Monday 16 July 2018 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
My new best friend Roger Lawson of ShareSoc has written about the firesale of Conviviality (CVR) assets. He is right but also wrong. What has happened tells us as much about the illusion of asset backing as it does about the way administration works.
I bring you below a Heads of Terms agreement offered by Conviviality's (CVR) unit Matthew Clark to a potentially largish restaurant chain. Quite simply it is offering an upfront bung of 5% of the expected two year sales as an upfront payment.
If you were in any doubt that AIM-listed (until now) Conviviality (CVR) was toast before today, the RNS released at 11.11am this morning should finally convince you that it really is all over. It has gone to meet its maker, it is a dead duck, it is an ex-company. And it is ouzo o'clock for the Sheriff.
On 14 March following pressure on this website Conviviality (CVR) announced it was scrapping its £8.2 million interim dividend due two days later as it struggled for cash. 15 days later the company had failed to raise £125 million and headed towards administration with shareholders set to lose everything. But I have been passed bank accounts which, as you can see below, demonstrate that some shareholders were in fact paid a dividend.
Some bears are on the pitch, they think it's all over, it is now - I refer to Conviviality and that is what I expect to be chanting within 24 hours. The game is almost up. At 5.42 PM prompted by reports that it was already in administration from, inter alia, Sky and the Daily Star, Conviviality updated us all on progress. Okay it is not in administration yet ...but it may well be there by tomorrow.
A 6pm “Update on Progress and Potential Equity Fundraise” announcement from Conviviality (CVR) – uh oh, not usually a time for good news…
Previously writing on in-turmoil Conviviality (CVR) I concluded last year remuneration included Diana Hunter £966k (inc. salary £450k), Mark Aylwin £677k (inc. salary £375k), Andrew Humphreys £554k (inc. salary £300k), David Adams £120k, Steve Wilson £55k and Martin Newman £45k! This also helps put the noted share purchases in context. Are “utmost appreciation and thanks”, “sincere thanks and best wishes” and bonuses (last year Andrew Humphreys £194k, Mark Aylwin £231k and Diana Hunter £428k) now being re-assessed?!? At 12:29pm today a “Director Change” announcement…
Having filled his boots with shares in Conviviality (CVR) the day before they were suspended pending clarification, the UK's top share blogger now reports that a rescue bailout could be at as little as 30p.
After recent events if Conviviality (CVR) boss Diana Hunter told me that 2 + 2 =4 I would ask her to provide credible third party verification before accepting her at her word. So today, with the shares suspended pending clarification following the "discovery" that £30 million of tax was due by month end, MS Hunter has updated poor investors and it seems everyone loves the company. What bollocks. Here are Ms Hunter's words with a ShareProphets translation service in bold.
Steve Moore has already covered the disaster story that is Conviviality (CVR) HERE. In essence it forgot that it has a tax bill (I assume PAYE) due on 29 March for £30 million and does not have the borrowing headroom to pay that. Uh Oh. As the BBC says about once a day we would not get amateurish corporate disasters like this if more companies were run by women. Like er....Diana Hunter the CEO of Conviviality. Anyhow...
A Trading update on Thursday from Conviviality (CVR) included that “following a review of current year projections, the company now expects that adjusted EBITDA for the current year will be approximately 20% below current market expectations”, but sought to reassure that “the company has not seen any material weakness in overall demand” and was followed by some director share buying. The shares though remained depressed... and there was then a 1:06pm Update to announcement. There's now a 'Further Update'...
Having in end-January results stated “confidence for both achieving current year board expectations, as well as the group's longer-term performance”, a 3:07pm “Trading update” from Conviviality (CVR)…
From the FCA's spreadsheet of short positions required to be disclosed to it, the following shows the shorted AIM shares with positions from 2016 and thus far in 2017 (by net short position %) - and if this position has increased (red), reduced (green) or remained unchanged (black) since last week...
Shares in Conviviality (CVR) are up by over 10% to nearly 200p today, although they are still somewhat lower than when I covered the company in May. The final results published this morning suggest that investors should continue to be very cautious about making an investment here
The expanding alcohol retailer and wholesaler Conviviality (CVR) provided the market with a double-barrelled update on Friday, announcing the completion of an acquisition and a trading update. It’s been non-stop growth and change at CVR in recent times. This leaves investors with plenty to think about as they sip on their discount booze.
Conviviality has been on the technical radar before, but simply did not make the grade as this is clearly a relatively illiquid situation.
AIM-listed Conviviality Retail (CVR), the UK's largest franchised off-licence chain, which includes the brands ‘Bargain Booze’, ‘Select Convenience’, ‘Thorougoods’ and recently-acquired ‘Wine Rack’ has updated that for the 26 weeks ended 27th October it “has traded well… and continues to perform in line with market expectations for 52 weeks to 27 April 2014”. The following reviews the trading update and those market expectations ahead of 20th January scheduled interim results.
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