10 November 2008
Majestic Wine PLC ("Majestic"), the UK's largest wine warehouse chain, today announces its interim results for the 26 weeks ended 29 September 2008.
Download the full statement (PDF format)
- Total sales up 3.4% to £94.1m (2007: £91.0m). UK sales grew by 4.7% to £88.8m with like for like sales declining 2.1%, a result that maintains our share of the UK wine market. Like for like sales for the five weeks from 30 September to 3 November 2008 were down 4.7%.
- Profit before tax declined by 25.5% to £5.6m (2007: £7.5m).
- Average bottle of still wine purchased at Majestic is now £6.19 (2007: £5.85). Average spend per transaction has increased to £135 (2007: £128).
- Sales of fine wine continued to increase. Sales of wine priced at £20 and above increased by 10.7% on last year. There will be dedicated fine wine display areas in 53 stores by Christmas.
- Sales to private customers up 2.9% in the period, decline in sales to business customers of 1.6%. Champagne sales declined by 6.4% on last year, particularly from business customers.
- The value of orders placed via our website increased by 11.5% on last year.
- During the period we opened two new stores in Hereford and Leatherhead and re-sited our stores in Kingston and Worcester. Since the end of the period we opened in Summertown in north Oxford and have re-sited our existing store in south Oxford. We will be opening in Finchley before Christmas bringing the total number of stores in the UK to 148.
Commenting on the results Steve Lewis, Chief Executive, said:
"I am pleased that we have maintained our UK wine market share in such challenging conditions. I am confident that Majestic with its robust business model and highly differentiated customer proposition can maintain its market position going forward."
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For further information, please contact:
Majestic Wine PLC
Tel: 01923 298200
Tim Thompson/Jennie Spivey
Tel: 020 7466 5000
Majestic Wine PLC's nominated adviser is Teathers, a division of Straumur-Burdaras Investment Bank hf of Berkeley Square House, Third Floor, Berkeley Square, London W1J 6BU.
During the six months ended 29 September 2008 we experienced challenging trading conditions arising from the increasingly uncertain economic climate. Against this backdrop profit before tax was £5.6m a decline of 25.5% and total sales were up 3.4% to £94.1m.
Total UK sales grew 4.7% to £88.8m with like for like sales declining 2.1%, a result that maintains our share of the UK wine market.
Sales of still wine continued to show good growth, up 4.9%. Consumers took advantage of attractive pricing from the New World and we saw strong growth in wines from Argentina, Chile and New Zealand. Sales of Spanish wine also grew well on the back of a successful promotion we ran in September. The average bottle price of still wine purchased at Majestic is now £6.19, up from £5.85 last year. The average spend per transaction has increased to £135 from £128.
Sales of fine wine continued to grow with sales of still wine priced at £20 and above increasing by 10.7% on last year. We will have dedicated fine wine display areas in 53 stores by Christmas.
Sales of Champagne declined 6.4% on last year. It was particularly noticeable that business customers reduced purchases of Champagne.
Sales to private customers were up 2.9% in the period, however we have seen a decline in sales to business customers through the store network of 1.6%. These customers are predominately small owner operated restaurant, gastro pub and hotel businesses and many have seen their turnover slow in the current economic conditions.
During the period we have raised the frequency of communication to our customers, using the full price list to cover the key promotional periods augmented by flyers supporting shorter term offers.
Our Christmas price list was mailed to customers on 28 October and features over 60 new products. This Christmas we will focus on wines from Chile, New Zealand and Bordeaux and will have our largest range to date of exclusive parcels of claret.
We are excited by our new in-store initiative - "Introduction to Wine". This is a short two hour informal introduction to wine held in our stores and delivered by our enthusiastic and knowledgeable store managers. Customers that have an interest in learning about wine from grape to glass can sign up for the next event in store. Initial customer feedback has been extremely favourable.
The value of orders placed via our website has increased 11.5% on last year. We have recently trialled web exclusive offers which have proved effective in driving web traffic.
During the period we opened two new stores in Hereford and Leatherhead and we re-sited our stores in Kingston and Worcester. Since the end of the period we have opened in Summertown in north Oxford and have re-sited our existing store in south Oxford. We will be opening in Finchley before Christmas bringing the total number of stores in the UK to 148. In 2009, we plan to open new stores in Southend and Edinburgh and re-site one of our stores in Glasgow. We have several more locations under negotiation.
Like for like sales in our stores in France declined 24.6% on a same currency basis. Profit before interest and tax for the period declined 53.7% to £414,000. From the beginning of autumn 2007 we have seen a marked decrease in sales due to the appreciation of the Euro against Sterling coupled with the increase in the cost of fuel. We have increased our marketing activity and have ensured we have compelling promotional offers for Christmas.
We are maintaining our interim dividend at 2.8p net per share. The dividend will be paid on 9 January 2009 to shareholders on the register at the close of business on 12 December 2008.
Like for like UK sales for the five weeks from 30 September to 3 November 2008 were down 4.7%.
The business is very well prepared for the key Christmas trading period which we expect to be challenging.
10 November 2008
Download the full statement (PDF format)
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