Bargain Booze and Select Convenience owner Conviviality has announced that a “material error” in its trading forecasts means company profits will be £5.2m lower than expected.
A company review in to current year projections means pre-tax profits for the year ending April 29 will be 20% below market expectations. The announcement sent shares in Conviviality tumbling.
A “material error in the financial forecasts” of Conviviality Direct, which controls the company’s wholesaler and distributor business, is thought to have caused the £5.2m drop in expected profits.
The previous guidance for net debt at Conviviality, approximately £150m, remains unchanged.
In a statement, the company said: “Whilst our sales and orders have held up at levels ahead of last year, demonstrating that our one stop shop model is working, margins in Conviviality Direct have softened across January and February.
“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.”
Conviviality will provide a pre-close financial update on March 27.