RNS Number:3266M
Majestic Wine PLC
16 June 2003
16 June 2003
MAJESTIC WINE PLC
PRELIMINARY RESULTS
'10th consecutive year of record profits'
Majestic Wine PLC ("Majestic"), the UK's largest wine warehouse chain with
106 stores, today announces its preliminary results for the year ended
31 March 2003.
HIGHLIGHTS
* Profit before tax and amortisation increased by 37.9% to #8.34m
(2002: #6.05m).
* Total sales up 20.1% to #125.7m (2002: #104.6m)
* Final dividend of 8p net per share, bringing the total dividend to 11p net
per share up 37.5% (2002: 8p)
* Good initial sales at all five new stores opened during the financial year.
Dorchester (100th store), Bromley, Leicester, Camberley and Barnstaple.
* New stores in Uxbridge and Wilmslow opened and a re-site of store in New
Barnet since the year end. New store in St. John's Wood due to open in early
July with Victoria, Kendal, Warrington and Roehampton for later in the year.
* Potential for 175 UK locations.
* Wine and Beer World successfully relaunched with sales growth in France up
13.7% for the year in the two Calais stores and Cherbourg. Sales growth in
the first ten weeks of the financial year up 27.7%
* UK like for like sales growth in the first ten weeks of the financial year
up 8.1%. A very satisfactory performance given the strong comparatives over
the previous two years.
Commenting on the results Tim How, Chief Executive of Majestic, said:
"We believe that Majestic is in a strong position to attract new customers
and continue to increase market share. We are confident for the future growth
of Majestic."
For further information, please contact:
Tim How Tel: 01923 298200
Majestic Wine PLC
Tim Thompson or Nicola Cronk Tel: 020 7466 5000
Buchanan Communications
Chairman's Statement
I am very pleased to report that we have achieved our tenth consecutive year
of record profits and successfully relaunched our French business as Wine and
Beer World.
The Group's continued strong progress was reflected in an increase of 37.9%
in profit before tax and amortisation of goodwill to #8.34m from #6.05m last
year. Total Group sales were up 20.1% to #125.7m from #104.6m last year and
like for like UK sales were up 9.7%.
I would like to thank all our staff for all their hard work over the past
twelve months without which we could not have achieved these excellent
results. Their dedication to delivering great standards of customer service
is fundamental to the Group's continuing success.
Dividend
We are recommending for approval by shareholders at the Annual General
Meeting a final dividend of 8 pence net per share. This will be payable on 8
August 2003 to shareholders on the register on 4 July 2003 and brings the
total dividend to 11 pence net per share. This represents an increase of 3
pence net per share or 37.5% on the total 2002 dividend, in line with the
rise in underlying Group earnings.
Non-Executive Director
Gerald Leahy who has served on the Board as a non-executive Director for the
past seven years is retiring at the forthcoming Annual General Meeting. I
would like to thank him for his significant contribution to the Group's
development since flotation on the Alternative Investment Market (AIM) in
1996.
AIM Award
We were delighted to receive in October the AIM Company of the Year Award
sponsored by PricewaterhouseCoopers LLP in association with the London Stock
Exchange. We were particularly pleased as this was the second time we have
received an AIM award.
Current Trading
Sales growth in the first ten weeks of the financial year from 1 April to 9
June has been most satisfactory given the very strong comparatives over the
previous two years with UK like for like sales up 8.1%.
We continue to see considerable opportunities for the future growth of
Majestic.
Review of Operations
We have seen another very satisfactory increase in the number of customers on
the mailing list who have made purchases in the last twelve months, up by
8.5%, to 294,000 from 271,000 this time last year. Over two years the number
of active customers on the mailing list has increased 20%. The average spend
per transaction at our stores has risen to #104 from #102 last year.
Wine remains the major part of our business at over 80% of sales and the UK
market continues to show 6% annual growth. The average bottle price of still
wine purchased at Majestic is #5.30 which is 36% above the market average at
#3.89. We have seen particularly strong sales growth over the year from
Australia, South Africa, Italy, Southern France and Champagne.
One of the key points of difference between Majestic and the competition is
the diversity and quantity of stock available to purchase in each of our
stores. We stock over 800 wines to suit all occasions ranging in value from
below #3 to #700 per bottle.
We focus our annual marketing activity on five distinct periods - Spring,
Summer, Autumn, Christmas and Winter, each supported by a strong promotional
programme and the mailing of our price list to customers on our database. A
selection of wine regions is chosen for each campaign and wines are made
available to customers for tasting over themed weekends. We have over 350
wines on offer for the current Summer campaign lasting from the beginning of
May to the end of August including generic offers in the featured regions,
Loire and Chile.
The acquisition of interesting parcels of wine is an important part of our
success, increasing variety within the range and enhancing the value offered
to our customers. Recently we have stocked parcels of wine from California,
Australia and Chile.
New Stores
We opened in five new locations during the financial year starting with our
100th store in Dorchester as well as in Bromley, Leicester, Camberley and
Barnstaple. Dorchester and Barnstaple were previously car showrooms, Bromley
was a former public house, Camberley was formerly a salmon processing unit
and Leicester a new retail development. We have been pleased with initial
sales at these new sites.
Since the year end we have opened new stores in Uxbridge, previously a pine
furniture warehouse, and Wilmslow, formerly a public house. These sites were
both purchased giving us a total of 19 freehold properties. In addition we
have re-sited our New Barnet store into a larger retail warehouse nearby.
We will be opening our 107th store in St. John's Wood in early July. This
store is twice the size of the average Majestic store and will incorporate a
dedicated fine wine centre. Looking forward to later in the year we are
currently converting a former public house in Roehampton, which we own, and
are under contract in Victoria, Kendal and Warrington.
We continue to search actively for sites with around 3,000 square feet of
space with good parking and prominence on a main road and now envisage being
able to roll out the Majestic format to around 175 locations in the UK over
the next few years.
Internet
Our website, www.majestic.co.uk, has been redesigned with new software
enabling us to offer customers access to their online purchase history and
improved navigation around the site. Sales orders received via the site over
the financial year represented 3.0% of UK sales.
We continue to see a rapid growth in the traffic on the site which reflects
its importance to the Company as a reference site and marketing tool. We have
a growing email database now with over 35,000 addresses giving us the ability
to communicate new offers quickly and cost effectively. Over the past year 30
communications were made in this manner, a recent example being the #8.49
Brossault Champagne promotion over Easter.
We have also introduced online ordering for Wine and Beer World, which allows
customers to pre-order for collection before travelling to France as well as
download price lists and maps. This service is proving very popular and now
accounts for 3.9% of sales.
This year we will be upgrading to a much more powerful processor which will
enable us to further improve functionality and provide capacity to handle
forecast increases in demand. In addition we continue to enhance the software
and are developing a fine wine ordering site to coincide with the launch of
the new fine wine centre located in our St. John's Wood store.
Corporate Sales
Sales to corporate customers accounted for 27% of our UK sales up from 25%
last year and we continue to see opportunities for further growth.
We have appointed three additional business development managers outside
London bringing the total to eight. They are responsible for finding new
business account customers with all subsequent customer service and logistics
handled by the nearest Majestic store.
In addition to the regional structure, our central London team based near
King's Cross sell to larger corporate customers in the City and West End. At
the beginning of the year we doubled the size of our depot in King's Cross
giving us the space to pursue sales growth in this area.
Wine and Beer World
Last Autumn we relaunched our French business as "Wine and Beer World". We
introduced an expanded range of wines selected from the Majestic range and
improved promotional offers. Customer service has been enhanced by training
our staff in customer care and wine knowledge and by seconding Majestic staff
to work in France. We substantially expanded our largest warehouse, situated
in the Marcel Doret commercial zone close to the ferry terminal, to some
12,000 square feet of retail space with a car park providing around 45
spaces. The store features a new design and merchandise layout with improved
depth of stock and a large customer tasting area. We have been pleased with
sales growth in France which was 13.7% up for the year in the two Calais
stores and Cherbourg.
In January, we closed our store in Le Havre as the site was being
redeveloped. We have not sought to re-site the store as the volume of
customers in the area taking advantage of the cross Channel price
differential is relatively low. Previously the store accounted for only 6% of
total Wine and Beer sales.
We are delighted with sales growth at our three French stores since the year
end up 27.7% in the ten weeks from 1 April to 9 June 2003.
Future Prospects
We believe that Majestic is in a strong position to attract new customers and
continue to increase market share. We are confident for the future growth of
Majestic.
Group Profit & Loss Account
For the year ended 31 March 2003
Year to Year to
31.03.03 01.04.02
#000 #000
Turnover 125,675 104,603
Cost of sales (99,957) (83,373)
Gross profit 25,718 21,230
Distribution costs (10,726) (9,653)
Administrative costs (7,116) (5,994)
Rental income 371 382
Operating profit 8,247 5,965
Net interest payable (274) (84)
Profit on ordinary activities before taxation 7,973 5,881
Taxation (2,584) (1,982)
Profit on ordinary activities after taxation 5,389 3,899
Dividend
Interim - paid (458) (378)
Final - proposed (1,223) (827)
Retained profit for the year 3,708 2,694
Basic earnings per share 35.8p 26.4p
Diluted earnings per share 34.8p 25.7p
Underlying earnings per share 38.2p 27.6p
Diluted underlying earnings per share 37.1p 26.8p
Group Statement of Total Recognised Gains and Losses
For the year ended 31 March 2003
Year to Year to
31.03.03 01.04.02
#000 #000
Profit for the year attributable to members of the 5,389 3,899
parent company
Currency translation differences on foreign currency 124 (10)
net investments
Total gains and losses relating to the year 5,513 3,889
Balance Sheets
As at 31 March 2003
Group Company
31.03.03 01.04.02 31.03.03 01.04.02
#000 #000 #000 #000
Fixed assets
Intangible fixed assets 6,875 7,245 - -
Tangible fixed assets 21,498 17,864 - -
Investments - - 12,021 12,021
28,373 25,109 12,021 12,021
Current assets
Stocks 20,832 18,486 - -
Debtors 4,425 3,803 10,492 12,232
Cash at bank and in hand 4,567 4,897 - -
29,824 27,186 10,492 12,232
Creditors:
Amounts falling due within one (29,786) (25,874) (2,209) (2,296)
year
Net current assets 38 1,312 8,283 9,936
Total assets less current 28,411 26,421 20,304 21,957
liabilities
Creditors:
Amounts falling due after more (3,265) (5,715) (5,265) (7,715)
than one year
Provision for liabilities and (305) (263) - -
charges
Net assets 24,841 20,443 15,039 14,242
Capital and reserves
Called up share capital 4,587 4,513 4,587 4,513
Share premium account 4,766 3,868 4,766 3,868
Revaluation reserve 22 22 - -
Profit and loss account 15,466 12,040 5,686 5,861
Equity shareholders' funds 24,841 20,443 15,039 14,242
The financial statements were approved by the Board on 16 June 2003.
Group Cash Flow Statement
For the year ended 31 March 2003
Year to Year to
31.03.03 01.04.02
#000 #000
Net cash inflow from operating activities 11,424 8,847
Returns on investments and servicing of finance
Interest paid (65) (30)
Loan note interest and guarantee fees (140) (72)
Term loan interest (184) -
Interest received 107 87
(282) (15)
Taxation
UK corporation tax paid (2,449) (1,654)
Overseas corporation tax received/(paid) 91 (282)
(2,358) (1,936)
Capital expenditure
Payments to acquire tangible fixed assets (5,411) (4,294)
Receipts from sales of tangible fixed assets 23 34
Net cash outflow from capital expenditure (5,388) (4,260)
Acquisitions
Purchase of subsidiary undertaking - (184)
Cash acquired with subsidiary undertaking - 691
- 507
Equity dividends paid (1,285) (1,039)
Net cash inflow before financing 2,111 2,104
Financing
Issue of Ordinary Share capital 314 373
Receipt for exercise of share options satisfied by 25 -
QUEST
New bank loans 5,000 -
Repayment of bank loan (700) -
Redemption of loan notes (7,184) -
(Decrease)/ increase in cash for the year (434) 2,477
NOTES TO THE GROUP CASH FLOW STATEMENT
For the year ended 31 March 2003
Reconciliation of operating profit to net cash flow
from operating activities
Year to Year to
31.03.03 01.04.02
#000 #000
Operating profit 8,247 5,965
Depreciation charges 1,771 1,984
Amortisation charge 370 170
Loss/ (profit) on disposal of tangible fixed assets 3 (26)
Increase in stocks (2,346) (1,073)
Increase in debtors (622) (356)
Increase in creditors 3,676 1,892
Increase/ (decrease) in provisions 98 (10)
Deferred bonus payable in shares 227 301
Net cash inflow from operating activities 11,424 8,847
Analysis of net debt
Loan Term Arrangement
Cash Notes Loan Fees Total
#000 #000 #000 #000 #000
As at 3 April 2001 2,420 - - - 2,420
Cash inflow 2,477 - - - 2,477
Loan notes issued to - (7,184) - - (7,184)
acquire new business
Capitalised arrangement - - - 69 69
fees for loan notes and
backing term loan
At 1 April 2002 4,897 (7,184) - 69 (2,218)
Cash outflow (434) - - - (434)
Exchange differences 104 - - - 104
Redemption of loan notes - 7,184 - - 7,184
New term loan - - (5,000) - (5,000)
Repayment of term loan - - 700 - 700
Amortisation of - - - (16) (16)
arrangement fees
Net funds at 31 March 4,567 - (4,300) 53 320
2003
Reconciliation of net cash flow to net debt
Year to Year to
31.03.03 01.04.02
#000 #000
Increase/ (decrease) in cash (434) 2,477
Loan notes issued to acquire new business - (7,184)
Redemption of loan notes 7,184 -
(Amortisation)/capitalisation of arrangement fees (16) 69
New term facility (5,000) -
Repayment of term facility 700 -
Exchange differences 104 -
Movement in net debt 2,538 (4,638)
Net (debt)/ funds at 1 April 2002 (2,218) 2,420
Net funds/(debt) at 31 March 2003 320 (2,218)
NOTES TO ACCOUNTS
1. These results which have been extracted from the full audited accounts for
the year to 31 March 2003 do not amount to full accounts within the meaning
of Section 240 of the Companies Act 1985.
2. The auditors have issued an unqualified report in the full accounts which
will be distributed to shareholders and delivered to the Registrar of
Companies in due course. The comparative figures for the year to 1 April 2002
have been taken from but do not constitute the Company's statutory financial
statements for that financial year. Those financial statements have been
reported on by the auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified. Further copies of the Preliminary
Results are available at the Company's Registered Office:
Majestic Wine PLC
Majestic House
Otterspool Way
Watford
WD25 8WW
3. A final dividend of 8p net on each Ordinary Share will be payable on
8 August 2003 to shareholders on the register on 4 July 2003.
END
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