19 November 2012
"Profit increase of 3.9%, dividend up 5.3%"
Majestic Wine PLC ("Majestic"), the UK's largest wine specialist, today announces its interim results for the 26 weeks ended 1 October 2012.
Download the full statement (PDF format)
- Profit before tax increased by 3.9% to £9.2m (2011: £8.8m).
- Diluted earnings per share up 6.1% to 10.4p (2011: 9.8p)
- Interim dividend increased 5.3% to 4.0p per share (2011: 3.8p).
- Managed reduction in wholesale trade, with sales down by £7.2m to £3.2m (2011: £10.4m).
- Sales excluding wholesale activities up by 4.6% to £122.7m (2011: £117.3m)
- Total sales down 1.4% to £126.0m (2011: £127.8m).
- Like for like sales in UK retail stores up 0.6%.
- Increase in active customers, up 11.2% to 594,000.
- Online sales increased 14.0% on last year and now represent 9.8% of UK retail sales.
- Nine new stores opened in period and two since end of September bring total number of stores to 189.
- Lay & Wheeler, our fine wine specialist, recorded profit before interest and tax of £506k (2011: £292k).
- Majestic Wine Calais recorded profit before interest and tax of £817k (2011: £658k).
- In the six weeks from 2 October to 12 November 2012, like for like sales in our UK stores up 1.2%.
Commenting on the results Steve Lewis, Chief Executive, said:
"These results, achieved in a challenging economic environment and the wettest summer on record, display the resilience of the Majestic business. I am pleased that so many new customers are choosing to shop with Majestic."
For further information, please contact:
Majestic Wine PLC
Steve Lewis, CEO
Nigel Alldritt, FD
Tel: 01923 298200
Tel: 020 7466 5000
Tel: 020 7597 5970
I am pleased to report that Group profit before tax for the six month period ended 1 October 2012 was £9.2m, an increase of 3.9% on the first half of the previous financial year. This result is encouraging as it has been delivered in an economic environment that remains difficult and was compounded by the adverse effect of an extremely wet summer season.
We decided to reduce our involvement in the wholesale drinks market and focus towards on-trade customers resulting in sales through this channel declining by £7.2m to £3.2m. As a consequence Group revenues were £1.8m lower than last year, at £126.0m. Group revenues, excluding wholesale activities, increased by 4.6% to £122.7m.
Sales through the store network grew by 4.7% to £108.7m with like for like sales up 0.6%. During the Summer sales were adversely affected by unseasonable weather that resulted in the cancellation of a large number of outdoor events. We have seen a substantial increase in the number of customers on our database who have purchased in the last twelve months, up 11.2% to 594,000. The average spend per transaction at our stores has risen to £126 from £125 and the average bottle price of still wine purchased at Majestic is now £7.46 up from £7.13 last year.
Total sales to business customers declined by £5.4m to £23.6m after the reduction of £7.2m in the wholesale channel. Sales to businesses now represent 20.5% of total UK sales.
We have a regional sales team of 25 people whose role is to secure restaurant, gastro pub and hotel business with all subsequent logistics handled by the nearest Majestic store. Additionally in London we have a sales team of 12 based in a dedicated office and depot near King's Cross that sell to larger businesses in the City and West End. We have seen sales growth of 17.0% from these managed accounts. We see considerable potential for further growth from this channel, leveraging our nationwide presence, excellent in-store service and flexible delivery arrangements.
We have seen strong growth in online sales, up 14.0% on the same period last year and they now represent 9.8% of total UK retail sales. At the beginning of the period we launched our mobile optimised version of the website allowing customers using devices with smaller screens to more easily view and navigate the site. Additionally, in June 2012, we reduced the minimum online purchase to six bottles mirroring the change that we made in our retail stores in September 2009. We are pleased with the response to these initiatives and over the period we have seen a 19.9% increase in the number of orders placed online.
We have opened stores in nine new locations during the period including Falmouth, our first store in Cornwall. Since the end of the period we opened a further two new stores, bringing the total number to 189. We are pleased by the initial sales recorded in all these stores and continue to see the potential to expand the UK store portfolio to 330 locations.
Lay & Wheeler
Lay & Wheeler is our fine wine specialist with particular expertise in the fields of en primeur sales, cellarage and broking of customer reserves. Profit before interest and tax for the period was £506k up from £292k in the first half of last year as we reported the balance of sales from the record Bordeaux 2009 vintage which were sold in the summer of 2010 and delivered in this half year. The principal activity during the half has been the selling of en primeur wines from the Bordeaux 2011 vintage. The quality of the vintage was reasonable, however demand from consumers was low following two exceptional vintages. Sales from the 2011 vintage will be reported in the 2015 financial year.
Majestic Wine Calais
The business caters to UK consumers wishing to take advantage of the much lower rate of alcohol duty in France. We are pleased to report that profit before interest and tax for the period was £817k up from £658k in the previous first half. During the half we have taken an opportunity to close our store in Cherbourg and consolidate the business down to our two stores located in Calais and Coquelles. The contribution made by the Cherbourg store was marginal as its trade relied solely on customers using ferries which run much reduced timetables over the winter months.
The Board is pleased to declare an increase of 5.3% in the interim dividend to 4.0p per share. The dividend will be paid on 4 January 2013 to shareholders on the register at the close of business on 7 December 2012.
In the first six weeks of the second half from 2 October to 12 November 2012 like for like sales through our UK stores were up 1.2%.
We recognise that the environment in which we operate is likely to remain challenging. We are most encouraged by the number of new customers attracted to Majestic and we are well prepared for the very important Christmas trading period.
19 November 2012
Download the full statement (PDF format)
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