Majestic toasts fresh profits increase

Wine warehouse chain Majestic continued its record of strong growth today after a 5.5% rise in like-for-like sales and an 18% jump in profits.

The group, which operates from 124 sites, said it had bucked the challenging retail environment by communicating more frequently with customers and introducing a series of new shorter promotions.

Strong demand for wines from Spain, California, Chile and Argentina also helped lift sales in the half year to £80.8m (€120m), from £74.6m (€111m) last time, while profits for the six months to September 26 reached £5.9 million.

The average bottle price of still wine purchased at Majestic lifted to £5.54 (€8.24) from £5.46 (€8.12)while the average spend per transaction rose £5 (€7.40) to £115 (€171).

That was after a 43% increase in sales of fine wines priced at £20 (€29.76) and above, as customers “traded up” to more expensive wines.

Like-for-like sales have remained steady at 5% since the end of September, helping Majestic shares to start on the front foot – up more than 1%.

The main sour note for Majestic came from its handful of stores in northern France, as the number of UK shoppers visiting channel ports continued to decline. Like-for-like sales were 4.3% lower in the half-year, although chief executive Tim How said the stores remained a profitable part of the business.

Shareholders will receive an interim dividend of 1.9p a share, an increase of 26.7% on a year earlier.