Conviviality reeling from £30m surprise tax bill

Crewe-based Conviviality, the owner of Bargain Booze and Wine Rack, issued a second profit warning in less than a week after being hit with an unexpected tax bill for £30m which falls due for payment at the end of the month.

The AIM-listed company issued a statement saying the tax bill had created a “short-term funding requirement” following its announcement several days ago that its EBITDA for the year ending on April 29 will be £5.2m less than predicted because of a “material error in financial forecasts” – 20% lower than expectations.

Conviviality has engaged PwC to undertake discussions with HM Revenue & Customs and its lending banks, credit insurers, suppliers and other creditors.

The company said: “Following preliminary advice received from PwC, whilst there can be no guarantee, the Board believes this short term funding requirement will be satisfactorily resolved.”

Conviviality says it now expects its EBITDA to fall between £55.3m and £56.4m.

Meanwhile, trading in shares of the company on the AIM have been suspended.