million which falls due for payment on 29 March 2018 and which has not been accrued for within its short term cash flow projections. This has created a short term funding requirement.”

At the beginning of the month the company had admitted it was facing a profit shortfall of £5.2m, which it blamed on “material error”.

The report caused share prices to plummet 68%, wiping some £300m off the company’s value.

Yesterday (13 March), Conviviality then issued another statement that its new expected EBITDA was £55.3-£56.4m yet added that, “to the extent that the current situation creates operational difficulties, this may negatively impact the adjusted EBITDA range.”

The company reiterated that it was still in compliance with its banking covenants, the next test of which are due on 29 April this year.

Conviviality added it “expected” its net debt to remain approximately £150m at that time.

It added: “The Company has engaged PwC to assist it in its forthcoming discussions with HM Revenue & Customs and its key stakeholders including its lending banks, credit insurers, suppliers and other creditors, as well as to determine the potential impact of any resulting funding requirement on the Company’s adjusted EBITDA expectation and compliance with its banking covenants. Following preliminary advice received from PwC, whilst there can be no guarantee, the Board believes this short term funding requirement will be satisfactorily resolved.”

Finally, it noted that it had applied for the suspension of the company’s ordinary shares on AIM, which took effect from 7.40am today. A further statement is expected in due course.

2 Responses to “Conviviality faces £30m tax bill”

  1. Bbd says:

    Wasn’t Diana Hunter ‘Woman of the Year’ last year? Someone get her a new abacus – how on earth do you miss a £30m tax bill in your accounting? Paying the tax man first is basic business.

  2. Charles says:

    Looks like a re-run of when Matthew Clark came unstuck in 1997 when another wizzard Peter Aitkens suddenly lost the ‘golden touch’ My thoughts are will the ordinary guys and girls in all of this mess!

Leave a Reply to Bbd Cancel reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Brand and Marketing Manager

New Generation Wines
London, UK

On-Trade Regional Sales Manager

Anthony Byrne Fine Wines
West Midlands & Northants

Logistics Team Leader

Speciality Drinks
London, UK

London Account Manager

Speciality Drinks
London, UK

Key Account Executive

Berkmann Wine Cellars
London, UK

Assistant Operations Manager

Speciality Drinks
London, UK

National Account Manager

Berkmann Wine Cellars
London, UK

Sales - Global Wine Competitions

The Drinks Business
London, UK

London Business Development Manager

Vine Distribution Services
Chelmsford, UK

Customer Services Administrator

Speciality Drinks
London, UK

The International Food and Drink Event 2019

London,United Kingdom
17th Mar 2019

Prowein 2019

Düsseldorf,Germany
17th Mar 2019

Vinitaly 2019

Verona,Italy
7th Apr 2019
Click to view more

The Prosecco Masters 2019

Deadline : 22nd March 2019

The Global Sparkling Masters 2019

Deadline : 25th March 2019

Click to view more

The Global Riesling Masters 2018

View Results

Rioja Masters 2018

View Results

Click to view more