It's satisfying when a plan comes together, so management at Majestic Wine (WINE) will certainly be feeling upbeat. Chief executive Rowan Gormley said the business had been "doing the right thing" by its staff, suppliers and customers as part of its three-year turnaround plan, and all seems well so far. Removing the six bottle minimum for customers, making the pricing simpler and the range more accessible have helped Majestic's core estate register its first like-for-like sales growth in four years.
Pleasingly, Naked Wines, which Majestic bought last year and previously run by Mr Gormley, also broke the £100m sales barrier for the first time. Free cash flow was robust at £13.8m, prompting the group to announce it will resume paying a dividend in the first half of next year.
While he was pleased with the 7.9 per cent growth in sales at the commercial division, Mr Gormley said this part of the business was capable of double-digit growth, in part thanks to the growing number of premium-focused pubs, which are its customers.
Analysts at Investec expect adjusted pre-tax profit of £16.3m in the year to March 2017, leading to adjusted EPS of 16.8p, compared with £15m and 17.1p in FY2016.
| MAJESTIC WINE (WINE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 423p | MARKET VALUE: | £326m | |
| TOUCH: | 420.75-423.25p | 12-MONTH HIGH: | 485p | LOW: 273p |
| DIVIDEND YIELD: | na | PE RATIO: | 121 | |
| NET ASSET VALUE: | 154p* | NET DEBT: | 23% | |
| Year to 28 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 280 | 23.2 | 26.5 | 15.6 |
| 2013 | 274 | 23.7 | 26.9 | 15.8 |
| 2014 | 278 | 23.8 | 27.0 | 16.0 |
| 2015 | 284 | 18.4 | 20.5 | 4.2 |
| 2016 | 402 | 4.7 | 3.5 | nil |
| % change | +41 | -74 | -83 | - |
Ex-div: na Payment: na Includes intangible assets of £56.7m, or 80p a share | ||||
