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Majestic sees profits slide

Published:  15 June, 2009

Majestic Wine has been hit by a downturn in trade at its French business, Wine & Beer World, as a result of the pound's slide against the euro.

The retailer's preliminary results for the year to March 30 saw a 56% decrease in pre-tax profits, to £7.4 million compared to £16.7 million the previous year.

The results were dented by an impairment charge of £5.3 million, which represents the falling value of the goodwill in Wine & Beer World.

But Majestic said its total sales over the period rose by 2.4% to £201.8 million and it reported a 16% growth in e-commerce. Online sales now represent 9.1% of its UK turnover.

The average bottle of wine purchased at Majestic now sells for £6.35, compared to the market average of £4.25 and the £5.98 figure Majestic reported last year.

The integration of Lay & Wheeler is said to be progressing well and four new branches opened in the past financial year - markedly lower than the 12 the company usually aims for. By the end of this month the estate will stand at 150.

Chief executive Steve Lewis said: "The resilience of our core consumer business is encouraging, our market share has held steady and we are confident that Majestic is well positioned to benefit from any upturn in the economy."