Majestic Wine Swings To Annual Loss, Progressing On Store Estate Sale

(Alliance News) - Majestic Wine PLC on Thursday swung to a annual loss on increased investment in ...

Alliance News 13 June, 2019 | 10:00AM
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(Alliance News) - Majestic Wine PLC on Thursday swung to a annual loss on increased investment in its Naked Wines online business, weaker Retail trading, and a large impairment.

The UK wine retailer also made board changes and said it is in advanced discussions over the possible sale of its high-street store business, Majestic Retail & Commercial. Sale talks are expected to be finalised in the summer.

"As laid out in March, we have taken the difficult but important decision to focus on Naked and exit from Majestic. As at the date of this announcement, our intention is to sell the business, and we are at an advanced stage with multiple bidders. If we are unable to complete the process over the summer, in time for the important Christmas and New Year season, we will continue to run the two businesses independently of each other and look to restart the process in 2020," said Chief Executive Rowan Gormley.

Shares in Majestic were trading 7.9% lower at 293.00 pence each on Thursday morning.

For the financial year ended April 1, the retailer recorded a pretax loss of GBP8.5 million compared with a GBP8.3 million profit the year before, on revenue of GBP506.1 million and GBP476.1 million, respectively. The company recorded a non-cash impairment charge relating to the Retail store estate of GBP11.1million in the period.

Naked Wines, to which the company intends to shift its focus, delivered underlying sales growth of 15% in the year. The company plans to increase its investment in Naked Wines by further GBP7 million in 2020 financial.

Majestic Wine suspended its final dividend, having paid out 5.2p the year prior, but said it will replace this with a special dividend equal to last year's payout if the sale of Majestic goes through.

Separately, the company said Greg Hodder will step down as chair as the conclusion of August's annual general meeting, to be replaced by John Walden. In addition, president of the US Naked Wines division, Nicholas Devlin, will take up the role of group chief operating officer while retaining his divisional head role.

By Tapan Panchal; tapanpanchal@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Majestic Wine PLC 275.00 GBX -3.00 -
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