Matthew Clark, Peppermint, and Bibendum PLB Group help CVR boost revenues by 211% yoy
Conviviality Plc (LSE: CVR), the UK's largest franchised off-licence and wholesaler of alcohol, put out a H1 trading update this morning saying its unaudited revenues for the period were 211% (£783m) ahead of last year as the group benefitted from revenues from the acquisitions of Matthew Clark, Peppermint, and Bibendum PLB Group.
Convivality now operates in three divisions: Direct (wholesaler), Retail (off-licences), and Trading (full-service brand and wine agency), and the confirmed that sales in each business unit had beaten the previous period.
The company's share price rose nearly 5%.
The Company said it had made strong progress with the 3 acquisitions it had made over the last year:
"...the integration of Matthew Clark and Bibendum PLB Group ahead of plan and the plan to deliver synergies remains on track. Conviviality continues to perform in line with market expectations for the 52 week period ending 30 April 2017."
Broker N+1 Singer said Conviviality's H1 trading update was solid and attributed much of the growth to the "dominant" Mathew Clark and Bibendum businesses:
"The Retail business traded broadly in line with our expectations. Delivery on synergies remains on track. We make no changes to our above consensus forecast this morning but reinforce our Buy on growth, rating and yield considerations."
While broker Zeus Capital also welcomed the announcement, saying the results were strong despite being skewed by acquisitions. Zeus analyst John Wilson said risks remain in the upside but stressed that the shares continue to trade at a discount to peers:
"Management remain confident in the outlook and the plan to deliver significant synergies following the transformational acquisitions of Matthew Clark and Bibendum remain on track.
Our view remains that the risks still lie to the upside in terms of more synergies emerging over time. The size and clout of CVR in the UK drinks market is not fully reflected in the valuation and the shares continue to trade at a significant discount to the peer group."
Diana Hunter, CEO of Conviviality, said she was pleased about the strong performance across all divisions during such a "transformational" period:
"This further demonstrates the teamwork and dedication of all of our people in maintaining excellent levels of service to their customers.
The organic growth in each business unit demonstrates that existing and new customers are increasingly recognising Conviviality as the leading solution provider and distributor to the UK drinks market."