Tuesday 24 April 2018

Conviviality chief executive steps down after horror show week

Diana Hunter is stepping down with immediate effect.

Joanna Yeates murder
Joanna Yeates murder

By Ravender Sembhy, Press Association City Editor

The chief executive of Bargain Booze owner Conviviality is to step down from the board following a week of profit warnings, the disclosure of a £30 million tax bill and after raising the prospect of an emergency fundraising.

Diana Hunter is stepping down with “immediate effect”, Conviviality said on Monday, with non-executive chairman David Adams stepping into the breach until further notice.

The firm added that Ms Hunter would remain with the group for a “period of time” in order to provide transition support.

Ms Hunter, a former Waitrose director, has been chief executive since 2013 and led the group through its stock market flotation in the same year.

She has also overseen a number of acquisitions, including Wine Rack, Matthew Clark and Bibendum.

However, the firm has had a nightmare March, including two profit warnings and the disclosure of a £30 million bill owed to HM Revenue and Customs, which has led to its shares being suspended.

As a result Conviviality is mulling going to investors for more cash as the tax bill’s discovery has created a “short-term funding requirement” and resulted in operational difficulties that could negatively impact profits.

The troubled group has said it is engaging with its advisers and broker regarding the possibility of an equity fundraising to recapitalise the business.

Conviviality last week mandated PwC to undertake a review of the business and its funding requirements, and it has “engaged” with HM Revenue & Customs (HMRC) regarding the £30 million payment, which is due on March 29.

The latest profit warning, last Tuesday, saw Conviviality say it expected adjusted earnings to come in 20% below market expectations, at between £55.3 million and £56.4 million.

Conviviality said it had found a “material error” in the forecasts for its Conviviality Direct business, as well as suffering from softer margins in January and February, which it expected would continue throughout the rest of the financial year.

Press Association

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