Bargain Booze owner Conviviality Retail's shares rocket on AIM debut

The newly formed company’s shares shot up 30% after being placed on at 100p and rising to 130p by the end of the day.

The franchised off-licence’s listing gave it a market cap of £66.7m while the business raised a further £64m from Oriel Securities and Zeus Capital, which bought out private equity owners ECI Partners and other shareholders.

The Bargain Booze owner hopes to fund the 611-store group’s expansion in the south of England, increase its food and wine offering and incentivise its franchisees through the listing.

Independent retail analyst Nick Bubb said: “If truth be told, this is a pretty mature business, with annual underlying EBITDA struggling to break out the £12m to £13m area, but it generates a lot of cash and the big attraction for income funds was the 8% prospective dividend yield.

“At 100p it was clearly priced to go, to clear out the former private equity owner ECI, but even now it yields a healthy 6.2%, so it could still be right to get involved, if you think the new management team can add value through the push into convenience stores, the development of the wine range and the increased motivation of the franchisee network.”