The Aim-listed company, whose shares are currently suspended following talk of
a merger with Matthew Clark Holdings, said pre-tax profits rose 4.4pc

Bargain Booze owner Conviviality Retail (LSE: CVR.L – news) has reported a rise in pre-tax profits
for the year to the end of April, following stronger wine sales.

The Aim-listed company said profit before tax and exceptional items was £9.7m,
a 4.4pc increase on the year before. Wine sales rose by 10pc during the
year, while sales of beer and ale also rose on the back of a “growing
trend for premium and flavoured spirits”.

Convivality said it had introduced 280 new products in the year, and now
stocks 70 premium bottles of ales and 20 craft beers.

Group revenue rose by 2.4pc to £364.1m, atlhough like-for-like sales dipped
1.7pc as the company battles competition from supermarkets.

Conviviality Retail, which listed in July 2013, runs 624 off-licence and
convenience stores, mainly under the Bargain Booze brand.

Store numbers have crept up by 5pc in the past year as the company, which
hails from the north west of England, focused on expanding in the south and
boosting its range of premium drinks.

Shares (Frankfurt: DI6.F – news)
in Conviviality Retail were suspended last week after the retailer
confirmed it was in take-over talks with UK-based Matthew Clark Holdings,
which is 50pc-owned by Punch Taverns (LSE: PUB.L – news) .

Conviviality
was founded in 1981 and its focus on selling cheap alcohol has paid off

Matthew Clark, the UK’s biggest drinks supplier to the nation’s pubs,
generated earnings last year of £25m on sales of £800m and was earlier this
year rumoured to be exploring options that could lead to a potential £200m
sale.

Punch, which owns 3,654 pubs in the UK, has a 50pc stake in Matthew Clark
alongside Australian private equity firm CHAMP. CHAMP bought its stake in
the business from Constellation Brands (NYSE: STZ – news) in 2011.

The original joint venture between Punch and Constellation in 2007 valued
Matthew Clark at around £120m, with Punch investing £35m in cash.

Because Matthew Clark is bigger than Conviviality, the acquisition would
constitute a reverse take-over under Aim rules.

Conviviality remains debt free with net cash of £1.2m at the end of its
financial year, although this is down from £4.2m
at the end of October.

“We will continue to help more of our franchisees grow their existing
business, while also working to attract new franchisees to the group and are
confident about the future,” said Convivality chief executive Diana
Hunter.