UK: Majestic Wine reports H1 profits rise
Majestic Wine, the UK retailer, has posted a 9% rise in half-year profits and said it was "pleased" with the company's trading performance so far this year.
Profits before tax for the 26 weeks ended 28 September reached GBP6.1m (US$10.2m) from GBP5.6m in the previous year, while like-for-like sales were up 5.4% for the same period.
Total net sales rose by GBP12.6m to GBP106.7m after the inclusion of GBP6m from Lay & Wheeler, the fine wine specialist acquired in March.
"It is encouraging that in the current economic conditions our loyal customers continue to find the Majestic proposition compelling," chief executive Steve Lewis said.
Online sales increased 24.6% on last year and now represent 9.2% of UK retail sales, the company said.
Sales to private customers continued to show good growth, up 8.9% in the period, however sales to business customers declined 6.9% reflecting difficult economic conditions, Majestic said. As a result, the average spend per transaction is down to GBP133 from GBP135 in 2008.
During the period, Majestic opened four new stores in Southend, Shrewsbury, Edinburgh and Market Harborough. Since the end of September it has also opened in Abingdon and Sale and has re-sited its store in central Glasgow.
Majestic now operates from 153 stores in the UK and said it sees the potential to enlarge Majestic to at least 250 locations.
"Whilst we are pleased with the trading performance so far this year we remain cautious about the economic climate. We are well positioned for the very important Christmas trading period," chairman Simon Burke said.
At the beginning of September, Majestic reduced the minimum purchase in-store to six bottles from twelve. The company said initial indications are "encouraging", with a "small reduction" in average spend more than compensated by an increase in transaction volume.
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