Barbecue summer warms Majestic
A 39% jump in Prosecco sales lifted half-year profits at wine merchant Majestic after more Britons turned to the tipple to toast the good summer weather.
Profits before tax in the 26 weeks to 30 September rose 4.2% on last year to £9.5 million, while total sales increased 3.3% to £130.2 million.
As well as strong demand for the £9-£10 Italian sparking wine, chief executive Steve Lewis said the barbecue summer also boosted sales of Rosé from Provence by 50%, and Argentinian Malbec by 40%.
"The UK population is falling in love with wine and continues to do so," he said.
However, distortions caused by the timing of Easter and the Jubilee last year caused a 0.4% fall in like-for-like sales, which do not include the new stores the Watford-based chain has been adding in its major expansion drive.
The company recently added six shops to its portfolio and is set to launch its 200th in Petersfield on Friday. It has plans for five more locations before Christmas as part of ambitions to grow to 330 sites within eight years.
Mr Lewis said its new look 'click and collect' online business will also be an important driver of growth, particularly in the critical 14 days of trading before Christmas. Online orders count for roughly a tenth of total UK retail sales after growing 8.3% in the half year.
He added that the increasing popularity of entertaining at home should continue to boost demand for its 'fine wine' range, which it recently consolidated to focus on bigger brands. Sales of still wine priced at £20 or more per bottle grew 15.6% during the period to £7.4 million.
"These results show we continue to make steady progress towards our strategic growth objectives and we are very well prepared for the peak Christmas trading period," said Mr Lewis.
Following the results, Majestic's board upped its interim dividend by 5% to 4.2p per share, which will be paid on January 3.