Majestic Wine Profit Rises 18% After Minimum Purchase Requirement is Cut

Majestic Wine Plc, owner of the U.K.’s largest chain of wine warehouses, said first-half profit climbed 18 percent as it added more customers.

Net income advanced to 5.1 million pounds ($8.2 million), or 8.2 pence a share, for the 26 weeks to Sept. 27, from 4.3 million pounds, or 7 pence, a year earlier, the Watford, England-based company said today in a Regulatory News Service statement. Sales rose 10 percent to 117.6 million pounds.

Majestic said it had “a substantial increase” in active customers, rising 14 percent to 496,000. The company last year lowered its minimum purchase requirement to six bottles from 12. While the number of transactions increased 18.7 percent, the average spend per transaction declined 7.2 percent to 122 pounds.

Sales of still fine wine -- priced at 20 pounds a bottle and above -- rose 20 percent and now account for 5 percent of U.K. retail sales, the company said.

“Although the consumer environment remains challenging we see good potential for the future growth of Majestic,” Chairman Phil Wrigley said in the statement. “We are well prepared for the important Christmas trading period.”

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.

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