RNS Number:1183S
Majestic Wine PLC
17 November 2003
17 November 2003
INTERIM RESULTS
'Pre tax profit up 42%'
Majestic Wine PLC ("Majestic"), the UK's largest wine warehouse chain with 113
stores, today announces its interim results for the 26 weeks ended
29 September 2003
HIGHLIGHTS
* Profit before the exceptional item, tax and amortisation of goodwill
increased by 42% to #3.96m (2002 : #2.79m)
* Total sales up 21.8% to #69.1m (2002 : #56.8m) with like for like UK
Sales up 12.0% (2002 : like for like UK sales up 10.7%)
* Significant increase in new customers to Majestic, number of active
purchasing customers on the mailing list increased by 10.3% to 310,000
* Interim dividend increased by 50% to 4.5p net per share (2002 : 3p net
per share)
* Trading in Majestic's three French stores in Calais, Coquelles and
Cherbourg has been excellent, with first half sales growth of 21.7%
* Five new stores opened in the period in Uxbridge, Wilmslow, St John's
Wood, Kendal and Victoria. In November, new stores opened in
Battersea, Cirencester, Enfield and Warrington.
* Sales growth continues to be encouraging with like for like UK sales
for the six weeks from 30 September to 15 November 2003 up 7.5%.
Commenting on the results Tim How, Chief Executive of Majestic, said:
"We are delighted with these strong financial results, and are confident that
the differentiation of our business from the competition, and the enthusiasm of
our people, will enable Majestic to continue to grow strongly in an expanding UK
wine Market."
For further information, please contact:
Tim How Tel: 01923 298200
Majestic Wine PLC
Tim Thompson / Nicola Cronk Tel: 020 7466 5000
Buchanan Communications
Chairman's Statement
I am delighted to announce a further substantial profit increase for the first
half of the 2003/2004 financial year. Profit before the exceptional item, tax
and amortisation of goodwill increased by 42% to #3.96m.
Total sales were up 21.8% with like for like UK sales up 12.0% which is very
pleasing as it is on top of 10.7% reported for the same period last year. We
have seen good growth in still wine sales particularly from the Loire, Southern
France, South Africa, Chile and New Zealand. Champagne, rose and beer sales
grew strongly, partly as a result of the excellent summer weather.
We continue to attract significant numbers of new customers to Majestic and
those on the mailing list who made purchases in the last 12 months were up by
10.3% to 310,000. The average bottle price of still wine purchased at Majestic
is #5.31 and the average spend per transaction at our stores is #104.
During the period we sold and leased back our freehold property in Putney for
#1.16m realising an exceptional gain of #396,000.
Wine and Beer World
Trading in our three stores in France in Calais, Coquelles and Cherbourg has
been excellent with first half sales growth of 21.7%.
New Stores
We have made good progress with new store openings. Five new stores opened in
the period in Uxbridge, Wilmslow, St. John's Wood, Kendal and Victoria, and we
re-sited our New Barnet store. In November we have opened new stores in
Battersea, Cirencester, Enfield and Warrington bringing the total number of UK
stores trading to 113.
The new store in St. John's Wood is twice the size of an average Majestic store
and incorporates a climate-controlled fine wine centre which stocks over 200
wines priced at #20 and above. Customers can order these wines via any Majestic
store and through the newly launched fine wine section on our website
www.majestic.co.uk. The store also has an improved sales counter layout and
re-designed tasting counter, which will be incorporated in all new stores.
Dividend
As a result of the continued strong trading and cash generation of the business
we are declaring an increased interim dividend of 4.5p net per share up by 50%
on last year. The dividend will be paid on 9 January 2004 to shareholders on
the register at the close of business on 5 December 2003.
Non-executive Director
We are pleased to announce the appointment of Paul Dermody to the Board as non-
executive Director. Paul was Chief Executive of De Vere Group Plc having
recently retired after almost forty years with the company. Paul's experience
of leading a customer focussed business such as De Vere will be invaluable to
Majestic.
Awards
We are very pleased that for the second year running we have been awarded "High
Street Retailer of the Year" at the International Wine Challenge 2003 sponsored
by Wine Magazine. We are also delighted to be able to congratulate six of our
managers who during November were awarded Wine and Spirit Education Trust "
Awards of Excellence" for outstanding papers in their Diploma examinations.
Current Trading
Sales growth has continued to be most encouraging with like for like UK sales
for the six weeks from 30 September to 10 November 2003 up 7.5%. Sales at the
three stores in France for the same period were 19.7% higher than last year.
Looking Forward
We are confident that the differentiation of our business from the competition
and the enthusiasm of our people will enable Majestic to continue to grow
strongly in an expanding wine market.
John Apthorp
Chairman
17 November 2003
GROUP PROFIT & LOSS ACCOUNT
For the 26 weeks ended 29 September 2003
26 weeks 26 weeks Year
ended Ended ended
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
Note #'000 #'000 #'000
Turnover 69,143 56,753 125,675
Cost of sales (55,748) (45,541) (99,957)
Gross profit 13,395 11,212 25,718
Distribution costs (5,770) (5,083) (10,726)
Administrative costs (3,978) (3,573) (7,116)
Rental income 209 190 371
Operating profit 3,856 2,746 8,247
Profit on disposal of fixed assets 2 396 - -
Profit on ordinary activities
before interest and taxation
4,252 2,746 8,247
Net interest payable (79) (141) (274)
Profit on ordinary activities
before taxation 4,173 2,605 7,973
Taxation 3 (1,266) (873) (2,584)
Profit on ordinary activities after
taxation 2,907 1,732 5,389
Dividend 4 (686) (458) (1,681)
Retained profit for the period 2,221 1,274 3,708
Earnings per share 6
Basic 19.2p 11.5p 35.8p
Diluted 18.4p 11.3p 34.8p
Underlying earnings per share
Basic 17.8p 12.8p 38.2p
Diluted 17.1p 12.5p 37.1p
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the 26 weeks ended 29 September 2003
26 weeks 26 weeks Year
ended ended ended
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Profit attributable to the members
of the parent company 2,907 1,732 5,389
Currency translation differences on
foreign currency net investments 3 14 124
Total gains and losses recognised 2,910 1,746 5,513
GROUP BALANCE SHEET
As at 29 September 2003
As at As at As at
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
Note #'000 #'000 #'000
Fixed assets
Intangible fixed assets 6,690 7,060 6,875
Tangible fixed assets 22,662 19,089 21,498
29,352 26,149 28,373
Current assets
Stocks 26,336 24,267 20,832
Debtors 5,556 4,520 4,425
Cash at bank and in hand 2,672 - 4,567
34,564 28,787 29,824
Creditors:
Amounts falling due within one year (33,558) (27,508) (29,786)
Bank overdrafts - (1,029) -
Net current assets 1,006 250 38
Total assets less current
liabilities 30,358 26,399 28,411
Creditors:
Amounts falling due after more than
one year (2,574) (3,938) (3,265)
Provision for liabilities & charges (693) (471) (305)
Net assets 27,091 21,990 24,841
Capital & Reserves
Called up share capital 5 4,602 4,582 4,587
Share premium account 5 5,046 4,716 4,766
Revaluation reserve 5 22 22 22
Profit and loss account 5 17,421 12,670 15,466
Equity shareholders' funds 5 27,091 21,990 24,841
GROUP CASH FLOW STATEMENT
For the 26 weeks ended 29 September 2003
26 weeks 26 weeks Year
ended ended ended
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 3,140 (208) 11,424
Returns on investments and servicing of finance
Interest paid (42) (74) (65)
Loan note interest and guarantee fees - (104) (140)
Term loan interest (92) - (184)
Interest received 28 30 107
(106) (148) (282)
Taxation
UK corporation tax paid (1,060) (938) (2,449)
Overseas corporation tax (paid)/refund (278) 49 91
(1,338) (889) (2,358)
Capital expenditure
Payments to acquire tangible fixed assets (2,857) (2,130) (5,411)
Receipts from sales of tangible fixed assets 1,171 20 23
(1,686) (2,110) (5,388)
Equity dividends paid (1,219) (830) (1,285)
Net cash (outflow)/inflow before financing (1,209) (4,185) 2,111
Financing
Issue of Ordinary Share capital 11 259 314
Receipt for exercise of share options satisfied by
QUEST - - 25
Bank loan - 5,000 5,000
Repayment of bank loan (700) - (700)
Redemption of loan notes - (7,000) (7,184)
Decrease in cash for the period (1,898) (5,926) (434)
NOTES TO THE GROUP CASH FLOW STATEMENT
(a) Reconciliation of operating profit to net cash inflow/(outflow) from operating activities
26 weeks 26 weeks Year
ended ended ended
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Operating profit 3,856 2,746 8,247
Depreciation charges 929 887 1,771
Amortisation charge 185 185 370
(Profit)/loss on disposal of tangible fixed assets (11) 3 3
Increase in stocks (5,504) (5,781) (2,346)
Increase in debtors (1,131) (717) (622)
Increase in creditors 4,413 2,261 3,676
Increase in provisions 388 208 98
Deferred bonus payable by shares 15 - 227
Net cash inflow/(outflow) from operating activities 3,140 (208) 11,424
(b) Reconciliation of net cashflow to net (debt)/funds
26 weeks 26 weeks Year
ended ended ended
29.09.03 30.09.02 31.03.03
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Decrease in cash (1,898) (5,926) (434)
Redemption of loan notes - 7,000 7,184
Amortisation of arrangement fees (9) (8) (16)
New term facility - (5,000) (5,000)
Repayment of term facility 700 - 700
Exchange differences 3 - 104
Movement in net debt (1,204) (3,934) 2,538
Net (debt)/funds at 31 March 2003 320 (2,218) (2,218)
Net (debt)/funds at 29 September 2003 (884) (6,152) 320
NOTES TO THE INTERIM REPORT
1. BASIS OF PREPARATION
The accounts of the Group for the 26 weeks ended 29 September 2003, which are
unaudited, were approved by the Board on 17 November 2003. They have been
prepared in accordance with the accounting policies set out in the Annual Report
and Accounts 2003.
The results contained in this statement do not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The financial information for
the full preceding year is based on the statutory accounts for the year ended 31
March 2003. Those accounts, upon which the auditors, Ernst & Young LLP, issued
an unqualified opinion, have been delivered to the Registrar of Companies.
2. PROFIT ON DISPOSAL OF FIXED ASSETS
During the period the freehold of the site in Putney was sold for #1,160,000
realising an exceptional gain of #396,000. The store has been leased back on
normal commercial terms.
3. TAXATION
Taxation for the 26 weeks ended 29 September 2003 is provided at 33.5% on profit
on ordinary activities before the exceptional profit on the disposal of property
being the anticipated rate of taxation for the period.
4. DIVIDEND
An interim dividend of 4.5p net per share will be paid on 9 January 2004 to
shareholders on the register at the close of business on the 5 December 2003.
5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Profit & Total
Share Share Revaluation Loss Shareholders'
Capital Premium Reserve Account Funds
#'000 #'000 #'000 #'000 #'000
At 31 March 2003 4,587 4,766 22 15,466 24,841
Share issue 1 10 - - 11
ESOT share issue 14 270 - (284) -
Transfer to shareholders funds - deferred bonus
expected to be satisfied in shares - - - 15 15
Retained profit for the period - - - 2,221 2,221
Currency translation differences on foreign
currency net investments - - - 3 3
At 29 September 2003 4,602 5,046 22 17,421 27,091
6. EARNINGS PER SHARE
Basic earnings per share is calculated on profit on ordinary activities after
tax of #2,907,000 (2002: #1,732,000) apportioned over the weighted Ordinary
Shares that were in issue for the period: 15,150,045 (2002: 15,021,353).
The calculation of the diluted earnings per share is in accordance with FRS 14.
The weighted average number of Ordinary Shares in issue during the period has
been adjusted to take account of the effect of all dilutive potential Ordinary
Shares. The number of shares used in the calculation was 15,794,011 (2002:
15,391,729).
Underlying earnings per share is calculated on earnings, before charging
amortisation of goodwill arising on the acquisition of Les Celliers de Calais
S.A.S. and the exceptional profit on disposal of freehold property,
of #2,696,000 (2002: #1,917,000). This alternative measure has been calculated
to allow shareholders to gain a clearer understanding of the trading performance
of the Group.
7. INTERIM REPORT
Copies of the Interim Report are being sent to shareholders. Further copies of
the Interim and Annual Report and Accounts may be obtained from the Company's
Registered Office, Majestic House, Otterspool Way, Watford, Hertfordshire, WD25
8WW. The Interim Report should be read in conjunction with the Annual Report and
Accounts 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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