majestic group project creative capital may 2016

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Majestic Wines PLC Finance report Springboard Consultants: Moses Olawale Victoria Muldowney Carla Catoni Shane Costello Katherine Thomas

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Page 1: Majestic Group Project Creative Capital May 2016

Majestic Wines PLCFinance report

Springboard Consultants: Moses OlawaleVictoria MuldowneyCarla CatoniShane CostelloKatherine Thomas

Page 2: Majestic Group Project Creative Capital May 2016

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

Page 3: Majestic Group Project Creative Capital May 2016

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

Page 4: Majestic Group Project Creative Capital May 2016

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

Page 5: Majestic Group Project Creative Capital May 2016

The Market UK Alcoholic Beverage Market = £43,671.9m (2014)

UK Wine Industry = £10,138.1m

Page 6: Majestic Group Project Creative Capital May 2016

Competition in Market

Page 7: Majestic Group Project Creative Capital May 2016

Risks and Mitigation

Page 8: Majestic Group Project Creative Capital May 2016

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

Page 9: Majestic Group Project Creative Capital May 2016

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

Page 10: Majestic Group Project Creative Capital May 2016

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

Page 11: Majestic Group Project Creative Capital May 2016

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