Majestic Wine profits soar by £6.7m in first half

Majestic has posted a pre-tax rise in profits of £6.7 million for the first half of this year to £6.8m, having reported profits of just £51,000 in the same period last year.

Group chief executive of Majestic Wine, Rowan Gormley

Announcing its half year results this morning, Majestic reported profits before tax of £6.8m in the 26 weeks ended 2 October, having barely broken even this time last year.

Revenues rose by 5.7% to £217.4m, which the retailer said puts it on track to hit its £500m sales target by 2019.

Off the back of its positive turnaround, the company hikes its dividend by 33.3% to 2p per share, with shares rising by more than eight per cent on this morning.

“The plan is on track,” stated Rowan Gormley, group chief executive. “Two years in and profits are growing, our foundation is solid and we are ready to accelerate growth. We have the opportunities to invest in new customers and a team excited to focus on what they do best. It’s time to put our foot on the gas.

“In this half, Naked Wines has demonstrated the quality of its model, people and management, by achieving profitability in all three geographical markets. It has become a disciplined business committed to continuous improvement.”

Earlier this year the company rolled out its “franchise-lite” model with the aim of giving staff and store managers more incentives and a greater stake in the success of their store.

Under the plans, the managers of Majestic Wine branches will get the chance to become partners, giving them greater control over the day-to-day running of stores. Majestic has said the programme with reach around half of its 210 branches over the next year.

“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,” added Gormley. “The team have worked like demons and I am dead proud of every one of them.”

Majestic Wines, which owns Naked Wines, currently has 210 wine warehouses across Britain as well as two branches in France.