UK households may be watching their pennies at the moment, but that doesn't seem to have dampened their enthusiasm for decent wine, as record results from Majestic Wine demonstrate. Customer numbers climbed 11.1 per cent which along with the addition of 16 new stores helped Majestic take share in a difficult market.
That's partly down to the continued effect of reducing the minimum purchase limit from 12 to six bottles for in-store purchases, and chief executive Steve Lewis is confident the recent extension of this to online purchases will broaden the appeal of Majestic further still. It's also partly down to the demise of rival Oddbins, especially in respect of commercial sales, which were up 6.9 per cent over the year and now account for nearly a quarter of sales.
Current trading has been weak, though, with like for like sales growth of 0.6 per cent in the past 10 weeks, substantially below the 2.6 per cent recorded last year. This reflects a high rate of returns after the Jubilee washout and very tough Royal Wedding comparatives last year, but Mr Lewis is confident of an Olympic boost this summer.
Broker Investec expects full year pre-tax profits of £24.5m and EPS of 28p (from £23.2m and 26.1p in 2012).
MAJESTIC WINE (MJW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 414p | MARKET VALUE: | £263m | |
| TOUCH: | 411-414p | 12-MONTH HIGH: | 510p | LOW: 312p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 120p | NET CASH: | £1.1m | |
| Year to 2 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 197 | 16.5 | 17.9 | 9.80 |
| 2009 | 202 | 7.40 | 5.30 | 9.80 |
| 2010 | 233 | 16.0 | 18.4 | 10.3 |
| 2011 | 257 | 20.3 | 23.0 | 13.0 |
| 2012 | 280 | 23.2 | 26.5 | 15.6 |
| % change | +9 | +14 | +15 | +20 |
Ex-div:18 Jul Payment:17 Aug | ||||
