Conviviality Retail has recently floated on the Aim. They are one of the larger off-license franchise businesses and are featured in Shares this week. They are mainly covering the north west of England with 600+ outlets selling beers @15% below prices charged by supermarkets. Their plan is to expand into southern England and develop their wine business led by a former executive who worked for Waitrose and Sainsbury (watch out Majestic), Cheers!

Shares suspended What happens next? Surely a fiasco of the first order. From rags to riches and then back to rags !

Comment from Shore Capital:
"Another day, another update from Conviviality and once again the statement does not make for pleasant reading. The shares were suspended this morning pending an announcement so we wondered if there had been another discovery to impact profitability or whether there was bid interest that might have been leaked ahead of the market opening. We were not expecting the company to state it had found a c£30m payment due to the HMRC on 29 March 2018. This was also in the period since the statement issued yesterday at just after 1pm. This raises all sorts of questions and has caused a short-term funding issue with accountants PwC now engaged to help find a solution. Sadly it is also another huge dent in management credibility. Looking ahead, we now expect the company to be trapped in a vicious cycle that starves the business of much needed cash and we are increasingly doubtful equity holders will be left with any value. With limited visibility and confidence in our financial expectations, we withdraw our forecasts and put our Hold recommendation under review.
We are surprised the company has retained its net debt guidance for FY2018F of c£150m given the HMRC payment due before the year end and potential for profitability to be lower than expected. The guidance seems to presume that the payment to HMRC was either included in full year budgets but not in short-term cash flow projections or is paid post year end with profitably remaining in the right ball park.
Our concern now is that the business could be trapped in a vicious cash cycle. We expect cash availability to be put under further pressure from the level of cash available from the receivables facility as the banks manage their risk exposure. Suppliers potentially are also likely to be managing their receivables risk via supply on tighter commercials terms and/or lower order sizes. The recent inclement weather conditions may also have resulted in higher levels of stock in the supply chain too, therefore, potentially having an adverse impact on future short-term sales."

One word, incredible !

Conviviality said it was exploring the possibility of an equity fundraise to recapitalise its business amid a recent profit warning after discovering a £30m unexpected tax bill.

The firm also said that customers and suppliers "remain supportive" as it continues to work through its funding requirements.

'The company has engaged with HM Revenues and Customs regarding the £30.0m payment due on the 29 March 2018. HMRC has been receptive to our needs and these discussions continue,' the firm said in statement.

Conviviality said it was exploring the possibility of an equity fundraise to recapitalise its business amid a recent profit warning after discovering a £30m unexpected tax bill.

The firm also said that customers and suppliers "remain supportive" as it continues to work through its funding requirements.

'The company has engaged with HM Revenues and Customs regarding the £30.0m payment due on the 29 March 2018. HMRC has been receptive to our needs and these discussions continue,' the firm said in statement.

Doesn't look too good. Perhaps the various recent acquisitions by them have been a step too far

Customers and suppliers "remain supportive"

or.........

I hope that rabbit gets out of the way !

Only the little people pay taxes.

Conviviality, the company behind high street off-licence chains Wine Rack and Bargain Booze, is on the brink of collapse, putting 2,600 jobs at risk and prompting warnings that pubs could run dry.

In a statement to the stock market, Conviviality said investors had refused its request for £125m of new money, which it needs to stave off bankruptcy after a string of shock profit warnings.

Directors are still seeking a buyer for all or part of the business, but Conviviality is facing the prospect of going into administration, which is likely to be managed by accountancy firm PricewaterhouseCoopers.

The trade body for the UK’s pubs, more than 20,000 of which are supplied by the company’s Matthew Clark distribution division, warned many could now face “short-term supply issues”.

“Despite a significant number of meetings with potential investors resulting in good levels of demand, and constructive discussions with a number of key customers and suppliers regarding the provision of support, there was ultimately insufficient demand to raise the full £125m,” the company said.

It looks like total incompetency does it not. Drunk on the job !

I'll drink to that chess , hic .