Majestic increases sales and profit despite tough UK market
In the year to 2 April, reported sales rose by 2.3% to £476.1 million with the growth driven by an 11.3% underlying sales uplift at Naked Wines
There was also a £9.8 million improvement in pre-tax profit to £8.3 million following a loss of £1.5 million in the previous year. In addition, underlying adjusted pre-tax profit increased by 63% to £17.2 million. The group said the success was achieved despite a tough UK market. Naked Wines was key driver of profit growth with adjusted underlying EBIT six times higher than in the previous year.
Meanwhile, profits at Majestic Retail were flat with underlying sales growth of 1.9%. The group said improved cost controls within the business were offset by foreign exchange pressures on margin.
Rowan Gormley, Majestic group chief executive, said the group expects the UK market to remain tough and possibly worse than last year.
He added: “Certainly trading since year end has been harder than the prior year in the UK. Despite this, we expect to hit FY19 market expectations."
Majestic said it will benefit from the fact that 20% of its business takes place in the growth markets of the USA and Australia and that 45% of group sales are now conducted online.
Gormley said: “If the UK is headed for a retail crisis, as some commentators are suggesting, then we are planning for a great crisis. We founded Naked Wines during the financial crisis of 2008 and proved that investing in acquiring customers and generating loyalty through great products and service, will drive profitable growth even in a tough market."
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