However, there were reasons to be positive ahead of the key Christmas trading period. Following the opening of nine new stores, overall retail sales grew 4.7 per cent to £109m and active customer numbers rose 11.6 per cent to 594,000. What's more, average spend per transaction edged up by a pound to £126. The group also delivered online sales growth of 14 per cent, which takes such sales to almost a tenth of UK retail. The posh-wine business, Lay & Wheeler, made good progress as did Majestic's two Calais shops. And the second half has started better with like-for-like sales 1.2 per cent ahead in the first six weeks, albeit against a weak comparative period last year.
Investec is standing by its full-year pre-tax profit forecast of £24.1m and EPS of 27.7p (from £23.2m and 26.1p in 2012).
|MAJESTIC WINE (MJW)|
|ORD PRICE:||466p||MARKET VALUE:||£302m|
|TOUCH:||464-470||12-MONTH HIGH:||489p||LOW: 312p|
|DIVIDEND YIELD:||3.4%||PE RATIO:||17|
|NET ASSET VALUE:||121p||NET DEBT:||4%|
|Half-year to 1 Oct||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 5 Dec
Payment: 4 Jan
Majestic Wine has an impressive record of self-financed expansion and has been resilient in the face of a challenging first half. Nevertheless, a forward PE of 17 suggests high expectations and these results struggle to justify such lofty hopes. Hold.
Last IC view: Hold, 414p, 18 June 2012