Conviviality has announced that it will fully supply the 127 Central Convenience stores, recently acquired from WS Retail, by the end of February. The firm will turn most of these into Select Convenience stores within the next 18 months. The number firm’s stores now stands at 831.
The leading independent distributor of drinks and impulse sector also plans to move these stores, located mainly in the South and South West of England from being company owned and operated to fully franchised. Around 10 existing franchisees have already expressed interest in operating some of these stores, said the half yearly statement of the firm.
“We expect to achieve buying synergies of approximately £0.2m and cost synergies of approximately £0.8m in the first full year of ownership,” stated the report.
The firm, which includes Conviviality Direct, Conviviality Retail and Conviviality Trading, registered robust results in the first half of the financial year with an increase of 9.2 percent in revenue to £836.3 million. The figure for the corresponding period in the previous year was £765.9 million.
Gross margin was down by 0.3 percent points, due to increased sales to large national account customers, said the company. Adjusted profit after tax was down by 1.6 percent and stood at £12.3 million.
The sales growth outclassed the market growth, above 6.5 percent in on trade distribution and and 1.9 percent on off trade distribution. Conviviality’s sales growth in on trade distribution market touched 6.9 percent whereas the estimated growth of the market, as a whole, is just 0.4 percent. In off trade distribution, conviviality grew 5.7 percent while market’s estimated growth is 3.8 percent.
The company also made strong gains in the market in this period, with 1,408 new on trade customers and over 2,400 customers, including 84 national accounts, increasing their purchases year on year.
“We have made deliberate choices to successfully grow market share and enhance the quality of future earnings by agreeing long term contracts with our larger customers and securing new national account customers. These gains in market share coupled with our continued strong sales demonstrates our competitive advantage, the broad customer base we have developed and the robust nature of Conviviality as the UK’s leading drinks wholesaler, distributor and solution provider to our Customers,” commented Diana Hunter, CEO Conviviality.