It has been a busy year for Conviviality Retail (CVR). Since going public last July, the owner of the Bargain Booze chain has made a number of changes to support its long-term growth strategy. The biggest such developments were two acquisitions: 22 Wine Rack stores in August, followed by 31 Rhythm and Booze outlets in May 2014.
The company also closed 62 under-performing shops, which explains the fall in reported revenue, while like-for-like growth was actually flat. And with the bulk of the store closure programme now complete, Conviviality can focus on helping franchisees up their game to boost sales and improve profitability. This includes an advertising campaign, store make-overs, better management information and more store visits to promote best practice and discuss ideas.
Already, there are signs that these efforts are bearing fruit. Store margins improved throughout the year and average sales per shop grew 3 per cent. This, along with cost control and lower financing charges, contributed to a £2.2m rise in the adjusted pre-tax profit to £9.3m. A public listing has also allowed for a generous share award scheme, giving successful franchisees a stake in the company's success for the first time.
Panmure Gordon expects pre-tax profit of £11m in the current financial year, giving EPS of 12p.
| CONVIVIALITY RETAIL (CVR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 164p | MARKET VALUE: | £109m | |
| TOUCH: | 160-167p | 12-MONTH HIGH: | 197p | LOW: 100p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 75p* | NET CASH: | £10m | |
| Year to 27 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011** | 381 | 6.10 | na | na |
| 2012** | 395 | 5.42 | na | na |
| 2013** | 372 | 6.58 | 15.1 | na |
| 2014 | 356 | 4.83 | 6.1 | 8 |
| % change | -4 | -27 | -60 | - |
Ex-div:17 Sep Payment:17 Oct *Includes intangible assets of £36.3m or 54p a share **Pre-IPO figures and pro-forma EPS for 2013 | ||||
