Majestic Group Project Creative Capital May 2016

  • Published on
    17-Jan-2017

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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