Majestic Wines (lon:wine)
Majestic Wines - What's not to like?

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Majestic Wines Share Price
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Title: Majestic Wines - What's not to like?
Company: WINE - Majestic Wines
Share Price Then: 316p
Author: Ian Smith
Date: Tue 25 Jul 2017
Comments: At 316p Majestic Wine’s share price is pretty close to bottom of the peaks and troughs that it has cycling through over the last 8 years.

This is despite the FY To April 2017 looking quite good, it seems that the headline swap from a £4.7m profit to a £1.7m loss has spooked investors.
Our full year reported loss of £1.5m reflects the ongoing expensing of non-cash share based payment charges and intangible assets that arose from the acquisition of Naked Wines.

Yes the core Majestic Wines that we all know grew sales by about 15% at slightly reduced margins. The commercial arm seems to have stagnated a bit with little change in sale revenue and a big drop in earnings, apparently this is due to a clearer split between retail and commercial sales.

The online co-op Naked Wines is growing and the Angels project is interesting not just because of what it is, but because they have decided to limit membership (to about 363,000), as of today there is a waiting list to join.

There may be some concerns that the Group is growing its international presence about 28% of Naked Wines Sales were in the USA, however Naked Wines USA managed to lose about £2m in a direct marketing campaign that was somewhat unsuccessful.

Finally attention has been paid to Lay & Wheeler a fine wine merchant which was bought in 2009, which was a bit of a vanity purchase in my mind. This year t contributed about £1m to profits.

Staff retention. …. The fundamental reason for this is that the best people have been frustrated by the fact that there is nowhere to go once you make it to store manager. ……. Managers will be able to earn a percentage of their store's contribution by having more control over the day to day running of their own store.

This is encouraging as the store manager motivates or not the staff and trips to Majestic are always an extra effort over picking up a bottle in the supermarket.
Read Count: 56/22

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