Majestic Wine wasn’t toasting sales figures this morning having recorded a fall of 22.5% in pre-tax profit – down to £18.4m from £23.8m on a year earlier. But its boss remains optimistic.
The wine specialist, Britain’s largest, acquired its smaller rival Naked Wines in April. The charges are reflected in the annual profits, the company said.
Naked Wines former CEO Rowan Gormley, who was bumped up to Chief Exec of the newly merged retailer 10 weeks ago, admitted that Majestic Wines’ short-term profit would suffer in lieu of investments.
Gormley is working on an ongoing strategic review of the business, conclusions of which are expected to be revealed in half-year results.
Majestic has been pushing online sales, which rose 12.4% in the last year helped by the Naked takeover.
“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,” Gormley said. “ Majestic Wine has many unique competitive advantages… When combined with Naked Wine’s digital strengths, and both businesses ability to source exclusive and exciting wines for their customers, we are uniquely placed to build a fast growing international leading wine specialist.”
He added “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.
At the same time we aim to maintain the international growth trajectory of Naked Wine and crystallise the benefits of having the two businesses in the same Group. I am confident that we will create significant value for our shareholders over the medium term.”