Majestic Wine admits it is stockpiling booze in preparation for a ‘no deal’ Brexit as the firm swings to a loss and shares tumble 15%
- Wine seller Majestic said it is stockpiling up to £8m of wine ahead of Brexit
- The firm swung to a half-year loss amid ‘tough’ retail conditions
- Shares tumbled by more than 15% in early trading to £3.14
Majestic Wine admitted today that it is stockpiling wine, amid fears that a ‘no deal’ Brexit could lead to gridlock at ports and disrupt deliveries.
The wine, champagne and spirits seller said it will import additional bottles worth between £5million and £8million before the end of its financial year, which coincides with the date set for Brexit – March 29.
Rowan Gormley, group chief executive (above) said: ‘We’re doing well in a tough market.’
It is the latest UK firm to lift the lid on stockpiling plans.
Earlier this week, catering firm Compass said it would take similar measures if a no deal looked likely. The same goes for Premier Foods, the firm behind Mr Kipling cakes and Angel Delight.
Majestic wine is based in Heredforshire and listed on FTSE’s AIM in 1996
Majestic’s contingency plans emerged as it spilt half-year results showing it swung to to a £200,000 loss in the last six months, compared with profits of £3.1million a year ago.
The group, which floated in 1996, warned about ‘tough’ retail conditions ahead and said it expected full-year earnings to be flat ‘at best’.
The news triggered a 15 per cent slide in its shares to £3.14.
Majestic’s bottom line has been eaten into as it invests in attracting new customers.
It has been pushing its Naked Wines division and will spend around £20million more on this than expected as a result.
Group boss Rowan Gormley said: ‘We’re doing well in a tough market.
‘We set out a plan at our capital markets day in April 2018 and we are delivering against it. That plan was to accelerate growth by investing in new customers and, so far, the plan is on track.’
Majestic said it is still on course to meet its full-year sales target of £500million.