Profits rise at Majestic despite fall in sales
Majestic Wine has reported a rise in its annual pre-tax profits despite seeing a decline in sales.
In the 52 weeks to 1 April 2013, group profit before tax increased by £0.5 million to £23.7 million while total sales fell 2.1% to £274.4 million. Like-for-like sales in UK retail stores rose by 1%.
Commenting on the results, chief executive Steve Lewis said the group is trading in line with company expectations.
"Majestic is in excellent shape and has made good progress with the four key elements of our future growth strategy: new stores, business customers, ecommerce and fine wine."
Sales in Majestic’s retail stores increased by 3.2% to £236 million with the average bottle price of still wine purchased rising to £7.56 from £7.34 last year. The average spend per transaction remained level at £128.
Wholesale sales fell from £12.7 million to £5.8 million as the company scaled back its exposure to the wholesale drinks market.
Underlying sales, excluding wholesale, were up 2.6% to £268.6 million. Lay & Wheeler pre-tax profit fell to £1.7 million from £1.9 million last year.
Online sales increased 14.7% on last year and now represent 11.1% of UK retail sales. The company plans to launch the next generation of its website this summer which will include an enhanced stock system to enable customers to order from a wider range of products based on local availability, as well as and improved click-and-collect proposition.
Chairmen Phil Wrigley Majestic said that trading in the current financial year was in line with expectations, although the year had started slowly reflecting the earlier timing of Easter this year and the boost given to last year from the Jubilee celebrations. He added: "The business is in excellent shape and well placed to maximise sales over the important summer trading period."
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