Naked Wines acquisition boosts sales at Majestic

Majestic Wine, the UK's largest wine specialist, has today announced its interim results for the 26 weeks ended 28 September 2015, and disclosed plans to improve its return on capital over the next three years.

Group sales were up by 36% and adjusted EBIT rose by 12%, reflecting the Naked Wines acquisition at the start of this financial year

There were strong sales growth of 35% at Naked Wines - comparing the full 6 months to 30 September YOY. Adjusted EBIT stood at £0.9m (£0.6m reported in the period of ownership) which reflects better than planned performance from existing customers and the decision to delay spend on customer acquisition into H2.

The company also announced it will be targeting over £500m sales by 2019. However, the otal UK store target has been reduced from 330 to 230, currently 211.

Chairman Phil Wrigley commented, “We now have a first class team and a compelling strategy to create a real step change in the value of the business for our shareholders. The team has completed a thorough 'root and branch' review of the business, identified the key steps to be taken and the measures that will demonstrate our progress over the coming years. Alongside all this activity the new team has traded the business effectively.”

CEO Rowan Gormley said, “Six months in to my new job it is clear to me that we have a solid core business at Majestic, and two great growth engines in Naked and our Commercial business. We have a clear plan, which will require investment and take 3 years to complete, but will also deliver a better business that can create sustained growth in shareholder value. Fortunately, the Board acted decisively and quickly when it became clear that a change of direction was required, so our core competitive strengths are intact and provide a sound foundation to work from. As a result, profit for the current year is expected to be impacted by the increased investment derived from our successful test period after which we expect to see sustainable growth as the anticipated returns from our initiatives are realised.“