Majestic Wines FY profits slip on Naked Wines buy
- Full year net profits fall by 23.4% to GBP13.5m (US$21m)
- Net sales in 12 months to end of March rise 2.3% to GBP284.5m
- Operating profits slide by 22.5% to GBP18.4m
- Online sales up 12.4% to GBP32.9m
Majestic's new CEO looks to reinvigorate the business
UK wine retailer Majestic Wine has seen its full-year net profits hampered by its purchase of Naked Wines.
The company saw net profits in the 12 months to the end of March, slide by 23.4%, while net sales were up by just over 2%. Majestic's new CEO said today that investments are needed to "reinvigorate Majestic Wine".
Rowan Gormley has been at the helm since April, when Majestic purchased Gormley's online business Naked Wines for GBP70m.
He said: "Whilst my review of the business is ongoing, it is obvious that we need to make investments to reinvigorate Majestic Wine. These investments will initially suppress profit in the short term but I am confident we can rebuild momentum..."
Chairman Phil Wrigley said the fiscal year proved to be "challenging". The net profit performance reflects a number of "exceptional, one-off costs related to the deal to acquire Naked Wines and changes in members of the senior leadership team", he added.
But, Wrigley flagged that the company has grown market share, by 0.1% to its highest ever level at 4.3%, whilst UK like-for-like sales grew by 1.9%.
Gormley added: "When combined with Naked Wine's digital strengths, and both businesses ability to source exclusive and exciting wines for their customers, we are uniquely placed to build a fast growing international leading wine specialist."
Majestic operates 213 stores.
To read the company's official statement, click here.
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