12th Nov 2007 07:00
Majestic Wine PLC12 November 2007 FOR IMMEDIATE RELEASE 12 November 2007 INTERIM RESULTS Majestic Wine PLC ("Majestic"), the UK's largest wine warehouse chain, todayannounces its interim results for the 26 weeks ended 1 October 2007. Highlights • Profit before tax increased by 16.7% to £7.5m (2006: £6.5m). • Total sales of £91.0m (2006: £88.3m). Like for like UK sales up 2.4% • Interim dividend increased by 22% to 2.8p net per share (2006:2.3p). • Average bottle of wine purchased at Majestic is now £5.85 (2006: £5.66). Average spend per transaction has risen to £128 (2006: £121). • Fine wine sales continued to show good growth. Sales of wines priced at £20 and above increased 17.5% on last year. Dedicated fine wine display areas in 38 stores by Christmas. • During the period we opened a new store in Sonning and re-sited stores in Chester, St. Albans and Shirley in Birmingham. Four new stores opened during October (Aberdeen, Macclesfield, Brentford Lock and Sevenoaks) and a planned store opening in Stratford-upon-Avon prior to Christmas, bringing the total number of UK stores to 141. • Strong growth in website orders up 22% on last year. With an improved website launched in October. Commenting on the results Tim How, Chief Executive of Majestic, said: "Like for like UK sales for the four weeks from 2 October to 29 October were up2.2%. Whilst we expect the trading environment to continue to be challenging, weare well prepared for the important Christmas trading period." For further information, please contact: Tim HowNigel AlldrittMajestic Wine PLC Tel: 01923 298200 Tim Thompson / Nicola Cronk/Susanna GaleBuchanan Communications Tel: 020 7466 5000 Majestic Wine PLC's nominated adviser is Landsbanki (UK) Securities. Contact 0207426 9000. High resolution images are available for the media to download free of chargefrom www.vismedia.co.uk Chairman's Statement I am pleased to announce a 16.7% increase in profit before tax to £7.5m for thefirst half of the 2007/2008 financial year. Total sales were up 3.0% to £91.0m with UK like for like sales up 2.4%. Weexperienced an unusual sales pattern during the first half. Sales were gooduntil mid-June but then slowed until the end of July as we endured a prolongedperiod of unseasonably cold and wet weather. Trading strengthened from thebeginning of August as customers responded to additional promotional activity.UK like for like sales for the eight weeks from 31 July to the end of the halfgrew 6.4%. We saw good growth in sales of wine from Bordeaux, Beaujolais, Italy, Spain, NewZealand and Argentina. Sales of Champagne and rose also grew well. The averagebottle price of still wine purchased at Majestic is now £5.85, up from £5.66last year. The average spend per transaction has increased to £128 from £121. Sales of fine wine continued to show good growth, with sales of wines priced at£20 and above increasing by 17.5% on last year. We will have dedicated fine winedisplay areas in 38 stores by Christmas. Ecommerce We have seen strong growth in the value of orders placed via our website,www.majestic.co.uk, up 22% on last year. In October we re-launched our websiteand are pleased with the initial customer response. The new site delivers animproved customer experience, with better search and navigation options, andfeatures more content to emphasise our wine expertise. New Stores During the period we opened in Sonning, re-sited our stores in Chester and St.Albans and relocated from Acocks Green to Shirley in Birmingham. In October weopened in Aberdeen, Macclesfield, Brentford Lock and Sevenoaks. We will beopening in Stratford-upon-Avon before Christmas bringing the total number ofstores in the UK to 141. In early 2008 we plan to open new stores in Herefordand Bangor and will be re-siting our store in Kingston. We have several morestores at advanced stages of negotiation. International Wine Challenge We are delighted to have been awarded both the "High Street Chain of the Year"and the overall "UK Merchant of the Year" at the International Wine Challenge2007. The judges commended Majestic for "competitive prices, excellent customerservice and impressive range". France We saw a like for like sales decline of 1.0% at our stores in France. Howeverprofit before interest and tax for the period increased 2.4% to £894k as aresult of improved gross margins and good cost control. During the period weupgraded our EPOS system in France, which will allow us to build an improvedcustomer database. Dividend We are declaring an increased interim dividend of 2.8p net per share, up by 22%on last year. The dividend will be paid on 4 January 2008 to shareholders on theregister at the close of business on 7 December 2007. Share Buy-Back Programme Last year we announced our intention to buy back Ordinary Shares up to a maximumvalue of £20m. To date we have made purchases of 3.01m Ordinary Shares for anaggregate consideration of £10.6m. When appropriate, the Board intends tocontinue to buy back shares, up to the same overall maximum. Future Prospects Like for like UK sales for the four weeks from 2 October to 29 October 2007 wereup 2.2%. Whilst we expect the trading environment to continue to be challenging,we are well prepared for the important Christmas trading period. Simon Burke Chairman 12 November 2007 Group Income Statement For the 26 weeks ended 1 October 2007 26 weeks 26 weeks 53 weeks ended ended ended 01.10.07 25.09.06 02.04.07 Note £000 £000 £000-------------------------------- -------- -------- -------- --------Revenue 91,005 88,345 191,193Cost of sales (71,380) (70,550) (150,879)-------------------------------- -------- -------- -------- --------Gross profit 19,625 17,795 40,314Distribution costs (7,747) (7,309) (14,945)Administrative costs (4,712) (4,567) (10,218)Other operating income 241 358 534-------------------------------- -------- -------- -------- --------Operating profit 7,407 6,277 15,685Finance revenue 141 184 474Finance costs (6) - (1)-------------------------------- -------- -------- -------- --------Profit before taxation 7,542 6,461 16,158UK income tax 4 (2,154) (1,905) (4,675)Overseas income tax 4 (290) (298) (578)-------------------------------- -------- -------- -------- --------Profit for the period attributableto equity shareholders of the parent 5,098 4,258 10,905company -------- -------- -------- -------- -------------------------------- Earnings per shareBasic 5 8.0p 6.6p 16.8pDiluted 5 7.9p 6.5p 16.6p Dividend per share 6 2.8p 2.3p 8.5p Group Balance Sheet As at 1 October 2007 As at As at As at 01.10.07 25.09.06 02.04.07 £000 £000 £000---------------------------------- --------- -------- --------Non current assetsGoodwill and intangible fixed assets 6,808 6,563 6,426Property, plant and equipment 36,982 34,731 36,723Prepaid operating lease costs 1,460 1,244 1,251Deferred tax asset 952 1,768 1,271---------------------------------- --------- -------- -------- 46,202 44,306 45,671Current assetsInventories 33,951 30,221 30,335Trade and other receivables 9,303 7,251 6,731Financial instruments at fair value 486 - 69Cash and cash equivalents 1,141 7,042 4,484---------------------------------- --------- -------- -------- 44,881 44,514 41,619Non current assets held for sale 1,351 - 588---------------------------------- --------- -------- --------Total assets 92,434 88,820 87,878---------------------------------- --------- -------- -------- Current liabilitiesTrade and other payables (40,022) (36,014) (33,648)Bank overdraft (1,214) - -Provisions (112) (132) (318)Deferred lease inducements (116) (95) (95)Financial instruments at fair value - (263) (4)Current tax liabilities (2,119) (969) (1,321)---------------------------------- --------- -------- -------- (43,583) (37,473) (35,386)Non current liabilitiesProvisions (65) (33) (60)Deferred lease inducements (709) (680) (703)Deferred tax liabilities (377) (404) (404)---------------------------------- --------- -------- --------Total liabilities (44,734) (38,590) (36,553)---------------------------------- --------- -------- ------------------------------------------ --------- -------- --------Net assets 47,700 50,230 51,325---------------------------------- --------- -------- -------- Shareholders' equityCalled up share capital 4,717 4,905 4,803Share premium account 9,852 9,034 9,518Capital reserve - own shares (107) (120) (120)Capital redemption reserve 226 - 125Currency translation reserve 122 (64) (119)Retained earnings 32,890 36,475 37,118---------------------------------- --------- -------- --------Equity shareholders' funds 47,700 50,230 51,325---------------------------------- --------- -------- -------- Group Cash Flow Statement For the 26 weeks ended 1 October 2007 26 weeks 26 weeks 53 weeks ended ended ended 01.10.07 25.09.06 02.04.07 £000 £000 £000--------------------------------- ---------- --------- --------Cash flows from operating activities:Profit for the period 5,098 4,258 10,905Income tax expenses 2,444 2,203 5,253Net finance revenue (135) (184) (473)Amortisation and depreciation 1,345 1,269 2,733Profit on disposal of non current assets (96) (239) (410)Increase in inventories (3,616) (1,523) (1,637)Increase in trade and other receivables (2,572) (1,135) (615)Increase/(decrease) in trade and otherpayables 6,362 2,306 (67)Increase/(decrease) in deferred income 27 (46) (23)Change in fair value of derivativeinstruments (421) 343 15(Decrease)/increase in provisions (201) (121) 92Share based payments 233 199 577--------------------------------- ---------- --------- --------Cash generated from operations 8,468 7,330 16,350 UK income tax paid (1,330) (1,324) (2,595)Overseas income tax paid (169) (304) (618)--------------------------------- ---------- --------- --------Net cash generated by operating activities 6,969 5,702 13,137 Cash flows from investing activitiesInterest received 147 167 464UK income tax paid (62) (16) (78)Overseas income tax paid (10) (8) (18)Purchase of non current assets (3,250) (3,571) (8,109)Receipts from sales of non current assets 28 5 1,560Receipts from sales of non current assetsheld for sale 526 1,539 697--------------------------------- ---------- --------- --------Net cash used by investing activities (2,621) (1,884) (5,484)--------------------------------- ---------- --------- --------Cash inflow before financing 4,348 3,818 7,653 Cash flows from financing activitiesInterest paid - - (1)Issue of Ordinary Share capital 149 704 1,211Shares re-purchased (5,168) - (5,445)Equity dividends paid (3,961) (3,327) (4,808)--------------------------------- ---------- --------- --------Net cash used by financing activities (8,980) (2,623) (9,043)--------------------------------- ---------- --------- --------Net (decrease)/increase in cash and cashequivalents (4,632) 1,195 (1,390)Cash and cash equivalents at beginning ofperiod 4,484 5,916 5,916Effect of foreign exchange differences 75 (69) (42)--------------------------------- ---------- --------- --------Cash and cash equivalents at end of period (73) 7,042 4,484--------------------------------- ---------- --------- -------- Reconciliation of cash and cash equivalentsCash and cash equivalents per Group balancesheet 1,141 7,042 4,484Bank overdraft per Group balance sheet (1,214) - ---------------------------------- ---------- --------- --------Cash and cash equivalents per Group cash (73) 7,042 4,484flow ---------- --------- ----------------------------------------- Statement of Changes in Equity For the 26 weeks ended 1 October 2007 Capital reserve Total Share own shares Capital Currency share- Share premium held in redemption translation Retained holders' apital account ESOT reserve reserve earnings funds £000 £000 £000 £000 £000 £000 £000--------------------------- ------ ------ ------- ------ ------ ------ ------At 27 March 2006 4,864 8,371 (391) - 107 35,694 48,645Share issue 41 663 - - - - 704Shares vesting under deferredbonus scheme - - 271 - - (271) -Transfer to shareholders'funds - employee costsexpected to be satisfied inshares - - - - - 199 199--------------------------- ------ ------ ------- ------ ------ ------ ------Profit for the period - - - - - 4,258 4,258Currency translationdifferences on foreigncurrency net investments - - - - (171) - (171)Tax debit on employee shareoptions - - - - - (78) (78)--------------------------- ------ ------ ------- ------ ------ ------ ------Total income and expensefor the period - - - - (171) 4,180 4,009Equity dividends paid - - - - - (3,327) (3,327)--------------------------- ------ ------ ------- ------ ------ ------ ------At 25 September 2006 4,905 9,034 (120) - (64) 36,475 50,230Share issue 23 484 - - - - 507Transfer to shareholders'funds - employee costsexpected to besatisfied in shares - - - - - 378 378--------------------------- ------ ------ ------- ------ ------ ------ ------Profit for the period - - - - - 6,647 6,647Currency translationdifferences on foreigncurrency net investments - - - - (55) - (55)Tax credit on employee shareoptions - - - - - 544 544--------------------------- ------ ------ ------- ------ ------ ------ ------Total income and expensefor the period - - - - (55) 7,191 7,136Purchase and cancellationof share capital (125) - - 125 - (5,445) (5,445)Equity dividends paid - - - - - (1,481) (1,481)--------------------------- ------ ------ ------- ------ ------ ------ ------At 2 April 2007 4,803 9,518 (120) 125 (119) 37,118 51,325Share issue 11 138 - - - - 149ESOT share issue 4 196 (100) - - (100) -Shares vesting under deferredbonus scheme - - 113 - - (113) -Transfer to shareholders'funds - employee costsexpected to be satisfied inshares - - - - - 233 233--------------------------- ------ ------ ------- ------ ------ ------ ------Profit for the period - - - - - 5,098 5,098Currency translationdifferences on foreigncurrency net investments - - - - 241 - 241Tax debit on employee shareoptions - - - - - (217) (217)--------------------------- ------ ------ ------- ------ ------ ------ ------Total income and expensefor the period - - - - 241 4,881 5,122Purchase and cancellationof share capital (101) - - 101 - (5,168) (5,168)Equity dividends paid - - - - - (3,961) (3,961)--------------------------- ------ ------ ------- ------ ------ ------ ------At 1 October 2007 4,717 9,852 (107) 226 122 32,890 47,700--------------------------- ------ ------ ------- ------ ------ ------ ------ Notes to the Group Interim Financial Statements 1. General Information Majestic Wine PLC is a public limited company ("Company") incorporated in theUnited Kingdom under the Companies Act 1985 (registration number 2281640). TheCompany is domiciled in the United Kingdom and its registered address isMajestic House, Otterspool Way, Watford, WD25 8WW. The Company's Ordinary Sharesare traded on the Alternative Investment Market ("AIM"). Copies of the InterimReport are being sent to shareholders. Further copies of the Interim Report andAnnual Report and Accounts may be obtained from the address above. The Group's principal activity is the retailing of wines, beers and spirits. 2. Basis of preparationThe interim financial statements of the Group for the 26 weeks ended 1 October2007, which are unaudited, have been prepared in accordance with the accountingpolicies set out in the annual report and accounts for the 53 weeks ended 2April 2007. The financial information contained in the interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefinancial information for the full preceding year is based on the statutoryaccounts for the 53 weeks ended 2 April 2007. Those accounts, upon which theauditors, Ernst & Young LLP, issued an unqualified audit opinion, have beendelivered to the Registrar of Companies. As permitted, this interim report has been prepared in accordance with UKlisting rules and not in accordance with IAS 34 "Interim Financial Reporting" -therefore it is not fully in compliance with IFRS. The interim financial statements are presented in sterling and all values arerounded to the nearest thousand pounds (£000) except when otherwise indicated. 3. Segment reporting The Group's primary segmental reporting format is geographical, based on theGroup's management and internal reporting structure. Secondary information isreported by a single business segment, retailing. 26 weeks 26 weeks 53 weeks ended ended ended 01.10.07 25.09.06 02.04.07 £000 £000 £000---------------------------------- --------- -------- -------- RevenueRetailing - UK 84,783 81,932 178,512Retailing - France 6,222 6,413 12,681---------------------------------- --------- -------- --------Total revenue 91,005 88,345 191,193---------------------------------- --------- -------- --------Segment resultRetailing - UK 6,513 5,404 13,971Retailing - France 894 873 1,714Finance revenue less finance costs 135 184 473---------------------------------- --------- -------- --------Profit before tax 7,542 6,461 16,158---------------------------------- --------- -------- -------- 4. Taxation Taxation for the 26 weeks to 1 October 2007 has been calculated by applying theestimated tax rate for the current financial year ending 31 March 2008 adjustedby the one-off impact of the prospective reduction in the UK corporation taxrate from 30% to 28% on those deferred tax assets and liabilities that areexpected to be deductible or payable post year end. Notes to the Group Interim Financial Statements 5. Earnings per share Basic earnings per share is calculated on profit for the period attributable toequity shareholders of £5,098,000 (2006: £4,258,000) apportioned over theweighted average number of Ordinary Shares that were in issue for the period:63,590,078 (2006: 64,975,323). The calculation of diluted earnings per share isin accordance with IAS 33 - Earnings Per Share. The weighted average number ofOrdinary Shares in issue has been adjusted to take account of the effect of alldilutive potential Ordinary Shares. The number of shares used in the calculationwas 64,354,584 (2006: 65,909,946). 6. Dividend A dividend of 6.2p net per share was paid to shareholders on 10 August 2007. Aninterim dividend of 2.8p per share will be paid on 4 January 2008 toshareholders on the register at the close of business on 7 December 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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