majestic-wineMajestic Wine – What They Do

It’s pretty simple really, Majestic Wine (MJW) sell wine.

This from their website:

Majestic is the largest wine specialist in the UK, with 193 stores (as of 19th June 2013) selling brilliant wine by the mixed case. Majestic differentiates itself by the high quality of its customer service and advice, the diversity and quantity of stock available to purchase at each store, its dedicated on-site customer parking, wines to taste for free every day, the ability to order in-store or online and the availability of free delivery throughout mainland UK.

Stop, stop, you had me at free wine.

Anyway, Majestic is not really looking to compete with your local off-licence – two for one on the Rioja mate and I’ll throw in ten Winston Menthols. No, they’ve set the bar a little higher, aiming at the market that wants to know a little about the wine’s region, the soil and the grape, instead of looking for the lowest coefficient of price to alcohol content volume.

Majestic’s UK footprint currently stands at 193 stores (as of 19th June 2013). Of those, 16 were opened in the previous financial year (source: preliminary results).

Majestic believes there’s scope to open another 137 stores in the UK bringing that total up to 330.

They’ve got a couple of stores operating out of Calais in Northern France where UK customers can take advantage of France’s lower rate of alcohol duty.

Majestic’s stable also includes Lay & Wheeler – an international fine wine merchant specialising in en primeur, in bond and fine wine sales, cellarage and broking.

Majestic Wine – Recent News and Reports

Here are some highlights from Majestic Wine’s preliminary results for the year ended 1st April 2013:

  • Group profit before tax increased by £0.5m to £23.7m (2012: £23.2m).
  • Underlying sales excluding wholesale were up 2.6% to £268.6m (2012: £261.8m).
  • Like for like sales in UK retail stores up 1.0%.
  • Final dividend of 11.8p net per share, bringing the total dividend for the year to 15.8p, an increase of 0.2p on last year (2012: 15.6p)

Here’s a link to the full report.

Majestic Wine – Some Choice Recent Quotes

“Majestic is in excellent shape and has made good progress with the four key elements of our future growth strategy: new stores, business customers, ecommerce and fine wine.”

- Steve Lewis, CEO of Majestic Wine

Majestic Wine – Our Thoughts

If wine’s not a tried and time-tested product, I’m not sure what is; just ask the ancient Greeks or Romans. And whilst there’s no shortage of competitors in the retail wine industry in the UK, Majestic’s modus operandi of targetting the more well-informed imbiber – providing free tastings, knowledgeable staff who are up for a chat and a diverse wine offering – seems to be paying off.

Whilst I can’t quote a figure for the average vino spend at your local offy, Majestic’s average spend per transaction for the last financial year was £128 (source: preliminary results).

There’s been an increase in the number of customers who have made purchases in the last twelve months, up 56,000 to 624,000 (source: preliminary results).

There’s also been an increase in the average price of a bottle of still wine purchased at Majestic – up to £7.56 from £7.34 in 2012 (source: preliminary results).

Sales of their fine wine (priced at £20 per bottle and above) also increased by 9.4%, representing 6.5% of UK store sales (source: preliminary results).

And online sales increased 14.7% on last year and now represent 11.1% of UK retail sales (source: preliminary results).

Whilst none of the numbers above are earth-shattering they do show the growth of a company who has its direction defined and a path in place to achieve its goals.

An increasing customer base who are spending more – in-store and online – in a growing number of stores, all makes for a pretty decent business case.

Majestic Wine – How it Landed on our Radar

Majestic nailed 10 of the 12 criteria on one of the personalsed screens we’ve got set up over at Stockopedia.

For the most part we’re happy it meets many of our primary standards in terms of momentum, debt and profitability.

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To whip up your own stock screens or utilise any one of a number of preset screens – including screens capturing the screening rules of investing gurus – sign up for a free trial at Stockopedia and take your investing to the next level.

Majestic Wine – 1 Year and 5 Year Charts

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Charts provided courtesy of SharePrice.co.uk

Majestic Wine – Further Reading