Conviviality Retail pre-tax profits up 13.6%
Conviviality Retail, the owner of Bargain Booze and Wine Rack, saw its group pre-tax profits excluding exceptional items rise by 13.6% to Â£2.2 million in the first half of its financial year.
The group said that wholesale sales (sales to franchisees) fell by 5.1% to £183.7 million in the 26 weeks to 27 October as the number of stores was reduced in a bid to improve the quality of the estate.
Conviviality Retail enjoyed a strong performance at Wine Rack over the Christmas period with like-for-like retail sales surging by 21.8% in the two weeks to 5 January 2014. Online sales at Wine Rack also performed well, rising 15.3% on the previous year.
In the half-year period, like-for-like franchisee retail sales across the group edged up 1.5%. In the two weeks to 5 January 2014, like-for-like franchisee retail sales increased by 2.8%.
Conviviality Retail said that although franchisee sales did not form part of its revenue, they were an “important performance indicator” for the business.
Diana Hunter, Conviviality Retail chief executive, commented: "Throughout the first half we have implemented our strategy to improve the quality of our store estate and build stronger relationships with our franchisees and suppliers. We acquired the Wine Rack business on 30 August, increasing focus on our wine offering and penetrating further into the South of England.
“As anticipated store numbers and therefore revenues have reduced in the first half of this financial year, this reduction is in line with our expectations and is consistent with our aim of improving the quality of our store estate. Work is underway to build a strong pipeline of new stores in higher quality locations for both Bargain Booze and Wine Rack and convert this pipeline to drive sales growth in future years.
“We are making progress across all elements of our strategy and expect the benefit of these initiatives to start to drive growth from the next financial year 2014/15.”
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