Majestic Wine toasts strong growth in first half

Majestic Wine said it was on track to meet expectations for annual profit after notching up strong growth in the first half.

Adjusted pre-tax profit, excluding acquisition and restructuring costs and other items, jumped to £6.8m in the six months to 2 October from £51,000 a year earlier.

The company said its revival was due to rising sales and greater efficiency as chief executive Rowan Gormley’s turnaround plan pays off.

With the important pre-Christmas period under way, Majestic’s UK retail business posted a 2% increase in underlying sales to £120.6m in the first half. Majestic said this was a slowdown on last year but the result was solid when rising prices were reducing sales volumes.

Underlying sales at Naked Wines rose 10.9% to £67.8m. Majestic bought the business, which lets subscribers fund independent winemakers in exchange for wines at preferential prices, in 2015 when Gormley, its founder, became Majestic’s chief executive.

Gormley was brought in to turn Majestic around after several years of disappointing results as the chain struggled to compete with low supermarket prices. He scrapped a minimum six-bottle purchase rule, simplified prices, updated the range and improved pay and incentives for staff.

Gormley said: “The focus on empowering our wonderful store teams in Majestic retail has finally borne fruit, with improved staff engagement flowing through into improved customer engagement, which means improved loyalty and retention.

“We expect full-year results to be in line with current market expectations. Looking further out, we aim to increase the rate of sales growth in the medium term, by steadily increasing our investment in new customer acquisition.”