Conviviality, the wholesaler and distributor of alcohol and impulse products, has announced it intends to appoint administrators, putting some 2,500 jobs at risk at the company which has recently reported identifying a ‘material error’ in its financial forecasts and an unexpected £30m tax bill
The AIM-listed company, which includes the Bargain Booze and Wine Rack off licence chains, put out a regulatory statement this morning saying that following discussions with its lenders, the board intends to appoint administrators within 10 business days.
The statement said: ‘The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.’
At the beginning of the month, Conviviality put out a statement that it had detected a ‘material error’ in its financial forecasts for adjusted EBITDA of £69.1m to £70.5m. The company said this related to an arithmetic error, and it expected adjusted EBITDA for the current year to be approximately 20% below market expectations, in an expected range of £55.3m to £56.4m.
Shortly afterwards, Conviviality revealed it had identified a payment due to HMRC of approximately £30m due for payment on 29 March and which had not been accrued for within its short term cash flow projections. At the time, the company said it had engaged PwC to assist it in discussions with HMRC and its key stakeholders.
Report by Pat Sweet
