Conviviality sees current year earnings 20% below market views
AIM-listed alcohol wholesaler Conviviality was under pressure on Thursday after saying that adjusted earnings before interest, tax depreciation and amortisation for the current year are likely to be around 20% below current market expectations.
Conviviality
101.20p
05:30 28/03/18
Food & Drug Retailers
4,357.06
16:38 14/11/24
FTSE AIM 100
3,527.89
16:54 14/11/24
FTSE AIM 50
3,970.79
16:54 14/11/24
FTSE AIM All-Share
729.38
16:54 14/11/24
In an update on trading for the 52-week period ending 29 April 2018, the group said that the change in expectations reflects a "material error" in the financial forecasts of the Conviviality Direct business, which means the EBITDA for the current period will be impacted by around £5.2m.
The company also said that while its sales and orders have held up at levels ahead of last year, margins in Conviviality Direct have softened since the start of 2018.
"In the revised guidance the company has assumed a continuation of the margin weakness for the remainder of the current financial year. A number of enhanced controls and disciplines have been introduced to address this and management believes that appropriate corrective actions are in place.
"The company has not seen any material weakness in overall demand and the previously announced cost saving actions remain fully on track."
Previous guidance for net debt of around £150m for the period ending 29 April 2018 remains unchanged.
At 1625 GMT, the shares were down 57% to 129.50p.