Bargain Booze owner says suppliers remain 'supportive' despite £30m tax bill

The troubled group insists it has been engaging with lenders as it works through its funding requirements

Conviviality’s tax bill is due at the end of March

Bargain Booze owner Conviviality has said that customers and suppliers remain “supportive” after the firm revealed that it owes the taxman £30m, suspended its shares and issued a profit warning.

Earlier this week, Conviviality said that the tax bill’s discovery “created a short-term funding requirement” and resulted in operational difficulties that could negatively impact profits.

In a brief stock market update on Friday, the troubled group insisted that it has been actively engaging with stakeholders while it continues to work through its funding requirements.

“Customers and suppliers remain supportive of the company and are working closely and constructively with the company at this time.

“We have had constructive discussions with our lenders which are ongoing,” the firm said.

Conviviality is working with PricewaterhouseCoopers as it undertakes a review of the business and its funding requirements, and it has “engaged” with HM Revenue and Customs (HMRC) regarding the £30m payment, which is due on 29 March.

HMRC has been “receptive to our needs”, Conviviality said, adding that it is also engaging with its advisers and broker regarding the possibility of equity fundraising to recapitalise the business.

It comes after the AIM-listed firm said on Tuesday that it expected adjusted earnings to come in 20 per cent below market expectations, at between £55.3m and £56.4m.

Conviviality said it had found a “material error” in the forecasts for its Conviviality Direct business, as well as suffering from softer margins in January and February, which it expects will continue throughout the rest of the financial year.

PA