Majestic reports half-year profit hike of 20%

Published: 14 November, 2011

Majestic Wine has reported a 20% hike in profits to £8.8 million, with like-for-like sales up 2.7%, in the 26 weeks to September 26.

Majestic Wine has reported a 20% hike in profits to £8.8 million, with like-for-like sales up 2.7%, in the 26 weeks to September 26.

Total sales for the 174-strong chain grew by 8.7% to £127.8 million, and the number of active customers increased by 7.7% to 534,000.

Chief executive Steve Lewis said the company was "very well prepared for the important Christmas trading period".

The firm opened eight new stores in the period - in Evesham, Weston-Super-Mare, Fleet, Livingston, Hale, Dundee, Worthing and Bury St Edmunds. Since the end of September is has opened three more stores in Clitheroe, Ripon and Braintree. Plans are in place to open stores in Chesterfield and in West Kirby on the Wirral later in the year.

Online sales are also up, by 8.7% to make up 9% of the firm's UK retail sales.

The firm's fine wine division Lay & Wheeler recorded profit before interest and tax of £292,000, up from £77,000 in the same period of 2010.

In addition, Majestic's French business - it operates three stores in northern France, two in Calais and one in Cherbourg - recorded profit of £658,000, up from £574,000 in 2010.

In the first six weeks of the second half of the company's financial year, from September 27 to November 7, like-for like sales were down 1.1%. Chairman Phil Wrigley said: "This trading period has been adversely affected by two weeks of disappointing sales in mid-October. Total sales through our UK stores over the same period were up 3.8%."

Wrigley added: "The average spend per transaction at our stores has risen to £125 from £122 and the average bottle price of still wine purchased at Majestic is now £7.13 up from £6.67 last year.

"Sales of still wine priced at £20 per bottle and above increased by 20.0% and now represent 5.5% of UK retail sales. We now have fine wine display areas installed in 122 of our stores compared with 96 at the end of the previous first half year."

The company declared an increase of 15.2% in its interim dividend to 3.8p per share.