The first half of wine specialist Majestic Wine’s full financial year saw profits grow 20 per cent on the back of a like-for-like (LFL) sales increase of 2.7 per cent year-on-year, according to a statement released today.
In the 26 weeks ending September 26th 2011 the retailer achieved a profit before tax of £8.8 million after total sales rose by 8.7 per cent and its number of active customer grew 7.7 per cent to 534,000.
Whilst the resilient performance over a difficult summer period for the wider economy will have pleased investors, in recent weeks trading has dropped off and is now down on its levels for 2010.
Steve Lewis, CEO of the company, commented: “I am very pleased that Majestic has achieved profit growth of 20 per cent in the half year and we are very well prepared for the important Christmas trading period.”
Over the half, eight new Majestic stores were opened and another three have been added to this since the end of the period, bringing its total store portfolio to 174.
Whilst expansion in bricks and mortar has remained a key objective for the retailer, its most impressive growth over the half-year period came online where sales jumped 8.7 per cent year-on-year and now represent nine per cent of all of its UK retail sales.
Lay & Wheeler, Majestic’s fine wine specialist arm, and the company’s operations in France both saw increases in profits over the half, and its interim dividend rose 15.2 per cent to 3.8p per share.
Current trading has been less successful for Majestic with total sales up just 3.8 per cent and revenues actually down 1.1 per cent LFL in the first six weeks of the second half thanks to two disappointing weeks in the middle of October.
The recent administration of rival retailer Oddbins, which was re-launched at the end of October under new management, shows how precarious the trading environment has been this year and Majestic will now be focusing all its efforts on securing strong Christmas sales.
Phil Wrigley, Chairman of Majestic, reaffirmed that the retailer is well positioned for the important festive season and that the initial response by customers to the firm’s Christmas promotions has been encouraging.