Majestic expects full-year pre-tax profit to be flat
Majestic Wine has said it expects its pre-tax profit to be broadly flat for the current financial year after it experienced a difficult start to 2014.
Although the wine retailer saw like-for-like sales growth of 2.8% in the 10 week Christmas trading period, it said trading conditions have been challenging since the beginning of the 2014 calendar year.
With the current financial year ending on 31 March, the group now anticipates that profits and like-for-sales will be broadly in line with the previous year.
Latest market data published by Nielsen shows that Majestic has maintained its market share at 4.1%.
The company said it would be making improvements to its infrastructure as part of its longer term growth strategy to expand its e-commerce operation and increase its store footprint to over 300 outlets.
This will include investment in new office space and a larger distribution facility, establishing an in-house e-commerce development team and growing the commercial sales team. The company is also planning to increase its investment in both staff training and its customer relationship management and data analytics capabilities.
As a result of the short term costs associated with this investment, Majestic’s board is now forecasting flatter profit growth in the 2015 financial year.
Steve Lewis, Majestic chief executive, said: "The Majestic proposition remains compelling to the consumer and our future growth prospects remain bright. I am confident that the investments we are making over the course of the next twelve months will drive future shareholder value."
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