Top story

Majestic Wine’s (WINE) retail business posted its first like-for-like sales increase in four years to grow annual revenues to over £400m.

Overall revenues at the wine retailer, which bought online wine club Naked Wines last year, grew 41.3% to £402.1m largely thanks to the Naked acquisition and representing underlying growth of 6.2%.

Majestic Retail like-for-like sales were up 4.8%, the first positive performance in four years, while Naked Wines sales were up up 27.3% to £104.3m on a pro-forma basis, driven by strong growth in US.

Adjusted profit before tax dropped by 30.3% to £15m due to investment in Majestic’s transformation plan and acquisition borrowing costs. During the year the group invested an additional £4.1m into the Majestic retail and commercial businesses.

Naked Wines delivered £1m adjusted EBIT, ahead of expected breakeven due to combination of better economics for its “angel” customers and lower growth spend.

Majestic added it is making “good progress” in the first year of its three year transformation plan and is on track to deliver sales of £500m by 2019.

Rowan Gormley, group chief executive, commented: “We have taken the first step on a long journey – it was a good start but it is just the first step. Early signs are that the plan is starting to work. Strong sales figures reflect the hard work being done on the ground by the whole team.”

The management re-organisation is now complete, I am delighted with the teams we have in place across the Group. At Naked Wines we had a belter of a year – breaking through the £100m sales barrier and delivering a maiden profit.

We still have lots to do and although we are on course to deliver our three year plan, it won’t be without challenges… Trading conditions remain tough in the UK especially, and we expect them to stay that way, volatile currency movements will push up cost of goods [and] we are implementing a new supply chain and IT system, both of which are complex projects.”

Majestic shares are up 5.4% to 461.2p on the news this morning.

Morning update

There’s not too much else grocery-related on the markets this morning away from Majestic, but shares have rebounded strongly so far as hopes grow for a remain vote in the EU referendum.

The FTSE 100 has surged 2.3% to 6,157.2pts after a raft of polls seem to show momentum is back with the ”remain” side after “leave” had appeared to be leading heading into the final week.

Big movers so far today include Sainsbury’s (SBRY), up 3.4% to 239.5p, Tesco (TSCO), up 2.8% to 158.7p and Marks & Spencer (MKS), up 2.8% to 361.5p.

The week in the City

While it’s not the busiest week for market news, this week is a crucial week for all UK businesses as the EU referendum takes place on Thursday. With polls suggesting the vote is on a knife-edge, the UK’s continued membership of the EU is very much in doubt for Thursday’s vote – the result of which should be clear by Friday morning.

Most eyes will be on the EU referendum on Thursday, but Tesco has chosen that date to issue its Q1 trading statement to inform the market whether it has taken its recent sales momentum into the first quarter of its 2016/17 financial year.

Costa Coffee and Premier Inn owner Whitbread (WTB) will update the market on its first-quarter performance on Tuesday after a tough end to its previous financial year.

There is little else by way of market news this week – the Tesco sales update takes place before its AGM on Thursday and there are also AGMs for Coca-Cola HBC tomorrow and Rexam on Wednesday.

In terms of non-referendum economic news, the CBI Industrial Trends Surveys comes on Wednesday, GFK’s Consumer Confidence figures on Thursday and the CBI Distributive Trades Surveys also on Thursday.