Majestic profits take a tumble

10 November, 2008

Majestic profits dropped 25.5% to £5.6 million in the six months to Sept 29, compared with a similar period the year before.

The company said the drop was the result of “challenging trading conditions arising from the increasingly uncertain economic climate”.

Sales were up 3.4% to £94.1 million, and UK sales rose 4.7%, but like-for-like revenue was down by 2.1%.

Like-for-like sales in the first five weeks of the new financial year, to Nov 3, were down 4.7% on a year ago.

Chief executive Steve Lewis said: “I am pleased that we have maintained our UK wine market share in such challenging conditions.

“I am confident that Majestic, with its robust business model and highly-differentiated customer proposition can maintain its market position going forward.”

The average bottle price in Majestic increased to £6.19, from £5.85 last year, and sales of wine priced over £20 were ahead by more than 10%.

The chain aims to have dedicated fine wine areas in 53 stores by Christmas.

Web orders were up 11.5%, but sales to private and business customers were both down.

Majestic shares fell sharply in the opening hour of trading after the results were announced.

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