The timing of Easter this year, and tough comparatives from last year's Jubilee, meant like-for-like UK retail sales at Majestic Wine (MJW) dipped 0.4 per cent at the first-half stage. But strip out the first nine weeks which were affected by these one-offs and sales actually rose 3 per cent - offering a better indication of the wine merchant's underlying performance.
Revenue growth was boosted by a new, user-friendly website, which helped online sales to rise 8.3 per cent. Moreover, the fine wine range was consolidated into fewer, but more recognisable, names - which contributed to a 15.6 per cent rise in sales of wine priced over £20 a bottle. Meanwhile, the commercial division, which sells to pubs and restaurants, grew sales 8.6 per cent to £25.6m - representing 21.7 per cent of total UK sales. Higher labour costs did mean a 30 basis point gross margin decline, but that was offset by tight cost controls - so operating profit actually rose 4 per cent.
Customer numbers have risen 6.2 per cent in the past 12 months as well, to 631,000, and Majestic has also opened six stores so far this year, with a further five due to open before Christmas - bringing the total to 203.
Broker Investec Securities expects full-year pre-tax profit of £25.8m, giving EPS of 29.4p (from £23.7m and 26.6p in 2013).
| MAJESTIC WINE (MJW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 552p | MARKET VALUE: | £361m | |
| TOUCH: | 546-555p | 12-MONTH HIGH: | 568p | LOW: 397p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 135p | NET DEBT: | 5% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 126 | 9.16 | 10.5 | 4.0 |
| 2013 | 130 | 9.54 | 11.1 | 4.2 |
| % change | +3 | +4 | +6 | +5 |
Ex-div: 4 Dec Payment: 3 Jan | ||||
