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Majestic Wine in the black as Naked Wine drives sales higher

By BFN News | 08:02 AM | Thursday 14 June, 2018

Majestic Wine announced group reported sales were up 2.3% (4% underlying) in the year to 2 April, driven by 11.3% underlying sales growth in Naked Wines. The company also revealed a £9.8m improvement in profit before tax (PBT) to £8.3m (FY17: £1.5m loss) and underlying adjusted PBT up 63% to £17.2m. HIGHLIGHTS: - Naked Wines key driver of profit growth with adjusted underlying EBIT six times higher than FY17 - Majestic Retail profitability flat - underlying sales growth of 1.9% and improved cost controls offset by foreign exchange pressures on margin - Naked Wines new customer acquisition spend of £14m - Returns good and improving - Forecast lifetime payback of customers recruited in the year of 4.7x vs 4.4x on £14.8m of spend in FY17 - Cash flow and balance sheet robust - net debt reduced to £8.4m, 0.35x Adjusted EBITDA (FY17: £25.4m, 1.2x Adjusted EBITDA) - Final dividend of 5.2p per share, bringing total dividend to 7.2p per share, 41.1% higher vs FY17 CEO Rowan Gormley said: "We are making headway despite headwinds. "Looking forward, we expect the UK market to remain tough, possibly even tougher than last year. "Certainly trading since year end has been harder than the prior year in the UK. "If the UK is headed for a retail crisis, as some commentators are suggesting, then we are planning for a great crisis. "We founded Naked Wines during the financial crisis of 2008 and proved that investing in acquiring customers and generating loyalty through great products and service, will drive profitable growth even in a tough market." In the past year, Majestic Wine: - Delivered profitable growth, despite a tough UK market, which is a testament to our people, our international positioning and the robustness of our model - Achieved greater efficiency throughout the business -Paid down our debt to below our target gearing level, and extended our access to borrowing should we need it Despite this, the company expects to hit FY19 market expectations because unlike many retailers: - It can generate growth through profitable customer acquisition, even in tough markets - 20% of our business takes place in the growth markets of the US and Australia, 45% of group sales are online - The company already, or will shortly, complete projects that eliminate unproductive work, freeing up our people to engage with customers and cutting costs At 8:02am: (LON:WINE) Majestic Wine PLC share price was -14.25p at 435.75p Story provided by

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