Majestic Wine has pitched the case for its glass being half-full after reporting higher sales in its most recent financial year, despite a slide in profits due mainly to one-off charges.

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Majestic Wine sales rise

Majestic’s like-for-like sales rose by nearly 5% for the 52 weeks to the end of March, the UK specialist wine retailer said today.

It said that it benefited from better tailoring its wine range to consumer tastes – such as by including more English wine – plus a greater focus on craft beer and the abolition of the six bottle minimum purchase rule.

Net sales for the year jumped by 41% versus the previous 12 months, to £402m, thanks largely to the firm’s acquisition of Naked Wines.

But, results were bittersweet after Majestic also reported a slide in net profits for the year, from £13.5m to £2.3m.

One-off costs related to the Naked Wines acquisition were a significant factor in the drop – including £7.3m of ‘share based payment charges’.

Investors sided with the retailer’s glass half-full analysis on Monday (20 June). Majestic’s share price was up by around 4% for the day at 16h00 local time, building on strong momentum in 2016 so far following a difficult period for the wine retailer. However, shares fell by 2% in early trading on Tuesday 21 June, dampening the initial enthusiasm.

Chief executive Rowan Gormley said the firm’s three-year transformation plan had begun well.

‘We are seeing early signs that the plan is working,’ he said. ‘We now have a solid foundation and the team to deliver.’

Gormley highlighted several initiatives throughout the year, including investment in staff retention at Majestic. The firm’s Majestic retail division has abolished its bonus cap for staff, for example.

He also said a new shareholder dividend policy would begin with the first half of the new financial year.

Naked Wines turned a profit for the first time during the year, with sales increasing by 27% to £104m, the firm said.

Updated 21/06/2016: To include share price movement in early trading on 21 June.

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