Conviviality Retail’s share price climbs as it reveals boost to sales from Matthew Clark takeover as champagne and prosecco sales leap
A strong Christmas has powered drinks company Conviviality Retail over the first half, with the Bargain Booze and Threshers group increasing its interim dividend.
The figures
The business, which completed its acquisition of wholesaler Matthew Clark in October, said group revenues jumped 38 per cent to £252m for the 27 weeks to 1 November.
EBITDA was up 43 per cent to £6.5m, while group profit before tax and exceptionals was up 2.8 per cent. Gross margins climbed 0.5 percentage points to 10 per cent.
The business went from holding net cash of £1.2m to net debt of £98.5m as a result of the Matthew Clark takeover. Conviviality said its integration of the business was "ahead of plan".
Retail sales were up 0.8 per cent over the period, with like-for-like declines narrowing to 1.3 per cent. EBITDA is in line with last year at £4.5m.
A strong Christmas helped the overall business deliver on its targets, with champagne and sparkling wine sales up 31 per cent, with four bottles of prosecco sold every minute during its peak trading week. Premium bottles of ale were up 300 per cent, while cases of craft ales were up 218 per cent.
All that means Conviviliaty has increased its interim dividend by five per cent, ahead of earnings, to 2.1 pence per share.
Conviviality's share price rose 3.3 per cent on the news.
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Why it's interesting
The company is part way through a "transformational" year, following on from the acquisition of Matthew Clark, which has made Conviviality the UK's biggest delivered drinks wholesaler.
The acquisition is hoped to help "maximise distribution potential across all drinking occasions, in home and out of home, across a deeper product portfolio", chief executive .Diana Hunter said. The combined group will look to make the most of its scale with a better range of products, more competitive offer and improved customer experience.
"We will also be reviewing further opportunities to leverage our scale by connecting with target consumer segments across channels and partnering with suppliers to grow our mutual businesses," Hunter said.
What Conviviality said
Hunter added: "This is a strong set of results during a period of significant transformational change. With Matthew Clark we now have a firm foundation in the expansive on-trade market from which to build on, and our success over the important Christmas period gives us confidence that the second half will deliver further growth.
"I am pleased with the progress we have made to bring our two businesses together. I would like to thank all of our people, our Franchisees, our on trade customers and our suppliers who have contributed to our success."
In short
The drinks business is planning to make the most of its acquisition of Matthew Clark, and these results provide a solid foundation to build on.