Conviviality ceo Diana Hunter has stepped down with immediate effect following a tumultuous week in which the company’s shares were suspended for trading as it faced up to a surprise £30m tax bill.
Hunter will remain with the company for a period of time in order to provide transition support. David Adams, non-executive chairman of Conviviality, is stepping into the role of executive chairman until further notice.
Last week the Bargain Booze owner identified an unexpected £30m tax bill due for payment on 29 March. Conviviality shares were subsequently suspended for trading on the Alternative Investment Market (AIM).
The company has called in accountancy firm PwC to assist it in its forthcoming discussions with HMRC and its key stakeholders including its lending banks, credit insurers, suppliers and other creditors.
It said the £30m tax bill had created a “short-term funding requirement” which may negatively impact its EBITDA range. Conviviality had earlier slashed its profit forecast by £5.3m, 20% below market expectations, due to an accounting error.
PwC will also determine the potential impact of any resulting funding requirement on the company’s adjusted EBITDA expectation and compliance with its banking covenants.
Conviviality said customers and supplied remained supportive of the company and that HMRC had been “receptive to our needs”.
Executive chairman David Adams said: “We’d like to express our thanks to Diana for her vision, drive and market understanding that has created the Conviviality we are today, with it’s clear route to market strategy for our suppliers and customers.
“We’re a profitable business, with the very best route to market in the UK – and our suppliers, franchisees, producers and customers know this. We’re very grateful to have so many people across the industry stand by our side and rally around us as we overcome this short-term challenge. We’ve been heartened by the support and will continue to talk openly to everyone we’re working with – these are relationships we intend to have for years to come.”