Yahoo Finance More than £300m wiped off Bargain Booze owner's value after shock profit warning
Bargain Booze owner Conviviality has warned a "material error" in its forecasts means its profit will be £5.2m lower than expected, in a late trading update which wiped more than £300m off its value.
Shares in Conviviality plunged almost 60pc in just over an hour of trading to 123p.
The only time shares have traded at a lower price was when Conviviality floated on the London market in 2013 at 100p per share, though they had shot up to 130p by the end of trade that day.
Conviviality said it had reviewed its current year projections, and was now expecting adjusted earnings before interest, tax, depreciation and amortisation (Editda) for the year to April 29 to be 20pc below current market expectations.
It said there had been a "material error in the financial forecasts" of its Conviviality Direct business, its wholesaler and distributor arm, and this meant Ebitda for the year would take a £5.2m hit.
Its adjusted Editda for the last financial year came in at £60.9m, a 102pc leap on the prior year, reflecting acquisitions. Conviviality became the UK's biggest alcohol wholesaler following its takeover of wholesaler Matthew Clark and wine specialist Bibendum.
It said margins in the wholesaler division had softened across January and February, and it was now expecting this weakness to continue for the remainder of the 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, which also owns the Wine Rack and Bargain Booze off-licence chains, said.
