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Naked Wines boosts Majestic half year performance

Published:  23 November, 2017

Majestic Wine said it is ready to “put our foot on the gas and accelerate growth” on unveiling its half year results today.

The results for the 26 weeks ended 2 October 2017 revealed that sales were up 5.7%, (4.2% underlying) and it was on track to hit its £500m sales target by 2019.

Adjusted EBIT was up £6.6m to £7.3m and reported PBT was back in the black at £3.1m vs a £4.4m loss in H1 2017.

Naked Wines saw a 10.9% sales growth to £67.8M vs H1 2017. It said the “biggest single factor” in Naked Wines growth had been growth in the customer base, which in turn had driven growth in contribution from Mature Angels by £3.8m, a 33.3% increase from H1 2017.

Majestic Retail, which has 210 sites in the UK and two in France, saw a sales increase despite a tough trading market, it said. It saw sales increase by 2.3%, which is a slowdown compared to the growth last year.

Majestic Commercial, its specialist on-trade supplier, was in a “holding pattern” while the company continued to focus on the much larger Majestic Retail business. It intends to grow Majestic Commercial from 2018 onwards so as a result EBIT fell 36.4% from H1 2017 to £1m.

On its Lay & Wheeler, specialist wine merchant, it revealed it continues to grow in sales and profits. Sales were up 8.8% and gross profit was £0.1m year on year.

The company also unveiled its opportunities for growth claiming that it appeared to be strongest in Naked Wines rather than Majestic Retail, digital rather than traditional channels and the USA rather than the UK.

“The plan is on track. Two years in and profits are growing, our foundation is solid and we are ready to accelerate growth. We have the opportunities to invest in new customers and a team excited to focus on what they do best. It’s time to put our foot on the gas,” Rowan Gormley, group chief executive, said.

“In this half, Naked Wines has demonstrated the quality of its model, people and management, by achieving profitability in all three geographical markets. It has become a disciplined business committed to continuous improvement.

“The focus on empowering our wonderful store teams in Majestic Retail has finally borne fruit, with improved staff engagement flowing through into improved customer engagement, which means improved loyalty and retention.”