Conviviality has to pay the outstanding tax bill on 29 March

Conviviality has to pay the outstanding tax bill on 29 March

The future prospects for Conviviality have grown darker today, as the UK group warned of its discovery of a GBP30m tax bill, which is due at the end of this month.

Late last week, Conviviality, which has operations in the wholesale distribution and off-premise channels in the UK, issued a profits warning for its current fiscal year. EBITDA for the 12 months to 29 April has been forecast to come in "approximately 20% below current market expectations", Conviviality said on Friday.

Today, however, the company suspended trading in its shares on the AIM in London. Conviviality's share price has fallen from GBP3 last week to GBP1.02 this morning.

The application to suspend trading was granted following a "further update", in which the company said it has "identified a payment due to HM Revenue & Customs of approximately GBP30m (US$41.8m) which falls due for payment on 29 March 2018 and which has not been accrued for within its short-term cash flow projections".

"This has created a short-term funding requirement."

Conviviality added that it has engaged PwC to help with upcoming discussions with HMRC as well as with key stakeholders. "Whilst there can be no guarantee," the company concluded, "the board believes this short-term funding requirement will be satisfactorily resolved."

Expert analysis

Country Profile: Wine Sector in the UK

Country Profile: Wine Sector in the UK

GlobalData’s Country Profile report on the Wine sector in the UK provides insights on high growth markets to target, trends in the usage of packaging materials, category level distribution channel dat...read more