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Shares in wine merchant Majestic slid 2.5% after 22.5% fall in pre-tax profit

Shares in wine merchant Majestic slid 2.5% after 22.5% fall in pre-tax profit

PARIS: Shares in wine merchant Majestic slid 2.5% as it reported a 22.5% fall in pre-tax profit for the year to end March but its new boss said he was confident momentum could be restored. The figure came in at £18.4mln compared to £23.8mln the year before on the back of increased admin and distribution costs.

Shares in wine merchant Majestic (LON:MJW) slid 2.5% on Monday as it reported a 22.5% fall in pre-tax profit for the year to end March but its new boss said he was confident momentum could be restored.

The figure came in at £18.4mln compared to £23.8mln the year before on the back of increased admin and distribution costs.

Revenue, however, was up 2.3% to £284.5mln (2014: £278.2mln).

Rowan Gormley, who has only been chief executive for ten weeks,  after the group acquired Naked Wines, which he founded.

He said it was clear that Majestic Wine had a period of challenging trading in recent years.

“Profit declined last year with growth in online and commercial sales not enough to offset the underlying sales decline in the more mature Majestic stores.

“There are a number of areas where customers are telling us that we need to do better, and issues which are holding us back need to be addressed.”

The firm plans a number of initiatives, including rebuilding the supply chain and IT investment,  which will require investment, initially costing £3mln during the current financial year mostly falling into the first half, reckoned Gormley.