Majestic Wine's sales back in growth after four years

Majestic Wine has seen the first growth in sales for four years but new chief executive Rowan Gormley admitted it still hasn’t got everything right and has plenty of distance to go.

Gormley, who became chief executive when Majestic bought wine-buying crowdfunding platform Naked Wines in April 2015, is one year into a three-year turnaround plan.

“There are early signs the plan is beginning to work,” he said. “Majestic is back in growth and Naked had a belter of a year.”

The shares jumped 23.5p, or 5%, to 461.25p.

Gormley said the wine market was “polarising into two types of customer”.

These are, he said, “those who don’t really care what wine they buy so long as it’s cheap and those who do care and want to know what they are drinking. We are the only people catering for that market.”

But Gormley also identified four areas he said “hadn’t gone so well”. These were stock control in Naked in the US, growth in Majestic’s commercial division and the fine-wine businesses Lay & Wheeler and Naked in Australia, where the managing director was moved to the larger US market.

He said he had learnt from the mistakes and these would be areas focused on this year.

Headline profits dropped 30% to £15 million, reflecting the cost of buying Naked and extra investment in stores and IT.