Conviviality (CVR) had a busy six months bedding in its high-profile acquisition of drinks wholesaler Matthew Clark - formerly co-owned by pub group Punch Taverns (PUB) - and expanding its franchisee network. It appears a pretty good job has been done on both fronts. Group sales shot up, as did cash profit, despite just a three-and-a-half-week contribution from the acquired business.
The group has now settled into a new structure, setting up a Conviviality Retail division, which contains high street brands Bargain Booze and Wine Rack, while leaving the Matthew Clark brand intact. Mark Aylwin has assumed management responsibilities at Matthew Clark, joining from wholesale rival Booker (BOK), and David Robinson, formerly of Home Retail (HOME), will look after Conviviality Retail.
The group is also growing its franchisee network. Sixteen franchisees joined the group in the first half, which resulted in 19 new store openings compared with just eight last year. Christmas was a merry affair, too, with group sales 13 per cent ahead of last year. Like-for-like sales grew 1.1 per cent in the festive period, although group chief executive Diana Hunter compared that with a growth rate of around 2 per cent the year before.
Analysts at Investec expect pre-tax profits= of £21.1m for the year to April 2016, giving EPS of 13.8p, compared with £9.7m and 11.2p for FY2015.
| CONVIVIALITY (CVR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 205p | MARKET VALUE: | £318m | |
| TOUCH: | 204-206p | 12-MONTH HIGH: | 225p | LOW: 132p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 128 | |
| NET ASSET VALUE: | 113p* | NET DEBT: | 56% | |
| Half-year to 1 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 183 | 2.7 | 3.2 | 2.0 |
| 2015 | 252 | -4.0 | -5.9 | 2.1 |
| % change | +38 | -249 | -284 | +5 |
Ex-div: 11 Feb Payment: 11 Mar *Includes intangible assets of £227m, or 147p a share | ||||
