Majestic Wine share price: what to look out for in its full-year results
The British specialist wine retailer has shifted its strategy to focus on growth opportunities in Naked Wines with hundreds of stores set to close to strengthen its subscription business.
When is Majestic Wine’s results date?
Majestic Wine will release their full-year results on June 13.
Majestic Wine results preview: what does the City expect?
Like many retailers, Majestic Wine has opted to reorient its business away from the high street in favour of online, specifically around subscription-based sales.
Its new direction was made public in late-March, with the company stating that it plans to focus the business on the significant growth opportunities in Naked Wines, which it acquired in the second quarter of 2015.
To finance its growth strategy, the group is releasing capital from its Majestic retail and commercial operations, with the plan to sell all 200 stores.
Activist investor, Gatemore Capital, has thrown its support behind the plan to offload its entire retail business which will raise approximately £100 million.
‘Naked Wines has the potential for strong sustainable growth, and we will deliver the best results for our shareholders, customers, people and suppliers by focusing all our energies on delivering that potential,’ Group CEO Rowan Gormley said.
‘We also believe that a transformed Majestic business does have the potential to be a long-term winner, but that we risk not maximising the potential of Naked if we try to do both,’ he added.
Investors are no doubt eager for an update on how this transformative strategy is progressing, with Majestic Wine likely to provide further clarity in its full-year results later this month.
Little appetite for bricks-and-mortar retailers
Despite Majestic Wine remaining open to exploring all options for releasing capital from its retail and commercial assets, Liberum analyst Wayne Brown told the Financial Times that a straight sale ‘has always been the cleanest outcome and the one that maximised value for both sides of the transaction’.
The boutique investment bank valued Majestic Wine’s retail unit between £130 million - £150 million but noted that the group should be willing to accept a lower offer of around £100 million considering that there is a lack of appetite for bricks-and-mortar businesses.
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