Thursday 26 April 2018

Conviviality signals cash call in nightmare week

Conviviality insisted that customers and suppliers remain ‘supportive’, even as its shares remain suspended.

Joanna Yeates murder
Joanna Yeates murder

By Ravender Sembhy, Press Association City Editor

Bargain Booze owner Conviviality is mulling going to investors for more cash after the firm revealed that it owes the taxman £30 million and issued another profit warning.

Earlier this week, Conviviality said the tax bill’s discovery “created a short-term funding requirement” and resulted in operational difficulties that could negatively impact profits.

In a brief stock market update on Friday, the troubled group said it is engaging with its advisers and broker regarding the possibility of an equity fundraising to recapitalise the business.

Conviviality insisted that customers and suppliers remain “supportive”, even as its shares remain suspended on the AIM market.

We have had constructive discussions with our lenders which are ongoing. Conviviality spokesman

“Customers and suppliers remain supportive of the company and are working closely and constructively with the company at this time.

“We have had constructive discussions with our lenders which are ongoing,” the firm said.

It is actively engaging with stakeholders while it continues to work through its funding requirements, the group added.

Conviviality has 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.

HMRC has been “receptive” to its needs, Conviviality said.

It comes after the AIM-listed firm said on Tuesday that 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 expects will continue throughout the rest of the financial year.

Press Association

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