Majestic Wine (WINE)

Majestic Wine WINE Logo

A leading wine specialist operating in four separate divisions – Majestic Retail, Naked Wines, Majestic Commercial and Lay and Wheeler.

23-Nov-2017 – 383.25p – £272.8m – PER 19.5

Results For The 6 Months To 2nd October 2017 – “Ready to accelerate growth” – Adjusted PBT up£6.7m to £6.8m from breakeven in H1 2017, Sales up 4.2% and on track to hit £500m by 2019. The Interim dividend is up 33.3% to 2.0p per share.

This is what puts my simple brain off this company – “Ready to accelerate growth”, on track to hit £500m in Revenue by 2019. Let’s look at Revenue on Stockopedia… 2015 – 2017 was £284.5m up to £465.4m and 2017 – 2019 is now forecast to be £465.4m to £516.7m. Now, this accelerated growthmay be related to the very poor Operating Margin or ROCE, I don’t know and I could be wrong. But as on track to hit £500m in Revenue by 2019 was mentioned I assumed the acceleration referred to Revenue.

9-Jan-2018 – 459p – £328.0m – PER 22.7

Christmas Trading Statement – LFL sales up 3.2% (10 week period to end 1-Jan-2018). Remain on track to hit £500.0m in sales by 2019.

I still can’t get excited here. And, they’re still banging on about £500m in Revenue by 2019, why? It’s only 10% higher than 2017 Revenue – The PER is 22.7!

22-Nov-2018 – 374.5p – £270.1m – PER 18.9

Results For The 26 Weeks To 1st October 2018 – Revenue up 5.4% but made a Loss of -£0.2m (£3.1m Profit last time), EPS is also negative (-0.1p) versus positive last time (3.1p). The Interim Dividend is flat.

I really can’t see the investment case here at all – They keep banging on about accelerating Revenue to £500m by 2019 (10% higher than it was in 2017). I thought this was a crazy valuation on a PER of 22.7, at 18.9 I still think it’s crazy. A thought – Are huge bonuses being promised on hitting £500m Revenue in 2019, is that why they’re screwing Profits?

9-Jan-2019 – 250p – £180m – PER 14.7

Trading Update For The 10 Weeks To End December 2018 – Sales up 6.8% (6.3% underlying), FY PBT to be broadly in-line (£11m – £12.8m).

I still don’t see a reason to get excited here.

13-Jun-2019 – 318p – £229m – PER 22.8

Results For The 12 Months To 1st April 2019 – Revenue up 6.3%, Adjusted PBT down -34.5%, Adjusted EPS down similar to 14.7p, LBT of -£8.5m (£8.3m PBT last time), Final Dividend cancelled to be replaced by a Special Dividend later in the year.

Going through a transformation here and it’s just too confusing for me at present – I will remain on the side-lines until things are a little clearer.

Stockopedia Banner