​Majestic profits up as Naked Wines drives growth

Pre-tax profit stood at £8.3m, a marked comparison with last year’s £1.5m loss. Sales rose 4% to £477.7m.

Naked Wines drove profitable growth, however, with EBITDA 571% up on the previous year as sales rose 11.3%.

Majestic retail profitability was relatively flat at 0.4% despite underlying sales growth of 1.9% at the division. The retailer attributed this to foreign exchange pressures offsetting better cost control.

At Majestic’s commercial arm, adjusted EBIT rose 1.7% despite sales decreasing 5.6% to £43.4m. Fine-wine business Lay and Wheeler’s adjusted EBIT dipped 1% on 0.2% sales growth to £14.5m.

Group chief executive Rowan Gormley said: “We are making headway despite headwinds.

This past year we delivered profitable growth, despite a tough UK market, which is a testament to our people, our international positioning and the robustness of our model.

“If the UK is headed for a retail crisis, as some commentators are suggesting, then we are planning for a great crisis. We founded Naked Wines during the financial crisis of 2008 and proved that investing in acquiring customers and generating loyalty through great products and service will drive profitable growth even in a tough market.”

The group is two years into a three-year turnaround plan, which aims to grow faster, deliver profitable growth and build a solid platform for growth. In the upcoming year, it plans to double spend in new customer acquisition to £28m a year.