15th Jun 2015 07:21
LONDON (Alliance News) - Majestic Wine PLC Monday said it is trading in line with management expectations so far in its current financial year, as it posted a decline in pretax profit for the last year due to costs related to its acquisition of online wine retailer Naked Wines.
For the year to March 30, the company posted a pretax profit of GBP18.4 million, down from GBP23.8 million a year earlier, as GBP1.8 million in costs related the Naked Wines acquisition and higher operating costs offset a rise in revenue to GBP284.5 million from GBP278.2 million.
The company is not planning to pay a final dividend for fiscal 2015 as a result of the Naked Wines buy, in an effort to ensure it has enough working capital and cash to invest. It intends to reinstate progressive dividends by the financial year ending in 2018.
Majestic Wine said the recently-ended financial year "proved to be challenging" as growth in online and commercial sales were offset by a decline in sales at more mature Majestic stores, but despite a fiercely competitive environment the company said it had grown its market share by 0.1%.
The company opened ten new stores during the year, and closed three locations, bringing its total number of stores at the end of the year to 212.
Naked Wines founder Rowan Gormley was appointed chief executive office of Majestic following the acquisition in April, and the company is undertaking a strategic review which it plans to announce in more detail with its interim results.
"I have only been group chief executive for ten weeks but it is clear to me that the enlarged Majestic Group has excellent future prospects," said Gormley in a statement. "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 in this excellent business."
Shares in Majestic were trading down 2.6% at 428.71 pence early Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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