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Majestic Wines PLCFinance report
Springboard Consultants: Moses OlawaleVictoria MuldowneyCarla CatoniShane CostelloKatherine Thomas
Majestic Wine PLC
● UK based wine retailer● Mixture of wine, beers, champagne and spirits ● £284 million turnover 2015● Their brands include: Majestic Wine Warehouses,
Lay & Wheeler, Majestic Wine Calais, Naked Wines
History2015 Majestic acquired Naked wines and removed the minimum purchase requirement after 35 years
2013 Majestic wine launched new website
2012 Majestic co.uk launched mobile website
2011 TV advertising campaign; Come and Explore
2009 Sales pass £200m and they celebrated 150th stores
2002 Majestic wine opens 100 stores
2000 Majestic co.uk launched
1996 Majestic going public
1995 Majestic opens 50 stores in the Uk
1991 New management team takes over
1986 Electronic tills introduced
1980 Majestic was formed
Operating Segments
Wine Retailer - 211 stores UKFree wine tasting, delivery and glass hire
Wine retailer by the case - 2 stores CalaisOffers discounted travel from UKTaste before travel service
Specialist in fine wine salesOffers expert advice about fine wine acquisition and storage
Online wine retailer - ship to UK, USA, AUSCustomers fund independent winemakers in return for wines at wholesale prices
The Market UK Alcoholic Beverage Market = £43,671.9m (2014)
UK Wine Industry = £10,138.1m
Competition in Market
Risks and Mitigation
Financial Five Year Trend2011 2012 2013 2014 2015
ROCE 32.65% 32.95% 29.04% 26.13% 20.57%
Operating Profit Margin (£m)
20.67 23.42 23.81 23.89 18.54
Current Ratio
2.4:1 2.4:1 2.6:1 2.9:1 2.8:1
Acid Test Ratio
1.6:1 1.6:1 1.7:1 1.9:1 1.8:1
Revenue per Share
416.08p 444.62p 425.73p 426.07p 433.52p
Key financial findings ● Market share grew by 0.1% to 4.3%
● Annual profits dropped by £5.35m
● Increased warehouse costs lead to supplier backlash
● Conservative dividend policy
Future Strategy ‘To deliver sustainable, volume led earnings growth and improved return on capital’
● Increase sales to over £500m by 2019, via new pricing policy● Maintain Return on investment to above 25% ● Improved PR and Goodwill, e.g.supplier relations ● Improve customer experience in store, online and via App ● Expand the Majestic B2B sales ● Grow Naked Wines in the UK, USA and Australia● Improve staff retention
Conclusion
Key financial statistics indicate:
● Investment campaign will create significant value in the future
● Investors can expect dividends by 2018
● Competitor acquisition will positively impact future digital sales
● Established player
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