Majestic Wine puts 'foot on the gas' as it returns to profit

The wine warehouse chain posts half-year pre-tax profits of £3.1m as it fends of 'tough' UK trading conditions

Majestic Wine saw an increase in the number of repeat customers (Reuters)

Retailer Majestic Wine has said it is time to put its "foot on the gas" and ramp up sales growth as it cheered a return to profit.

The wine warehouse chain, which has 210 branches in the UK and two in France, posted bottom line pre-tax profits of £3.1m for the six months to 2 October against losses of £4.4m a year earlier.

Underlying per-tax profits jumped to £6.8m from £51,000 a year earlier.

Shares surged 7 per cent after the results.

It thanked a boost in customer numbers for the turnaround, which helped offset a slowdown in underlying retail sales growth to 2 per cent after hiking prices in the face of soaring buying costs from the weak pound and amid "tough" UK conditions.

The group said it has increased the number of repeat customers to 510,000 from 475,000 a year earlier.

Two years into a three-year turnaround, Majestic said it now plans to increase its rate of sales growth by "steadily" increasing spending to attract more new customers.

Chief executive Rowan Gormley said: "The plan is on track.

"Two years in and profits are growing, our foundation is solid and we are ready to accelerate growth.

"We have the opportunities to invest in new customers and a team excited to focus on what they do best. It's time to put our foot on the gas."

Group-wide sales growth stood at 5.7 per cent, including a 1.2 per cent boost from the weak pound flattering sales in US dollars, which puts it on track for its target to hit £500m of sales by 2019.

Its online Naked Wines business saw sales leap 10.9 per cent higher to £67.8m, with profits across all three of its markets worldwide.

The group said Naked Wines' revenues in the last 12 months were now double the level reported when it bought the business in April 2015.